Good day, and welcome to the Glatfelter Second Quarter 2024 Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Ramesh Shettigar. Please go ahead, sir. Thank you, Anna. Good morning, and welcome to Glatfelter's 2024 second quarter earnings conference call. This is Ramesh Shettigar, Senior Vice President, Chief Financial Officer, and Treasurer. On the call to present our second quarter results is Thomas Fahnemann, President and Chief Executive Officer of Glatfelter, and myself. Before we begin our presentation, I have a few standard reminders. During our call this morning, we will use the term adjusted earnings as well as other non-GAAP financial measures. A reconciliation of these financial measures to our GAAP-based results is included in today's earnings release and in the investor slides, both of which are available on our website. We will also make forward-looking statements today that are subject to risks and uncertainties. Our 2023 Form 10-K, which has been filed with the SEC, and today's release, disclose factors that could cause our actual results to differ materially from these forward-looking statements. These statements speak only as of today, and we undertake no obligation to update them. I will now turn the call over to Thomas. Thanks, Ramesh. Hello, everyone, and welcome to Glatfelter's second quarter 2024 investor call. I'm pleased with the continued progress of the proposed merger with Berry's HH&S business during the second quarter, as we plan for the closing of the transaction later this year. The team continued to diligently progress the various legal and regulatory activities in preparation for when the business will operate under the name of Magnera, with Curt Begle as CEO, currently President of Berry's HH&S division. For today's earnings call, I will focus on Glatfelter's steadfast second quarter performance as we position the business to successfully launch Magnera. The highlights of our performance included several meaningful outcomes. We achieved $25.6 million of adjusted EBITDA for an $8.3 billion improvement compared to the same quarter last year. The composite fibers and Spunlace businesses achieved higher EBITDA of approximately $5 million and $3 million, respectively, compared to the same quarter last year. The results were driven by higher shipments, increased production, and rigorous management of price-cost gaps. The Airlaid material segment continued to experience softer demand, and therefore, we adjusted production downward, resulting in a $2 million decline in EBITDA compared to the same period in 2023. When combined, the segment's performance contributed to improved adjusted free cash flow, which was approximately $43 million higher compared to the second quarter of last year. While our markets remained mixed, especially in Europe, I'm pleased with the ongoing contributions and disciplined way of managing our business that resulted from our multi-year turnaround efforts. The improvements we are seeing in the performance of both composite fibers and Spunlace are trending in the right direction. I'm particularly pleased that Spunlace has delivered $20 million of adjusted EBITDA on a trailing twelve-month basis. Also, we are actively working to expand our Airlaid product portfolio through new product innovation to address continued demand challenges, which I will speak to towards the end of today's call. For these reasons, I remain confident in our ability to contribute for the long-term success of Magnera. I will now turn the call over to Ramesh. Thank you, Thomas. Following up on the financial highlights Thomas just provided, slide 5 shows a summary of second quarter results for the Airlaid materials segment. Revenues were down 14% on a constant currency basis versus the same period last year, driven primarily by lower selling prices of approximately $13 million and 4% lower shipments. Selling prices were lower, mainly due to cost pass-throughs, reflecting declines in raw material and energy costs in Europe, and selective price concessions to non-floating customers to regain volume. On a net basis, the price-cost gap was favorable to earnings by $1.2 million. Volume was lower year-over-year, primarily due to weaker shipments in hygiene and wipes categories. The decline in hygiene was largely driven by pricing actions taken in 2023 to protect margins and improve our price-cost dynamic. Conversely, the decline in wipes category was related to timing of customer orders, and we expect higher wipes volume in the third quarter. Operations were unfavorable by $2.2 million versus the prior year, primarily due to lower production of approximately 3,800 tons to manage inventory levels. Foreign exchange and related currency hedging negatively impacted earnings by $500,000, mainly due to the weaker euro. EBITDA margins for the segment improved by 20 basis points versus the prior year quarter. Slide six shows a summary of second quarter results for the composite fibers segment. Total revenues were down 6% on a constant currency basis, mainly due to lower selling prices of $7.5 million from floating contracts implemented with larger food and beverage customers and targeted pricing actions to preserve volume. Shipments were higher in all categories except wall cover when compared to the same period last year. Overall, the price-cost gap for composite fibers remained favorable, with prices declining by $7.5 million versus lower prices for key raw materials, energy, and freight, which improved earnings by $8.4 million versus the same quarter last year. Operations and other was favorable by $1.7 million, mainly due to higher inclined wire production. Foreign exchange was slightly favorable by $100,000, and EBITDA margins for the segment improved by 450 basis points versus the prior year quarter. Slide 7 shows a summary of second quarter results for the Spunlace segment. Revenues were up 4% on a constant currency basis, driven by higher shipments of 5%, mainly in the critical cleaning and hygiene categories. This was partially offset by lower selling prices of approximately $2 million, coming from raw material costs passed through provisions, primarily in the hygiene and wipes category. Raw material, energy, and other inflation were favorable by $4.1 million, resulting in positive price- cost gaps. Operations were $1.1 million favorable, mainly driven by higher production. Foreign exchange negatively impacted earnings by $400,000, coming from the weaker euro. And EBITDA margins for the segment improved by 410 basis points versus the prior year quarter. Slide 8 shows corporate costs and other financial items. Corporate costs were approximately $1.9 million lower versus the second quarter of last year. This was primarily driven by a loss recovery related to a fiber vendor for faulty materials supplied to Glatfelter in 2022. Strategic initiatives costs were again higher this quarter, driven by our proposed transaction with Berry's HH&S business, which we are expecting to close in the second half of this year. Slide 9 shows our cash flow summary. For the second quarter of 2024, our adjusted free cash flow was approximately $42 million higher versus the same period in 2023. This was largely driven by higher earnings of approximately $8 million and lower working capital usage of approximately $40 million, primarily from accounts payable. Capital expenditures were lower by $2 million, while other operating items lowered cash flow by approximately $7 million, largely driven by fewer vendor rebates this quarter compared to the same quarter last year. Slide 10 shows some balance sheet and liquidity metrics. Our leverage ratio, as calculated under the bank credit agreement, was 3.5 times as of June 30, and we had available liquidity of approximately $112 million at the end of Q2. This concludes my prepared remarks. I will now turn the call back to Thomas. Thank you, Ramesh. As demonstrated by our first half results, I'm pleased with the underlying performance of our business despite the challenging market backdrop, especially in Europe. Now, turning to our efforts in innovation. We have made very good progress on a few key initiatives during the second quarter. One initiative, in particular, targets the filter media specialty material to be manufactured within our Airlaid segment in Europe, which should generate a favorable mix relative to our hygiene portfolio. We have entered into a supply agreement with a new customer for this product, and we will continue to enhance the product to its full potential in the months ahead. Equally exciting for our customer and the team, this product is biodegradable and meets the standards established by the EU Single-Use Plastics Directive. In closing today's call, I want to take this opportunity to again thank our Glatfelter employees for their commitment and dedication to the company. As we are now well underway with the third quarter, I commend the entire team for their hard work these past several years, and especially this year, having to successfully run the day-to-day business while also preparing for the transition to Magnera. I'm proud to lead this team, and I feel very good about the capabilities of our people and look forward to their continued success for many years to come. I will now open the call for questions. And if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one if you would like to ask a question, and we'll pause for just a moment. And we'll now take our first question from Mike Jennings with TPG Angelo Gordon. Morning, guys, congrats on the quarter. Nice progress out of Q1. I guess maybe starting with some questions on the Airlaid segment. There's typically been a stronger performance in the back half of the year. What are you seeing out of seasonality in the business in the first instance? And then, I guess, kind of secondarily, you know, we've been talking about these volume-related issues now for a couple of quarters, primarily in Europe. Any sort of thoughts or visibility on those matters, whether it's either, you know, the market itself or the initiatives that you guys have undertaken to find other sales channels? Okay, Mike, maybe taking the second part of your question first. If we look at the volumes, yeah, we have seen some weakness in the market. What we're seeing right now is that North America is clearly healthier than Europe. We are still faced with some issues in Europe, but we are also seeing a little bit of an improvement in Europe. But definitely North America is much healthier than Europe. What we have done, and we mentioned this before, we are really looking in diversifying our product portfolio. And I'm really very happy that we were able to get a new product into the market, filter product. We signed a contract, so that really helps us. If you look at seasonality, I would also expect that the Airlaid volume, despite all the market challenges, will be stronger in the second half of this year than in the first half, and we're already kind of seeing some signs in July, so. Excellent. And I guess as Thomas, as we think about how to contextualize that, maybe in terms of utilization rates, I know there's some commentary around that last quarter. Any color you can provide on Airlaid in terms of sort of where we are from a utilization perspective in North America and sort of where we are in Europe? Yeah, in terms of-- I can, I can do it. Okay, go ahead. So, you know, in terms of utilization, Mike, on the Airlaid side, we were roughly around 80% utilization in the first half of 2024. For the second half, maybe slightly higher than that. Going into the second half of this year, we're seeing some demand pickup, as Thomas was mentioning. Historically, when we compare that to the last couple of years, we've been probably in the 85% to 90% range, so you can clearly see that with the softness in Airlaid, we've also had to adjust our production and utilization, so that's naturally come down. In Composite fibers, you know, utilization for the first half was around 90%, especially in the Inclined wire assets. Second half, we're expecting that to be maybe around 80-85%. And historically, also, we've been in the 80% to 85%. And then in Spunlace, first half was around 70% utilization, and we expect roughly the same going into the second half. And historically, we've been kind of between 60% and 70%, if that helps. Excellent. No, that's super helpful. Yeah, but coming to the, maybe one comment to the Spunlace. I think we always mentioned that there's a lot of upside as far as capacity is concerned. And you see now that we are kind of filling this capacity, positioning in the market. And again, also, I mean, we delivered little north of $20 million in EBITDA in Spunlace, if I look at the last 12 months. So that's really... And again, and there's still room for improvement there, because we have capacity available. Correct. Excellent. And maybe two last questions, if you'll indulge me. I guess, Ramesh, in terms of working capital evolution over the balance of the year, how are you thinking about that? I would say, Mike, expecting favorable working capital. You know, if you look at the entire second half, third quarter will most likely be a use of cash as we kind of continue to ramp up some production here going into the second half. Fourth quarter, usually production is a bit lower, you know, we're focused on inventory, working capital, and so on. So our fourth quarter is typically our strongest quarter, from a cash flow perspective, coming out of working capital. But net-net, you've seen we've been a user of cash in the first half of this year, and then we expect that to get unwound here in the second half of 2024. So positive, favorable working capital, as we get into the second half of this year. Great. And then I guess, just lastly, on the closing of the transaction, could you just remind us sort of what items are still left in order to complete the transaction? Any updates and timing on that? And then lastly- Yeah J ust a refresh on kind of the pro forma capital structure, including the guarantees and liens that both kind of the new debt and the amount of new debt, and then the existing debt that's not being refinanced will have. Sure. Yep. Maybe, maybe let me just talk about the regulatory issues, and then Ramesh can talk about the financial structure. Sure. Now, Mike, we have just seen we were able to get all the antitrust regulatory approvals done, so we are done with that one. We also received the private letter ruling from the IRS. We are still working on all the filings, which we have to do. This is ongoing, and actually, the thing which we still need to do is our shareholder meeting in order to get approval from our shareholders for this transaction. So as far as timing is concerned, we are still very optimistic that in the second half of this year, we'll be able to really close the transaction. So everything is kind of on time, if you will. There's no big issue right now. Yeah, those are the two key steps, the S-4 filing and then the proxy vote. Yeah. On the capital structure, Mike, and the financing, you know, I think what has been previously communicated is still holds true. New capital raise of about $1.6 billion. You know, this will take into account the paydown of our Angelo Gordon term loan. It will also take into account the paydown of our existing revolver borrowing. So kind of between those two existing pieces of debt, we're looking at about, you know, $300 million to $400 million. And if you look at the $1.6 billion capital raise, so we'll have, call it $1 billion of a dividend, roughly going up to Berry, and then the remaining proceeds will be used to pay off any closing transaction costs. So, the instruments, as of right now, still in the form of a term loan B, for the $1.6 billion capital raise. Magnera will also have a $350 million asset-based revolving credit facility. And then coming to our bonds, the $500 million Glatfelter bonds, those will still continue to remain outstanding, but they will become secured at the closing of the deal. And those will also be equally and ratably guaranteed by the same guarantors as the term loan B, which is the new financing. So our bonds, while they will remain outstanding, they will become secured. Got it. Thanks, guys. Yeah, no, that was perfect. Appreciate all the time and again, congratulations on the quarter. Thank you. Thank you, Mike. We'll now take our next caller, who is Roger Spitz with Bank of America. Thanks very much. I'm glad you confirmed the bonds will become ratably secured upon the occurrence of the- Good - $0.6 billion term loan. So thank you for that. Sure. The price cost spread was positive in Q2 in all three segments. I'm just curious, you know, how you- how were you able to do that in, during this period of rising pulp price market environment? Okay. Yeah, yeah, Roger, I mean, again, in general, we have 2 different types of arrangements, if you will. We have our pass-through customers, so that's more or less an automatic pass-through of raw material or energy price increases, or if the price goes down, we adjust it downwards. You have to think about this: We have a time lag there, so normally, I would say 3 months, sometimes even 6 months for one customer. But normally there's a quarter time lag, and sometimes it hurts you, and sometimes you gain a little bit. But this is one part of the customers. And the other one, and again, this was one of the really focus areas, which we said because we were kind of caught a little bit in 2022 when we had a huge gap there. We are raising prices. We are with customers and kind of raise prices, and this is actually the result that if I look at actually for customers who are not on a pass-through right now, we captured this, and this was actually then the result is that we are still positive. And you should also see more coming in the third quarter, based on the raw material increases we are seeing in the second quarter. This was all part of the turnaround strategy, right? That's part of the strategy where we kind of made it very clear also, and our salespeople did a good job, and there was a lot of discussion. But yeah, so that's, that's kind of these two areas. Again, people who are not on a formula, we can do it relatively fast. There's always a little delay, but we can do it relatively fast. People on pass-through, three months, four months delay. Got it. Thank you for that. And you just spoke a little bit about guidance on, you know, working capital. I guess the last two quarters, you haven't sort of updated your original guidance, likely due to the pending merger. But are you, are you able to give any 2024 guidance overall, like, you know, the updated- I mean, we- Guidance for the EBITDA, CapEx, et cetera? Okay, I mean, let me just talk about the EBITDA, Roger. I mean, we, we have given some guidance, and there's really no change to the guidance. That's why we didn't mention it. Ah. And so from that standpoint, we still feel pretty good. 110 to 120. 110 to 120. If I look at right now, maybe a little bit of a lower end than the higher end of the 110 to 120, but we feel pretty confident that we—there's no change to our guidance. Roger, if you... I can hit the, you know, other elements like cash interest, still around $70 million. CapEx, between 30-35, still holds true. Cash taxes between 15-20. Working capital, you know, still roughly around breakeven, I would say, to maybe slightly positive. And then we've got, you know, other cash costs as part of the turnaround strategy, as part of the strategic initiatives, and so on, of between 20-25. So I would say, net cash flow is still walking down to about a -$30 for a full year. Perfect. Thank you very much. That's it for me. Okay, good. Happy, happy to do it. Thanks so much. That concludes today's question and answer session. I'd like to turn the conference back over to Mr. Fahnemann for any additional or closing comments. Okay. Yeah, thank you. Thank you so much to take the time for our quarter update and the call. Wish everybody a great day, and we'll talk to you later. Thank you. Thank you. Once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.