QUOTE AND NEWS
SeekingAlpha  Oct 16  Comment 
By Stephen Simpson, CFA: I've had my issues with the valuation at Neenah Paper (NYSE:NP), but this specialty paper company continues to execute at a high level and the market has continued to reward that performance. While the shares have been...
StreetInsider.com  Oct 1  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Glatfelter+%28GLT%29+Completes+%2411M+Spezialpapierfabrik+Oberschmitten+Acquisition/9874769.html for the full story.
StreetInsider.com  Sep 29  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Glatfelter+%28GLT%29+Provides+Update+on+Whiting+Litigation/9868450.html for the full story.
DailyFinance  Sep 23  Comment 
Glatfelter (NYSE: GLT) announced today that its Board of Directors declared a $0.11 per share cash dividend on its outstanding common stock. The dividend is payable on November 3, 2014 to shareholders of record as of the close...
StreetInsider.com  Sep 12  Comment 
* Alliance Data Systems Corporation (NYSE: ADS) and Conversant, Inc. (Nasdaq: CNVR) announced the execution of a definitive agreement whereby Alliance Data will purchase Conversant. Under the terms of the agreement, Alliance Data will acquire all...
DailyFinance  Sep 12  Comment 
Glatfelter (NYSE: GLT) today announced it has signed a definitive agreement to purchase all of the outstanding equity of Spezialpapierfabrik Oberschmitten GmbH (SPO) from FINSPO Beteiligungs-GmbH for €8.5 million...
Forbes  Aug 21  Comment 
Shareholders of PH Glatfelter (NYSE: GLT) looking to boost their income beyond the stock's 1.9% annualized dividend yield can sell the April 2015 covered call at the $25 strike and collect the premium based on the $1.05 bid, which annualizes to an...
SeekingAlpha  Aug 1  Comment 
By Stephen Simpson, CFA: P.H. Glatfelter (NYSE:GLT) is one of those "toil in obscurity" companies that can put together good multiyear runs on the back of a perpetual willingness to restructure operations away from commoditzed products and toward...




 
TOP CONTRIBUTORS

Glatfelter (GLT) manufactures specialty papers, composite fibers, and airlaid materials that are used in various products including books, furniture, and baby wipes. The company has three divisions: Specialty Papers, Composite Fibers, and Airlaid Materials. These divisions produced a range of products for extremely different markets: specialty papers has seen decreased demand as the book industry and envelope market have contracted, yet has been able to grow its market share and revenues; composite fibers is growing thanks to its uses in tea bags and single-serving coffee products; and the newly acquired airlaid materials division has a leading market share in materials for female hygiene and adult incontinence products.[1] The company will continue to face pressure in its specialty papers division with consumers and producers increasingly moving transactions and products online, decreasing the need for the company's credit card receipt paper and book publishing paper, however the composite fibers division should benefit from an ever-growing market for single-serving tea and coffee products as well as highly technical paper products.[2] The new airlaid division adds an entirely new dimension to the company, allowing it to compete in the female hygiene and adult incontinence product markets.

Business Segments[3]

  • Specialty Papers - 57.9% of net sales (6.4% increase)
  • Composite Fibers - 28.8% of net sales (6.9% increase)
  • Advanced Airlaid Materials - 13.3% of net sales

Glatfelter acquired Concert Industries in early 2010, which accounts for the entire Advanced Airlaid Materials division.

Business Growth

FY 2010 (ended December 31, 2010)[4]

  • Net revenue increased 22.4% to $1.47 billion.
  • Net income decreased 56% to $54 million. This is after the company's purchase of its new airlaid materials division.

In 2010, revenue growth was driven by increased sales for carbonless and form papers (credit card receipts, forms, security papers) and increases for every product line in composite fibers (Food & Beverage, metallized, and laminates used in furniture and construction). The company acquired Concert Industries in early 2010.[5]

Trends and Forces

Transactions and Products Moving Online

Glatfelter's largest source of revenue is sales of carbonless and form paper. However, as commerce and communication increasingly migrates to online formats, Glatfelter's main revenue stream may suffer from decreased demand. A large part of the company's sales are also derived from paper sales for books and envelopes, both of which are also vulnerable to a shift away from paper goods.[6] The company's second largest sales product, for food and beverage, is more insulated from these forces. And the company's newest division of Airlaid materials is completely insulated from the online movement, however it is exposed to a unique set of forces stemming from its specific market and concentrated sales to a few large customers.

Pricing Wars and Maintaining Their Niches

Glatfelter has aggressively pursued a strategy of competing in smaller, niche markets, especially its Composite Fibers segment with metallic papers, food and beverage products, and composite laminates. However, the company's largest product lines are still in more traditional forms (envelopes, carbonless paper, etc), and as such, the company must compete in ongoing price wars with larger competitors. The rapid rise in raw materials costs over the past few years has forced the company to enact multiple price increases in order to maintain profit margins. The company's continued success will depend on its ability to remain competitive against its larger competitors in more traditional markets, while also expanding its presence and operations in niche markets.[7]

Competition

The company's three divisions include papers and fibers used in a variety of products in various markets. Each specialized product line has different competitors and responds to different market forces. The company's largest competitors in the broad Paper market are listed below.

  • Domtar (UFS) is a large producer of uncoated paper. They compete with Glatfelter's carbonless and forms, book publishing paper, and envelopes.
  • International Paper Company (IP) is one of the largest paper manufacturers. They are Glatfelter's largest envelope competitor.
  • Ahlstroem (HEL:AHL1V) is a Finnish company that produces food and beverage paper products (and other specialty papers) that compete with Glatfelter's products.

References

  1. GLT 2010 10-K, p. 1-4
  2. 14 Growing High-Dividend-Yield Companies Trading at Attractive Valuations, SeekingAlpha, 3/25/11
  3. GLT 2010 10-K, p.1
  4. GLT 2010 10-K, p. 13
  5. GLT 2010 10-K, p. 15
  6. Growing High-Dividend-Yield Companies Trading at Attractive Valuations, SeekingAlpha.com, 3/25/11
  7. Glatfelter Announces Price Increase, Marketwire, 5/16/11
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