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Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 16, 2001
P. H. GLATFELTER COMPANY
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(Exact Name of Registrant as Specified in Charter)
Pennsylvania 1-3560 23-0628360
(State or Other (Commission File (IRS Employer
Jurisdiction of Incorporation) Number) Identification No.)
96 South George Street, Suite 500
York, PA 17401
(Address of Principal (Zip Code)
Executive Offices)
(717) 225-4711
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On May 16, 2001, the Registrant reached a definitive agreement to sell
its Ecusta Division to RFS (US) Inc., a subsidiary of privately-held PURICO
(IOM) Limited of the United Kingdom, for approximately $39 million in cash, plus
the assumption of certain liabilities related to the business.
PURICO (IOM) Limited is a closely-held firm associated with the United
Kingdom's Melton Medes Group, whose founder and Chairman is businessman Nat
Puri. The Group's Robert Fletcher Company is a leader in the production of
tobacco papers in the United Kingdom and China.
The transaction involves the sale of the assets of the Registrant's
Ecusta mill, which produces tobacco papers and lightweight printing papers,
together with the stock of the Ecusta operating subsidiaries in Australia and
Canada and certain of the Registrant's receivables. The Ecusta Division had
approximately $170 million and $42 million in net sales for the year 2000 and
the first quarter of 2001, respectively. The Ecusta Division had an operating
pre-tax loss of approximately $1 million in the year 2000 and operating pre-tax
income of approximately $2 million in the first quarter of 2001. The transaction
will be modestly dilutive to earnings per share and will also result in a
one-time, after-tax charge against earnings of approximately $25 million, or
$.59 per share, in the second quarter of 2001, when the transaction is expected
to be completed.
Related to the transaction, the Registrant's Schoeller & Hoesch GmbH &
Co. subsidiary in Germany had entered into a two-year agreement to manufacture
and supply tobacco papers to RF & Sons GmbH, a PURICO affiliate also located in
Germany. Schoeller & Hoesch plans to transition its tobacco papers production to
other products over the next two years. Schoeller & Hoesch also produces tea bag
and other long fiber products, as well as overlay papers and printing papers.
On May 16, 2001, the Registrant issued the following press release:
"P. H. GLATFELTER COMPANY ANNOUNCES AGREEMENT TO SELL
ITS NORTH CAROLINA TOBACCO PAPERS BUSINESS
"YORK, PA, WEDNESDAY, MAY 16, 2001 - P. H. Glatfelter Company
(NYSE: GLT) today announced that it had reached a definitive
agreement to sell its Ecusta Division to RFS (US) Inc., a
subsidiary of privately-held PURICO (IOM) Limited of the
United Kingdom, for approximately $39 million in cash, plus
the assumption of certain liabilities related to the business.
"PURICO (IOM) Limited is a closely-held firm associated with
the United Kingdom's Melton Medes Group, whose founder and
Chairman is businessman Nat Puri. The Group's Robert Fletcher
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Company is a leader in the production of tobacco papers in the
United Kingdom and China.
"The transaction involves the sale of the assets of P. H.
Glatfelter Company's Ecusta mill, which produces tobacco
papers and lightweight printing papers, together with the
stock of the Ecusta operating subsidiaries in Australia and
Canada and certain Company receivables. The Ecusta Division
had approximately $170 million and $42 million in net sales
for the year 2000 and the first quarter of 2001, respectively.
The Company indicated that the transaction will be modestly
dilutive to earnings per share. The transaction will also
result in a one-time, after-tax charge against earnings of
approximately $25 million, or $.59 per share, in the second
quarter of 2001, when the transaction is expected to be
completed. The transaction is subject to normal closing
conditions.
"The sale of our Ecusta Division marks another step forward in
the transformation we are undertaking to realize our long-term
strategic Vision to enhance revenue and increase return on
capital," said George H. Glatfelter II, Chairman and Chief
Executive Officer of P. H. Glatfelter Company. "We conducted a
thoughtful review of the tobacco papers business and
determined that continued operation of the Ecusta facility
would have required substantial additional investment in
technology, limiting our ability to pursue other growth
opportunities that will help us realize our Vision."
"Mr. Glatfelter said: "The divestiture will help us pursue a
strategic plan that supports our Vision to achieve $1 billion
in sales revenue and an average return on capital employed of
17 percent by the year 2004. Exiting the tobacco papers
business will provide us with the opportunity to re-focus
management and re-deploy capital in promising new areas of
specialty papers and engineered products which should
contribute to revenue growth and increased returns for our
shareholders."
"Mr. Glatfelter added: "We are pleased that PURICO is
strategically committed to tobacco papers and lightweight
printing papers and has an expressed willingness to invest the
capital required to upgrade the facilities to meet the
technological requirements needed to compete in the markets
for those products. Importantly, it will help to ensure
Ecusta's employees of continued jobs and competitive benefits
and the continuity of supply to customers."
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"Related to the transaction, P. H. Glatfelter Company said its
Schoeller & Hoesch GmbH & Co. subsidiary in Germany had
entered into a two-year agreement to manufacture and supply
tobacco papers to RF & Sons GmbH, a PURICO affiliate also
located in Germany. The Company indicated that Schoeller &
Hoesch plans to transition its tobacco papers production to
other products over the next two years. Schoeller & Hoesch
also produces tea bag and other long fiber products, as well
as overlay papers and printing papers.
"Headquartered in York, Pennsylvania, P. H. Glatfelter Company
is a global manufacturer of specialty paper and engineered
products. U.S. operations include mills in Spring Grove, PA
and Neenah, WI. International operations include facilities in
Germany, France and the Philippines. The Company's common
stock is traded on the New York Stock Exchange under the
ticker symbol GLT.
"Deutsche Banc Alex. Brown served as financial advisor to P.
H. Glatfelter Company in connection with the transaction.
"Any statements set forth in this press release with regard to
the Company's goals for revenues and return on capital, its
projected financial results or cash flow and other aspects of
its business may constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Although the Company makes such statements based on
assumptions that it believes to be reasonable, there can be no
assurance that actual results will not differ materially from
the Company's expectations. Factors that could cause or
contribute to actual results differing materially from such
forward-looking statements are discussed in the Company's
Securities and Exchange Commission filings."
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
P. H. GLATFELTER COMPANY
(Registrant)
By: /s/ C. Matthew Smith
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Date: May 16, 2001 Title: Chief Financial Officer
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