CHILLICOTHE, Ohio (From news reports) -- Glatfelter expects to provide an update this fall on its strategic review regarding the future of its Specialty Papers division, which includes the Chillicothe paper mill.
During a second-quarter earnings call with investors Tuesday, Glatfelter Chairman and CEO Dante Parrini said he plans to present an update regarding Specialty Papers during the next quarterly earnings call which will follow the July through September operating period, placing the call somewhere around the end of October or beginning of November.
Glatfelter announced earlier this year that market challenges facing Specialty Papers and resulting drops in profitability prompted a decision to conduct a strategic review of options for the future of the division and its facilities, including the possibility of a sale or spinoff.
Since then, it has remained mum on the range of potential options, and Parrini stressed again that "this review is ongoing and there can be no assurance that it will result in a particular outcome."
A company spokesperson also said following the call that Glatfelter could not respond to a question about the types of steps that are involved in such a review, saying the company did not want to say anything that could be misinterpreted or lead to false speculation about the future direction of the division.
Parrini did reiterate that the future direction of the overall company will rest heavily on some of its other divisions.
"As we've said in the past, we have an aspiration and a vision of becoming a leading global engineered materials company," Parrini said. "We're in the midst of an ongoing transformation, and we are focusing on platforms that we think are the best fit for our style of competition and where we have a proven track record of success.
Parrini and Chief Financial Officer John Jacunski noted the April through June period was a challenging one for the company, with a net loss of $7.4 million, or 17 cents per share, compared with a net loss of $5.7 million, or 13 cents per share, during the same period in 2017.
Specialty Papers, which in addition to the Chillicothe mill includes a smaller Ohio facility in Fremont and a production facility in Spring Grove, Pa., played a significant role in the results.
Higher prices for wood pulp purchased elsewhere was one issue, while regular maintenance shutdowns covering a broad scope of work at both the Ohio and Pennsylvania facilities and a slower ramping back up of production than also expected negatively impacted profitability.
The negative impact was offset slightly on the revenue side by market price increases for the products produced at the mills.
Company officials said there is a bright side for Specialty Papers, however, for the remainder of the year.
Price increases in the paper market should accelerate later in the year and into early 2019, and shipping volumes are projected in the July through September period to increase about 8 percent compared to the second quarter.
Third quarter results may be impacted by a July press roll failure in one of Chillicothe's paper machines, Jacunski said, causing a temporary halt in production from that machine. Slightly higher energy and raw materials costs could also have a negative impact.
In its other divisions, Glatfelter saw a net sales increase of $9.8 million in Composite Fibers in the second quarter and a $10 million net sales increase quarter-over-quarter in Advanced Airlaid Materials.
