Executive Summary

Q2 2024 delivered sequential improvement and sharp year-over-year progress: net sales of $329.4M, GAAP loss from continuing operations of $15.8M ($0.35 EPS), Adjusted EBITDA of $25.6M (+$8.4M YoY) and Adjusted EPS of ($0.25) vs ($0.45) in Q2 2023. Composite Fibers and Spunlace drove gains; Airlaid remained soft due to European market weakness .
Management reaffirmed full-year Adjusted EBITDA guidance of $110–$120M, noting the outlook is tracking toward the lower end; CFO reiterated cash interest (~$70M), capex ($30–$35M), cash taxes ($15–$20M), working capital roughly breakeven to slightly positive, and net cash flow ≈ ($30M) for FY24 .
The proposed Berry HHNF reverse Morris trust remains on track for closing in H2 2024; antitrust and IRS tax rulings are completed, with remaining steps focused on S-4 filing and shareholder approval; pro forma financing includes ~$1.6B Term Loan B, $350M ABL, and GLT’s $500M bonds becoming secured at close .
Airlaid seasonality and new product initiatives (biodegradable filter media in Europe) are expected to aid mix and volumes in the back half, while Spunlace’s turnaround is now delivering ~$20M TTM Adjusted EBITDA capacity momentum; management highlighted ongoing European demand volatility as a key risk/tailwind balance .
S&P Global Wall Street consensus estimates for Q2 2024 were unavailable via the tool (missing mapping), so beat/miss vs estimates cannot be determined; all comparisons are vs prior periods and company guidance (Values retrieved from S&P Global where used; consensus not available).

What Went Well and What Went Wrong

What Went Well

Spunlace EBITDA rose to $5.6M (+$3.4M YoY) with margin improving 410 bps YoY, driven by favorable price-cost gap, higher shipments, and operational gains; CEO emphasized segment repositioning and sustainable earnings post-merger .
Composite Fibers EBITDA more than doubled to $9.7M (+$4.9M YoY), with improved price-cost dynamics and higher inclined wire production; EBITDA margin +450 bps YoY as targeted pricing actions stabilized volumes .
Corporate unallocated costs improved YoY, aided by recovery related to faulty fiber supply (loss recovery), supporting lower total corporate costs vs prior year .

What Went Wrong

Airlaid Materials EBITDA fell to $15.1M (−$2.3M YoY) on weaker European hygiene/wipes demand, lower production to manage inventories, and unfavorable FX; EBITDA margin only +20 bps YoY despite headwinds .
GAAP loss from continuing operations remained sizable at ($15.8M); interest expense stayed elevated ($17.9M), and tax provisions in foreign jurisdictions contributed to the net loss .
Capacity utilization and absorption in Airlaid lag historical levels (~80% 1H24 vs 85–90% historically), pressuring margins; management highlighted competitive pressures from alternate substrates in Europe as a persistent challenge .

Financial Results

Summary vs Prior Year and Prior Quarters

Metric	Q2 2023	Q4 2023	Q1 2024	Q2 2024
Net Sales ($USD Millions)	$357.0	$320.4	$327.3	$329.4
GAAP EPS – Continuing Ops ($)	($0.82)	($0.19)	($0.58)	($0.35)
Adjusted EPS ($)	($0.45)	($0.04)	($0.33)	($0.25)
Adjusted EBITDA ($USD Millions)	$17.3	$25.1	$23.8	$25.6
Gross Profit ($USD Millions)	$18.1	$30.9	$34.5	$36.8
Gross Margin (%)	5.1%	9.6%	10.5%	11.2%

Notes:

Adjusted metrics reflect non-GAAP reconciliations provided by the company .
Gross margin is computed from reported gross profit and net sales (sources cited in cells).

Segment Breakdown (Q2 2024 vs Q2 2023)

Segment	Net Sales Q2’23 ($M)	Net Sales Q2’24 ($M)	EBITDA Q2’23 ($M)	EBITDA Q2’24 ($M)	EBITDA % Q2’23	EBITDA % Q2’24
Airlaid Materials	$152.5	$130.6	$17.4	$15.1	11.4%	11.6%
Composite Fibers	$125.7	$117.2	$4.8	$9.7	3.8%	8.3%
Spunlace	$79.4	$82.2	$2.2	$5.6	2.7%	6.8%

Operating KPIs

KPI	Q1 2024	Q2 2024
Tons Shipped – Airlaid (metric)	38,341	37,795
Tons Shipped – Composite Fibers (metric)	25,002	25,735
Tons Shipped – Spunlace (metric)	16,091	15,937
Unallocated Operating Expense ($M)	($17.5)	($8.5)
Interest Expense ($M)	$17.7	$17.9
Cash & Equivalents ($M)	$30.2 (3/31/24)	$33.9 (6/30/24)
Total Debt ($M)	$875.7 (3/31/24)	$870.3 (6/30/24)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2024	$110–$120	$110–$120 (tracking to lower end)	Maintained
CapEx ($M)	FY 2024	$30–$35 (reiterated)	$30–$35	Maintained
Cash Interest ($M)	FY 2024	~$70 (reiterated)	~$70	Maintained
Cash Taxes ($M)	FY 2024	$15–$20 (reiterated)	$15–$20	Maintained
Working Capital	FY 2024	Breakeven to slightly positive (reiterated)	Breakeven to slightly positive	Maintained
Net Cash Flow ($M)	FY 2024	≈ ($30) (reiterated)	≈ ($30)	Maintained

Earnings Call Themes & Trends

Topic	Q4 2023 (Q-2)	Q1 2024 (Q-1)	Q2 2024 (Current)	Trend
European macro softness	Airlaid/tabletop weak; EBIDTA pressured; extended maintenance impacted Q4	Europe most difficult market; Airlaid EBITDA −$9M YoY	Continued weakness in Europe; Airlaid volumes/mix soft	Persistent headwind
Price-cost gap management	Improved across segments; Composite Fibers gaining	Favorable in CF and Spunlace; selective pricing actions	Positive price-cost across all segments despite rising pulp, aided by lagged pass-through	Improving/managed
Spunlace turnaround	Adjusted EBITDA $5.7M; operational improvements	+$5M YoY EBITDA; Sontara brand strength; TN facility recovery	EBITDA $5.6M; TTM ~$20M; capacity for more	Strengthening
Airlaid diversification/innovation	Strategy to broaden portfolio; competition from alt substrates	Qualified new Airlaid solutions, plant-based caps (Europe)	Biodegradable filter media, EU SUP compliance; supply agreement	Building pipeline
Merger progress (Berry HHNF)	Announced RMT; FY24 EBITDA guide	HSR waiting period expired	Antitrust/FDI clearances; IRS PLR; S-4 + shareholder vote pending	Advancing to close H2
Liquidity/leverage	Leverage 3.4x; 2023 adj FCF use ($40M)	Liquidity ~$85M; leverage 3.7x	Liquidity ~$112M; leverage 3.5x	Improving sequentially

Management Commentary

“We achieved $25.6 million of adjusted EBITDA… Composite Fibers and Spunlace… driven by higher shipments, increased production and rigorous management of price cost gaps.” — Thomas Fahnemann .
“Spunlace… generating $5.6 million in EBITDA… We have now repositioned this segment for continued growth… sustainable earnings… post-merger.” — Thomas Fahnemann .
“The European markets and consumer demand still pose a challenge… Composite Fibers delivered ~$5 million of EBITDA growth… Airlaid… focused on optimizing product mix and improving price-cost gap.” — Thomas Fahnemann .
“Our leverage ratio… was 3.5x… available liquidity of approximately $112 million at the end of Q2.” — Ramesh Shettigar .

Q&A Highlights

Airlaid seasonality/utilization: Expect stronger H2 volumes; Airlaid utilization ~80% in 1H24 (vs historical 85–90%), slightly higher in H2 as demand picks up, especially North America .
Working capital/cash flow cadence: Q3 likely a use as production ramps; Q4 typically strongest for working capital release; net FY24 working capital expected favorable vs 1H usage .
Merger steps/financing: Regulatory approvals complete; remaining S-4 and proxy; financing plan includes ~$1.6B Term Loan B, $350M ABL; GLT $500M bonds become secured and guaranteed at closing; ~$1B dividend to Berry from proceeds .
Price-cost spread amid rising pulp: Mix of pass-through contracts (with 3–6 month lag) and non-floating price actions; expect further benefits in Q3 from Q2 raw material increases .
Guidance reaffirmation: FY24 Adjusted EBITDA $110–$120M (tracking to lower end); capex $30–$35M; cash interest ~$70M; cash taxes $15–$20M; net cash flow ≈ ($30M) .

Estimates Context

S&P Global consensus estimates for Q2 2024 (Revenue, Primary EPS) were unavailable due to missing mapping for GLT in the SPGI CIQ company map, so beat/miss vs consensus cannot be determined. Values retrieved from S&P Global (consensus not available).

Metric	Q2 2024 Actual	Q2 2024 Consensus
Revenue ($USD Millions)	$329.4	Unavailable (S&P Global)
Primary EPS ($)	($0.35)	Unavailable (S&P Global)

Key Takeaways for Investors

Boldly positive YoY operating leverage: Adjusted EBITDA +48% YoY to $25.6M; Adjusted EPS improved to ($0.25), driven by Spunlace and Composite Fibers strength despite Airlaid softness — supports confidence in FY24 guidance range .
Airlaid remains the swing factor: Expect seasonal H2 improvement and incremental mix benefits from new eco-friendly filter media; monitor European demand normalization and alternate substrate competition risk .
Spunlace momentum is durable: TTM ~$20M Adjusted EBITDA with capacity to grow; operational improvements and brand differentiation (Sontara) provide ongoing margin support .
Liquidity/leverage improved sequentially: Liquidity ~$112M and leverage 3.5x; focus on working capital release in Q4; watch interest expense headwind as rates remain elevated .
Merger as a structural catalyst: Closing steps advancing; financing outlined and GLT bonds to be secured post-close — potential de-risking of capital structure; integration planning signals operational execution readiness .
With consensus unavailable, traders should anchor to company guidance and sequential KPIs; upside skew hinges on Airlaid volume/mix recovery and continued price-cost execution amid pulp cost dynamics .
Legal settlement ($6.5M) to be recognized in Q3 discontinued ops provides a non-operating tailwind to reported results without core earnings impact .

Bolded surprises this quarter:

Adjusted EBITDA +$8.4M YoY to $25.6M on segment mix and operational gains .
Composite Fibers EBITDA more than doubled YoY to $9.7M with improved inclined wire utilization .
Spunlace EBITDA +158% YoY to $5.6M with higher shipments and better operations .

Glatfelter Corp (GLT)·Q2 2024 Earnings Summary