Industry Reports

Deutsche Bank Reports Summaries

080429 Deutsche Bank Report - GLT's 1Q in 100 Words

Deutsche Bank - Equity Research

Glatfelter {Ticker: GLT, Closing Price: USD 14.67, Target Price: USD 20.00, Recommendation: Buy}.

* Best Q1 in sector, so far.  Reported $0.43.  Excluding special items, underlying was $0.25.  DB @ $0.20, FC @ $0.22.  Lower tax rate ($0.02) & interest expense ($0.03) helped Q1.  Unplanned mill outages in US created $0.03/share of headwind.   Land sales @

$4200/acre.

* Segments: 

* Specialty Papers.  EBIT = $11.4MM, 07Q1 = $6.7MM.  Key items: price = $6MM, productivity = $10.3MM, raw materials = ($9.1MM), volume/mix = ($0.9), 2 unplanned mill outages = ($1.7MM).   Order flow has eased a bit, but backlogs still solid.  Prices should improve in Q2.

* Composite Fibers (European mills).   EBIT = $6.1MM, 07Q1 = $5.0MM.  Price, volume & mix were all positive elements.  Raw materials & machine rebuild were negatives. 

* Other issues: (1) $15MM of land sales @ $4200/acre – no more likely in ‘08, (2) prices will rise in Q2 in most segments, but costs up as well, (3) Q2 has annual maintenance outage at 2 US mills - $0.22-0.25/share in costs.

* Change in view?   Modest positive.  Businesses are performing better.  Maintaining Buy rating.  Boosting '08 EPS from $1.00 to

$1.05 and maintaining '09 @ $1.25.