Glatfelter Reviews Fourth Quarter and Full 12 months 2020 Outcomes NYSE:GLT

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Glatfelter Reports Fourth Quarter and Full Year 2020 Results NYSE:GLT

~ Strong financial performance in the midst of the pandemic ~

~ Progressing transformation with recent announcement to acquire Georgia-Pacific’s U.S. nonwovens business ~

CHARLOTTE, N.C., Feb. 04, 2021 (GLOBE NEWSWIRE) — Glatfelter Corporation (NYSE: GLT), a leading global supplier of engineered materials, today reported its results for the fourth quarter of 2020, which are summarized in the following table:

    Three months ended December 31  
    2020     2019  
In thousands, except per share   Amount     EPS     Amount     EPS  
                                 
Net income (loss)   $ 9,781     $ 0.21     $ (44,882 )   $ (1.01 )
Income (loss) from discontinued operations, net of tax     650       0.01       (132 )      
Income (loss) from continuing operations     9,131       0.20       (44,750 )     (1.01 )
Adjusted earnings from continuing operations     9,645       0.22       7,684       0.17  

On an adjusted basis, earnings from continuing operations for the three months ended December 31, 2020 and 2019, were $9.6 million, or $0.22 per share, compared with $7.7 million, or $0.17 per share, respectively. Adjusted earnings is a non-GAAP financial measure for which a reconciliation to the nearest GAAP-based measure is provided within this release. Consolidated net sales for the three months ended December 31, 2020 totaled $235.3 million compared with $231.0 million during the same period in 2019. On a constant currency basis, Composite Fibers’ and Airlaid Materials’ net sales decreased by 1.4% and 5.2%, respectively.

“Glatfelter delivered robust earnings in the fourth quarter, further contributing to a strong year amid unforeseen global economic challenges resulting from the pandemic,” said Dante C. Parrini, Chairman and Chief Executive Officer. “As businesses across the globe faced unprecedented volatility, Glatfelter continued to make progress by focusing on employee health and safety and overall operational excellence while ensuring uninterrupted supply of critical products to our customers, thereby achieving full-year adjusted EBITDA growth of 12%. We continued to realize operational and strategic benefits of our transformation that included an optimized portfolio comprised of over 85% essential consumer staples, and an improved cost structure from a flatter and more agile operating model. Also, we generated significant cash flow that translated into meaningful debt reduction, resulting in a very healthy balance sheet.”

Mr. Parrini continued, “In Composite Fibers, strong demand across nearly all product categories drove an increase in total shipments during the quarter compared to prior year. This volume increase and improved mix, combined with elevated production, enabled the segment to deliver an operating profit margin of nearly 11% for the fourth quarter. In Airlaid Materials, shipments during the quarter were above the prior year in all product categories except tabletop, which was negatively affected by the pandemic. As a result, we took more downtime in our Airlaid facilities to manage tabletop inventory, which impacted profitability. For the year, the Airlaid segment delivered an operating profit margin of approximately 12%, exceeding our guidance range.”

“As we start the new year, we remain focused on managing through the ongoing pandemic by keeping our employees safe and facilities operational. Equally important will be accelerating growth through diligent commercial execution and strategic investments such as our recently announced acquisition of Georgia-Pacific’s U.S. nonwovens operations. We believe this business is an excellent fit for Glatfelter and, given our strong balance sheet and stable cash flows, we are financially well positioned to invest in a variety of opportunities that further enhance the enterprise and align with our long-term growth strategy,” concluded Mr. Parrini.

Environmental, Social and Governance (ESG) Update

Over its 157-year history, Glatfelter has been committed to sustainability and being a responsible corporate citizen. In 2020, the Company made important strides in its ESG initiatives by formalizing sustainability priorities and publishing an ESG report. In addition, Glatfelter received special recognition for several of its high-performing sustainable engineered materials solutions. As part of Unilever’s “Partner with Purpose” program, Glatfelter was named a Top 3 finalist in the Climate and Nature Impact category for its DYNAGREEN plant-based, heat-sealable tea bag product. The Company was also awarded the “Fine to Flush” certificate from Water UK (a trade association representing major water companies in the United Kingdom) for its improved nonwoven substrate used in dispersible wipes and moist toilet tissues.

Fourth Quarter Results

The following table sets forth a reconciliation of results on a GAAP basis to an adjusted earnings basis, a non-GAAP measure:

    Three months ended December 31  
    2020     2019  
In thousands, except per share   Amount     EPS     Amount     EPS  
                                 
Net income (loss)   $ 9,781     $ 0.21     $ (44,882 )   $ (1.01 )
Exclude: (Income) loss from discontinued operations, net of tax     (650 )     (0.01 )     132        
Income (loss) from continuing operations     9,131       0.20       (44,750 )     (1.01 )
Adjustments (pre-tax)                                
Cost optimization actions     1,612               940          
Corporate headquarters relocation     443                        
Pension settlement expenses, net     (638 )             75,326          
COVID-19 incremental costs     949                        
Strategic initiatives     724                        
Timberland sales and related costs     (369 )             (458 )        
Total adjustments (pre-tax)     2,721               75,808          
Income taxes (1)     (1,148 )             (23,374 )        
CARES Act of 2020 tax benefit (2)     (1,059 )                      
Total after-tax adjustments     514       0.01       52,434       1.19  
Adjusted earnings from continuing operations   $ 9,645       0.22     $ 7,684     $ 0.17  
(1) Tax effect on adjustments calculated based on the incremental effective tax rate of the jurisdiction in which each adjustment originated.
(2) Tax benefit recorded in connection with passage of the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) related to provisions that modified the “net operating loss” provisions of previous law to allow certain losses to be carried back five years.

The sum of individual per share amounts set forth above may not agree to adjusted earnings per share due to rounding.

A description of each of the adjustments presented above is included later in this release.

Composite Fibers

    Three months ended December 31  
Dollars in thousands   2020     2019     Change  
                           
Tons shipped (metric)     34,734       34,027       707 2.1 %
Net sales   $ 137,822     $ 132,664     $ 5,158 3.9 %
Operating income     15,041       12,422       2,619 21.1 %
Operating margin     10.9 %     9.4 %          

Composite Fibers’ net sales increased $5.2 million or 3.9%, compared to the year-ago quarter driven by higher shipments in all product categories except metallized, which was restructured earlier in the year. These increases and favorable currency translation of $7.0 million were partially offset by lower selling prices of $3.7 million.

Composite Fibers’ operating income of $15.0 million was $2.6 million higher, or approximately 21% favorable, compared to the fourth quarter of 2019. Stronger shipping volumes in nearly all product categories and improved mix favorably impacted operating profit by $2.5 million. Lower selling prices of $3.7 million were partially offset by lower input prices of $1.3 million, primarily wood pulp. Higher production in most of our facilities to meet the elevated demand, coupled with strong operations, favorably impacted results by $3.4 million. Currency unfavorably impacted results by $0.9 million, reflecting hedging instruments that matured this quarter being lower versus a year ago and more than offsetting the stronger Euro translation rate.

Airlaid Materials

    Three months ended December 31  
Dollars in thousands   2020     2019     Change  
                             
Tons shipped (metric)     33,593       34,470       (877 ) (2.5 )%
Net sales   $ 97,460     $ 98,308     $ (848 ) (0.9 )%
Operating income     9,073       9,123       (50 ) (0.5 )%
Operating margin     9.3 %     9.3 %            

Airlaid Materials’ quarterly net sales decreased $0.9 million in the year-over-year comparison. Shipping volumes decreased 2.5% compared to the prior year quarter and selling prices were $0.8 million lower, reflecting the contractual pass-through of lower raw material prices. Currency translation was $4.2 million favorable.

Airlaid Materials’ fourth quarter 2020 operating income of $9.1 million was consistent with the fourth quarter of 2019. Lower shipping volumes unfavorably impacted results by $0.6 million, while lower raw material and energy prices of $1.2 million more than offset selling price declines of $0.8 million, adding net $0.4 million. Operations were $0.7 million unfavorable, mainly driven by lower production in response to the pandemic-driven decline in demand for tabletop products compared to the prior year. Currency translation was $0.9 million favorable.

Other Financial Information

The amount of “Other and Unallocated” operating expense in the table of Segment Financial Information totaled $10.4 million in the fourth quarter of 2020 compared with $8.2 million in the same period a year ago. Excluding the items identified to present “adjusted earnings,” unallocated expenses for the fourth quarter of 2020 decreased $0.7 million compared to the fourth quarter of 2019.

In the fourth quarter of 2020, income from continuing operations totaled $11.9 million and income tax expense totaled $2.8 million. On adjusted pre-tax income of $14.7 million, income tax expense was $5.0 million in the fourth quarter of 2020. The comparable amounts in the same quarter of 2019 were $11.2 million and $3.5 million, respectively. The effective tax rate on adjusted earnings was 34% in the fourth quarter of 2020.

Full Year Results

The following table sets forth a reconciliation of results on a GAAP basis to an adjusted earnings basis, a non-GAAP measure:

    Year ended
December 31
 
    2020     2019  
In thousands, except per share   Amount     EPS     Amount     EPS  
                                 
Net income (loss)   $ 21,298     $ 0.48     $ (21,541 )   $ (0.49 )
Exclude: Income from discontinued operations, net of tax     (515 )     (0.01 )     (3,670 )     (0.08 )
Income (loss) from continuing operations     20,783       0.47       (25,211 )     (0.57 )
Adjustments (pre-tax)                                
Restructuring charge – Metallized operations     11,111                        
Cost optimization actions     5,979               8,583          
Corporate headquarters relocation     1,053                        
Pension settlement expenses, net     6,154               75,326          
COVID-19 incremental costs     2,715                        
Asset impairment charge     900                        
Airlaid capacity expansion costs                   1,014          
Debt refinancing                   992          
Strategic initiatives     1,567               249          
Fox River environmental matter                   (2,509 )        
Timberland sales and related costs     (1,382 )             (1,572 )        
Total adjustments (pre-tax)     28,097               82,083          
Income taxes (1)     (5,405 )             (23,722 )        
CARES Act of 2020 tax benefit (2)     (6,082 )                      
Total after-tax adjustments     16,610       0.37       58,361       1.32  
Adjusted earnings from continuing operations   $ 37,393     $ 0.84     $ 33,150     $ 0.75  
(1) Tax effect on adjustments calculated based on the incremental effective tax rate of the jurisdiction in which each adjustment originated.
(2) Tax benefit recorded in connection with passage of the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) related to provisions that modified the “net operating loss” provisions of previous law to allow certain losses to be carried back five years.

Balance Sheet and Other Information

Cash and cash equivalents totaled $99.6 million as of December 31, 2020, and net debt was $213.9 million compared with $233.7 million at the end of 2019. Net leverage on December 31, 2020 and December 31, 2019 was 1.8 times and 2.2 times, respectively. (Refer to the calculation of this measure provided in the tables at the end of this release.)

Capital expenditures during 2020 and 2019 totaled $28.1 million and $27.8 million, respectively. Adjusted free cash flow for the twelve months ended December 31, 2020 was $80.3 million compared with $51.2 million in the prior year period. (Refer to the calculation of measure provided in the tables at the end of this release.)

Conference Call

As previously announced, the Company will hold a conference call today at 11:00 a.m. (Eastern) to discuss its fourth quarter results. The Company will make available on its Investor Relations website this quarter’s earnings release and an accompanying financial presentation which includes significant financial information to be discussed on the conference call including the Company’s outlook pertaining to financial performance. Information related to the conference call is as follows:

What: Glatfelter’s 4th Quarter 2020 Earnings Release Conference Call
   
When: Thursday, February 4, 2021, 11:00 a.m. (ET)
   
Number: US dial 888.335.5539
   
  International dial 973.582.2857
   
Conference ID: 7096056
   
Webcast: https://www.glatfelter.com/investors/webcasts-and-presentations/
   
Rebroadcast Dates: February 4, 2021, 2:00 p.m. through February 18, 12:00 p.m.
   
Rebroadcast Number: Within US dial 855.859.2056
   
  International dial 404.537.3406
   
Conference ID: 7096056

Interested persons who wish to hear the live webcast should go to the website prior to the starting time to register and ensure any necessary audio software is installed.

Glatfelter Corporation and subsidiaries
Consolidated Statements of Income
(unaudited)

    Three months ended
December 31
    Year ended
December 31
 
In thousands, except per share   2020     2019     2020     2019  
                                 
Net sales   $ 235,282     $ 230,972     $ 916,498     $ 927,673  
Costs of products sold     194,529       194,568       768,629       780,131  
Gross profit     40,753       36,404       147,869       147,542  
Selling, general and administrative expenses     27,338       23,824       100,045       94,967  
Gains on dispositions of plant, equipment and timberlands, net     (322 )     (733 )     (1,332 )     (2,060 )
Operating income     13,737       13,313       49,156       54,635  
Non-operating income (expense)                                
Interest expense     (1,675 )     (1,895 )     (7,022 )     (10,408 )
Interest income     9       192       399       1,123  
Pension settlement expenses, net     638       (75,326 )     (6,154 )     (75,326 )
Other, net     (777 )     (930 )     (4,020 )     (4,477 )
Total non-operating expense     (1,805 )     (77,959 )     (16,797 )     (89,088 )
Income (loss) from continuing operations before income taxes     11,932       (64,646 )     32,359       (34,453 )
Income tax provision (benefit)     2,801       (19,896 )     11,576       (9,242 )
Income (loss) from continuing operations     9,131       (44,750 )     20,783       (25,211 )
                                 
Discontinued operations:                                
Income (loss) before income taxes     679       (7 )     544       1,284  
Income tax provision (benefit)     29       125       29       (2,386 )
Income (loss) from discontinued operations     650       (132 )     515       3,670  
Net income (loss)   $ 9,781     $ (44,882 )   $ 21,298     $ (21,541 )
                                 
Basic earnings (loss) per share                                
Income (loss) from continuing operations   $ 0.21     $ (1.01 )   $ 0.47     $ (0.57 )
Income from discontinued operations     0.01             0.01       0.08  
Basic earnings (loss) per share   $ 0.22     $ (1.01 )   $ 0.48     $ (0.49 )
                                 
Diluted earnings (loss) per share                                
Income (loss) from continuing operations   $ 0.20     $ (1.01 )   $ 0.47     $ (0.57 )
Income from discontinued operations     0.01             0.01       0.08  
Diluted earnings (loss) per share   $ 0.21     $ (1.01 )   $ 0.48     $ (0.49 )
                                 
Cash dividend declared per common share   $ 0.135     $ 0.13     $ 0.535     $ 0.52  
                                 
Weighted average shares outstanding                                
Basic     44,368       44,189       44,339       44,132  
Diluted     44,714       44,189       44,614       44,132  

Segment Financial Information
(unaudited)

Three months ended December 31                                                                
Dollars in thousands   Composite Fibers     Airlaid Materials     Other and Unallocated     Total  
    2020     2019     2020     2019     2020     2019     2020     2019  
Net sales   $ 137,822     $ 132,664     $ 97,460     $ 98,308     $     $     $ 235,282     $ 230,972  
Costs of products sold     111,017       110,002       83,283       84,312       229       254       194,529       194,568  
Gross profit (loss)     26,805       22,662       14,177       13,996       (229 )     (254 )     40,753       36,404  
SG&A     11,764       10,241       5,104       4,873       10,470       8,710       27,338       23,824  
Gains on dispositions of plant, equipment                                                                
and timberlands, net                             (322 )     (733 )     (322 )     (733 )
Total operating income (loss)     15,041       12,421       9,073       9,123       (10,377 )     (8,231 )     13,737       13,313  
Non operating expense                             (1,805 )     (77,959 )     (1,805 )     (77,959 )
Income (loss) before income taxes   $ 15,041     $ 12,421     $ 9,073     $ 9,123     $ (12,182 )   $ (86,190 )   $ 11,932     $ (64,646 )
                                                                 
Supplementary Data                                                                
Metric tons sold     34,734       34,027       33,593       34,470                   68,327       68,497  
Depreciation, depletion and amortization   $ 6,523     $ 6,433     $ 5,818     $ 5,304     $ 949     $ 969     $ 13,290     $ 12,706  
Capital expenditures     4,141       3,273       2,705       5,785       1,125       690       7,971       9,748  
Year ended
December 31
                                                               
Dollars in thousands   Composite Fibers     Airlaid Materials     Other and Unallocated     Total  
    2020     2019     2020     2019     2020     2019     2020     2019  
Net sales   $ 525,089     $ 521,666     $ 391,409     $ 406,007     $     $     $ 916,498     $ 927,673  
Costs of products sold     430,420       432,154       326,809       346,568       11,400       1,409       768,629       780,131  
Gross profit (loss)     94,669       89,512       64,600       59,439       (11,400 )     (1,409 )     147,869       147,542  
SG&A     42,575       41,629       18,296       18,321       39,174       35,017       100,045       94,967  
Gains on dispositions of plant, equipment                                                                
and timberlands, net                             (1,332 )     (2,060 )     (1,332 )     (2,060 )
Total operating income (loss)     52,094       47,883       46,304       41,118       (49,242 )     (34,366 )     49,156       54,635  
Non operating expense                             (16,797 )     (89,088 )     (16,797 )     (89,088 )
Income (loss) before income taxes   $ 52,094     $ 47,883     $ 46,304     $ 41,118     $ (66,039 )   $ (123,454 )   $ 32,359     $ (34,453 )
                                                                 
Supplementary Data                                                                
Metric tons sold     134,758       133,473       136,661       137,595                   271,419       271,068  
Depreciation, depletion and amortization (1)   $ 26,175     $ 26,153     $ 22,416     $ 21,136     $ 8,009     $ 3,531     $ 56,600     $ 50,820  
Capital expenditures     13,262       11,972       9,311       13,667       5,563       2,126       28,136       27,765  
(1) The amount presented in 2020 in the Other and unallocated column includes accelerated depreciation incurred in connection with the restructuring of Composite Fibers’ Metallized operations.

Selected Financial Information
(unaudited)

    Year ended
December 31
 
In thousands   2020     2019  
                 
Cash Flow Data                
Cash from continuing operations provided (used) by:                
Operating activities   $ 108,993     $ 102,835  
Investing activities     (26,773 )     (27,113 )
Financing activities     (100,306 )     (72,774 )
                 
Depreciation, depletion and amortization     56,600       50,820  
Capital expenditures     28,136       27,765  
    December 31     December 31  
    2020     2019  
Balance Sheet Data                
Cash and cash equivalents   $ 99,581     $ 126,201  
Total assets     1,287,083       1,283,794  
Total debt     313,521       359,859  
Shareholders’ equity     577,932       555,959  

Reconciliation of GAAP Financial Information to Non-GAAP Financial Information

This press release includes a measure of earnings before the effects of certain specifically identified items, which is referred to as adjusted earnings, a non-GAAP measure. The Company uses non-GAAP adjusted earnings to supplement the understanding of its consolidated financial statements presented in accordance with GAAP. Non-GAAP adjusted earnings is meant to present the financial performance of the Company’s core operations, which consist of the production and sale of composite fibers and airlaid nonwoven materials. Management and the Company’s Board of Directors use non-GAAP adjusted earnings to evaluate the performance of the Company’s fundamental business in relation to prior periods and established business plans. For purposes of determining adjusted earnings, the following items are excluded:

  • Restructuring charge – Metallized operations. This adjustment represents the charges incurred in connection with the decision to restructure a portion of the Composite Fibers segment, primarily consisting of the consolidation of our metallizing operation from Gernsbach, Germany to Caerphilly, UK. The charge includes a non-cash charge of $5.0 million associated with accelerated depreciation and the write-off of inventory and spare parts in addition to cash severance costs totaling $6.1 million.
  • Cost optimization actions. These adjustments reflect charges incurred in connection with initiatives to optimize the cost structure of the Company, including costs related to the organizational change to a functional operating model. The costs are primarily related to executive separations, other headcount reductions, professional fees, asset write-offs and certain contract termination costs. These adjustments, which have occurred at various times in the past, are irregular in timing and relate to specific identified programs to reduce or optimize the cost structure of a particular operating segment or the corporate function.
  • Corporate headquarters relocation. These adjustments reflect costs incurred in connection with the strategic relocation of the Company’s corporate headquarters to Charlotte, NC. The costs are primarily related to employee relocation costs and exit costs at the previous corporate headquarters.
  • Pension settlement expenses, net. This adjustment reflects expenses incurred in connection with the termination of the Company’s qualified pension plan in 2019 and the reversion of excess pension plan assets to the Company in the second quarter of 2020. In the fourth quarter of 2019, the Company incurred a $75.3 million pension settlement charge in connection with the termination of the plan. Since the pension plan was fully funded, the settlement of the pension obligations did not require the use of the Company’s cash, but instead was accomplished with plan assets. In connection with the reversion of excess pension plan assets in the second quarter of 2020, the Company incurred pension settlement expenses related to excise taxes, net of post settlement adjustments and certain related professional fees.
  • COVID-19 incremental costs. This adjustment represents incremental cash costs incurred directly related to the COVID-19 pandemic such as mill employee incentive payments, enhanced hygiene protocols, safety and supplies and professional fees primarily associated with the CARES Act benefit.
  • Asset Impairment Charge. This adjustment represents a non-cash charge recorded to reduce the carrying amount of a tradename intangible asset of the Dresden wallcover business due to the impact of the COVID 19 pandemic on the underlying forecasted revenue stream.
  • Airlaid capacity expansion. These adjustments reflect non-capitalized, one-time costs incurred related to the start-up of a new airlaid production facility in Fort Smith, Arkansas and implementation of a new business system.
  • Debt refinancing costs. Represents a charge to write-off unamortized debt issuance costs in connection with the redemption of the Company’s $250 million, 5.375% Notes.
  • Strategic initiatives. These adjustments primarily reflect professional and legal fees incurred directly related to evaluating and executing certain strategic initiatives including costs associated with acquisitions and the related integration.
  • Fox River environmental matter. This adjustment excludes a gain and reflects a decrease in the Company’s overall reserve included in income for the Fox River matter primarily due to the resolution of the litigation in the first quarter of 2019.
  • Timberland sales and related costs. These adjustments exclude gains from the sales of timberlands as these items are not considered to be part of our core business, ongoing results of operations or cash flows. These adjustments are irregular in timing and amount and may benefit our operating results.
  • Coronavirus Aid, Relief, and Economic Security (CARES) Act 2020. This adjustment reflects the tax benefit recognized as a result of the March 27, 2020 change in U.S. tax law which, among others, allows net operating losses to be carried back five years.

Unlike net income determined in accordance with GAAP, non-GAAP adjusted earnings does not reflect all charges and gains recorded by the Company for the applicable period and, therefore, does not present a complete picture of the Company’s results of operations for the respective period. However, non-GAAP adjusted earnings provide a measure of how the Company’s core operations are performing, which management believes is useful to investors because it allows comparison of such operations from period to period. Non-GAAP adjusted earnings should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with GAAP.

Calculation of Adjusted Free Cash Flow   Year ended
December 31
 
In thousands   2020     2019  
                 
Cash from operations   $ 108,993     $ 102,835  
Capital expenditures     (28,136 )     (27,765 )
Free cash flow     80,857       75,070  
Adjustments:                
Restructuring charge – Metallized operations     5,268        
Cost optimization actions     3,799       6,657  
Corporate headquarters relocation     1,070        
Pension settlement     6,176       (53,401 )
COVID-19 incremental costs     2,516        
Airlaid capacity expansion costs           941  
Strategic initiatives     1,210       249  
Fox River environmental matter     3,526       21,470  
Tax (refunds) payments on adjustments to adjusted earnings     (3,981 )     224  
CARES tax refund     (20,108 )      
Adjusted free cash flow   $ 80,333     $ 51,210  
Net Debt   December 31     December 31  
In thousands   2020     2019  
                 
Current portion of long-term debt   $ 25,057     $ 22,940  
Long term debt     288,464       336,919  
Total     313,521       359,859  
Less: Cash     (99,581 )     (126,201 )
Net Debt   $ 213,940     $ 233,658  
EBITDA
  Year ended
December 31
    Year ended
December 31
 
In thousands   2020     2019  
                 
Net income (loss)   $ 21,298     $ (21,541 )
Exclude: (Income) loss from discontinued operations, net of tax     (515 )     (3,670 )
Add back:  Taxes on Continuing operations     11,576       (9,242 )
  Depreciation and amortization     56,600       50,820  
  Interest expense, net     6,623       9,285  
EBITDA     95,582       25,652  
Adjustments:                
Restructuring charge – Metallized operations     7,211        
Cost optimization actions     5,979       8,583  
Corporate headquarter relocation     871        
Pension settlement expenses, net     6,154       75,326  
COVID-19 incremental costs     2,715        
Asset impairment charge     900        
Airlaid capacity expansion costs           1,014  
Strategic initiatives     1,567       249  
Fox River environmental matter           (2,509 )
Timberland sales and related costs     (1,382 )     (1,572 )
Adjusted EBITDA   $ 119,597     $ 106,743  
Leverage   Year ended
December 31
    Year ended
December 31
   
In thousands   2020     2019    
                   
Net Debt   $ 213,940     $ 233,658    
Divided by Adjusted EBITDA     119,597       106,743    
Net leverage     1.8   x   2.2   x

Caution Concerning Forward-Looking Statements

Any statements included in this press release which pertain to future financial and business matters are “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. The Company uses words such as “anticipates”, “believes”, “expects”, “future”, “intends”, “plans”, “targets”, and similar expressions to identify forward-looking statements. Any such statements are based on the Company’s current expectations and are subject to numerous risks, uncertainties and other unpredictable or uncontrollable factors that could cause future results to differ materially from those expressed in the forward-looking statements including, but not limited to, the impacts of the COVID-19 pandemic, changes in industry, business, market, and economic conditions, demand for or pricing of its products, market growth rates and currency exchange rates. In light of these risks, uncertainties and other factors, the forward-looking matters discussed in this press release may not occur and readers are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements speak only as of the date of this press release and Glatfelter undertakes no obligation, and does not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release. More information about these factors is contained in Glatfelter’s filings with the U.S. Securities and Exchange Commission, which are available at www.glatfelter.com.

About Glatfelter

Glatfelter is a leading global supplier of engineered materials. The Company’s high-quality, innovative and customizable solutions are found in tea and single-serve coffee filtration, personal hygiene and packaging products as well as home improvement and industrial applications. Headquartered in Charlotte, NC, the Company’s annualized net sales approximate $916 million with customers in over 100 countries and approximately 2,415 employees worldwide. Operations include eleven manufacturing facilities located in the United States, Canada, Germany, France, the United Kingdom, and the Philippines. Additional information about Glatfelter may be found at www.glatfelter.com.