Attached files
| file | filename |
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| EX-99.1 - EX-99.1 PRESS RELEASE ANNOUNCING THE COMPLETION OF THE SALE OF SPECIALTY PAPERS - Glatfelter Corp | glt-ex991_109.htm |
| EX-2.1 - EX 2.1 AMENDMENT - Glatfelter Corp | glt-ex21_247.htm |
| 8-K - SPARTAN PRO FORMAS - Glatfelter Corp | glt-8k_20180930.htm |
Exhibit 99.2
P. H. Glatfelter Company
Pro Forma Condensed Consolidated Financial Statements (unaudited)
The following unaudited pro forma condensed consolidated financial statements (the "Pro Forma Financial Statements") have been prepared to reflect the sale of P. H. Glatfelter Company’s (the “Company's”) Specialty Papers business unit to Pixelle Specialty Solutions, LLC, an affiliate of Lindsay Goldberg, which was completed on October 31, 2018 (the "sale transaction").
The unaudited pro forma condensed statements of income for the years ended December 31, 2017, 2016 and 2015, are presented as if the sale transaction had occurred on January 1, 2015. The historical consolidated financial information has been adjusted to reflect items that are factually supportable, directly attributable to the sale transaction and expected to have a continuing impact on the combined results. Accordingly, the presentation herein sets forth unaudited condensed consolidated statements of income from continuing operations. In addition, although not required, the adjustments reflect the reclassification of non-service pension expenses/(benefits) in selling, general and administrative expense to non-operating expenses in connection with the adoption of Accounting Standards Update No. 2017-07, Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Costs (“ASU 2017-07”).
The Pro Forma Financial Statements have been prepared using the sale of a business method of accounting under accounting principles generally accepted in the United States ("U.S."). The sale transaction is subject to closing adjustments that have not yet been finalized. Accordingly, the pro forma adjustments are preliminary, and have been made solely for the purpose of providing Pro Forma Financial Statements as required by the U.S. Securities and Exchange Commission ("SEC") rules. Differences between these preliminary estimates and the final sale accounting may be material.
The Pro Forma Financial Statements are provided for informational purposes only and do not purport to represent what the actual consolidated results of operations of the Company would have been had the sale transaction occurred on January 1, 2015, nor are they necessarily indicative of future consolidated results of operations. The Pro Forma Financial Statements should be read in conjunction with (i) the accompanying notes to the Pro Forma Financial Statements; and (ii) the audited consolidated financial statements and accompanying notes of the Company contained in its annual report on Form 10-K for the year ended December 31, 2017.
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Year ended December 31, 2017 |
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Adjustments |
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In thousands, except per share |
Historical Glatfelter |
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Less SPBU (1) |
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Other Adjustments |
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Pro Forma |
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Net sales |
$ |
1,591,297 |
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$ |
790,935 |
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|
$ |
- |
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|
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$ |
800,362 |
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Energy and related sales, net |
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5,126 |
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5,126 |
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- |
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|
|
|
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- |
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Total revenues |
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1,596,423 |
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|
796,061 |
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- |
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800,362 |
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Costs of products sold |
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1,403,913 |
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734,230 |
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(12,910 |
) |
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(2 |
) |
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656,773 |
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Gross profit |
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192,510 |
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61,831 |
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12,910 |
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143,589 |
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Selling, general and administrative expenses |
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134,394 |
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46,391 |
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22,531 |
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(3 |
) |
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110,534 |
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(Gains) losses on dispositions of plant, equipment |
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|
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|
|
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and timberlands, net |
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26 |
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- |
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(223 |
) |
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(4 |
) |
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(197 |
) |
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Operating income (loss) |
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58,090 |
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15,440 |
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(9,398 |
) |
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33,252 |
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Non-operating income (expense) |
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Interest expense |
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(17,772 |
) |
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- |
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4,455 |
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(5 |
) |
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(13,317 |
) |
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Interest income |
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237 |
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- |
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- |
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|
237 |
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Other, net |
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(1,220 |
) |
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- |
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|
515 |
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(6 |
) |
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(705 |
) |
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Total non-operating expense |
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(18,755 |
) |
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- |
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4,970 |
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(13,785 |
) |
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Income (loss) from continuing operations before income taxes |
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39,335 |
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15,440 |
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(4,428 |
) |
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19,467 |
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Income tax provision (benefit) |
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31,421 |
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- |
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(6,342 |
) |
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(7 |
) |
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25,079 |
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Income (loss) from continuing operations |
$ |
7,914 |
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$ |
15,440 |
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$ |
1,914 |
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$ |
(5,612 |
) |
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Earnings per share |
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Basic |
$ |
0.18 |
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$ |
(0.13 |
) |
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Diluted |
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0.18 |
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(0.13 |
) |
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Year ended December 31, 2016 |
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Adjustments |
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In thousands, except per share |
Historical Glatfelter |
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Less SPBU (1) |
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Other Adjustments |
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Pro Forma |
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Net sales |
$ |
1,604,797 |
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$ |
843,581 |
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$ |
- |
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$ |
761,216 |
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Energy and related sales, net |
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6,141 |
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6,141 |
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- |
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- |
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Total revenues |
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1,610,938 |
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849,722 |
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- |
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|
761,216 |
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Costs of products sold |
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1,392,335 |
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|
752,646 |
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(10,222 |
) |
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(2 |
) |
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629,467 |
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Gross profit |
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218,603 |
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|
97,076 |
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|
10,222 |
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131,749 |
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Selling, general and administrative expenses |
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190,694 |
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|
55,866 |
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|
18,325 |
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(3 |
) |
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153,153 |
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(Gains) losses on dispositions of plant, equipment |
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|
|
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and timberlands, net |
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216 |
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- |
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(100 |
) |
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(4 |
) |
|
116 |
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Operating income (loss) |
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27,693 |
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41,210 |
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(8,003 |
) |
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(21,520 |
) |
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Non-operating income (expense) |
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Interest expense |
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(15,822 |
) |
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- |
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1,972 |
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(5 |
) |
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(13,850 |
) |
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Interest income |
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206 |
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- |
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- |
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|
206 |
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Other, net |
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(1,271 |
) |
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- |
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(6,147 |
) |
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(6 |
) |
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(7,418 |
) |
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Total non-operating expense |
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(16,887 |
) |
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- |
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(4,175 |
) |
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(21,062 |
) |
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Income (loss) from continuing operations before income taxes |
|
10,806 |
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|
41,210 |
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(12,178 |
) |
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(42,582 |
) |
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Income tax provision (benefit) |
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(10,748 |
) |
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- |
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(17,657 |
) |
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(7 |
) |
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(28,405 |
) |
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Income (loss) from continuing operations |
$ |
21,554 |
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$ |
41,210 |
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$ |
5,479 |
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$ |
(14,177 |
) |
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Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic |
$ |
0.49 |
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$ |
(0.33 |
) |
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Diluted |
|
0.49 |
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(0.32 |
) |
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Year ended December 31, 2015 |
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Adjustments |
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In thousands, except per share |
Historical Glatfelter |
|
|
Less SPBU (1) |
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|
Other Adjustments |
|
|
|
|
Pro Forma |
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||||
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Net sales |
$ |
1,661,084 |
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$ |
875,026 |
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$ |
- |
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$ |
786,058 |
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Energy and related sales, net |
|
5,664 |
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|
5,664 |
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- |
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|
- |
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Total revenues |
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1,666,748 |
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|
880,690 |
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|
- |
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|
786,058 |
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Costs of products sold |
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1,463,783 |
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|
804,546 |
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(4,852 |
) |
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(2 |
) |
|
654,385 |
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Gross profit |
|
202,965 |
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|
|
76,144 |
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|
4,852 |
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|
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|
131,673 |
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|
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|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
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Selling, general and administrative expenses |
|
127,706 |
|
|
|
43,179 |
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|
22,101 |
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(3 |
) |
|
106,628 |
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(Gains) losses on dispositions of plant, equipment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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and timberlands, net |
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(21,113 |
) |
|
|
- |
|
|
|
35 |
|
|
(4 |
) |
|
(21,078 |
) |
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Operating income (loss) |
|
96,372 |
|
|
|
32,965 |
|
|
|
(17,284 |
) |
|
|
|
|
46,123 |
|
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Non-operating income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(17,464 |
) |
|
|
- |
|
|
|
2,340 |
|
|
(5 |
) |
|
(15,124 |
) |
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Interest income |
|
283 |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
283 |
|
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Other, net |
|
(615 |
) |
|
|
- |
|
|
|
(78 |
) |
|
(6 |
) |
|
(693 |
) |
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Total non-operating expense |
|
(17,796 |
) |
|
|
- |
|
|
|
2,262 |
|
|
|
|
|
(15,534 |
) |
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Income (loss) from continuing operations before income taxes |
|
78,576 |
|
|
|
32,965 |
|
|
|
(15,022 |
) |
|
|
|
|
30,589 |
|
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Income tax provision (benefit) |
|
14,001 |
|
|
|
- |
|
|
|
(13,819 |
) |
|
(7 |
) |
|
182 |
|
|
Income (loss) from continuing operations |
$ |
64,575 |
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|
$ |
32,965 |
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|
$ |
(1,203 |
) |
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$ |
30,407 |
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|
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Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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Basic |
$ |
1.49 |
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|
|
|
|
|
|
|
|
|
|
$ |
0.70 |
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Diluted |
|
1.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
0.69 |
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Notes to the Unaudited Pro Forma Condensed Consolidated Income Statements
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(1) |
Represents Specialty Paper’s historical segment income statement and are eliminated to give effect to the sale of the business unit. |
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(2) |
Reflects adjustments to exclude costs from the Pro Forma results (“Excluded Costs”) not previously allocated to or included in Specialty Papers business unit results. These Excluded Costs are directly related to Specialty Papers and are not expected to remain in future continuing operations. The Excluded Costs were partially offset by the inclusion of corporate shared service costs (“Included Costs”) that had historically been allocated to Specialty Papers. As the Included Costs are not directly attributable to Specialty Papers and will remain with Glatfelter, they are required to be included in continuing operations in the historical pro forma financial statements. These costs totaled $0.7 million, $0.8 million and $2.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
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expense to non-operating expenses in connection with the adoption of ASU 2017-07 totaling $(0.9) million, $6.0 million and $0.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
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(4) |
Reflects adjustments to exclude gains or losses from the disposition of property or equipment that had not previously been allocated to or included in Specialty Papers business unit results. These costs are directly related to Specialty Papers and are not expected to remain in future continuing operations. |
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(5) |
Reflects adjustments to exclude interest costs directly related to the revolving credit facility which will be reduced, to the extent possible, from the net proceeds of the sale. Such use of proceeds is required under the terms of the Company’s revolving credit facility. |
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(6) |
Reflects adjustments to exclude non-operating expenses of Specialty Papers not previously allocated or included in Specialty Papers business unit results. These costs are directly related to Specialty Papers and are not expected to remain in future continuing operations. In addition, the adjustment reflects the reclassification of non-service pension and post-retirement benefit expenses/(benefits) from selling, general and administrative expense in connection with the adoption of ASU 2017-07. |
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(7) |
Tax effects of removing the historical financial results of Specialty Papers and of the pro forma adjustments based on the effective tax rates, of the applicable tax jurisdictions, during the periods presented. |