On an adjusted basis, earnings from continuing operations for the second quarter of 2022 and 2021 were a loss of $1.6 million, or $0.04 per share, compared with adjusted earnings of $8.0 million, or $0.18 per share, respectively. Adjusted earnings is a non-GAAP financial measure for which a reconciliation to the nearest GAAP-based measure is provided within this release. The 2021 results include the acquisitions of Georgia-Pacific’s U.S. nonwovens business (“Mount Holly”) and Jacob Holm ("Spunlace") as of May 13, 2021 and October 29, 2021, respectively.

Consolidated net sales for the three months ended June 30, 2022 and 2021, totaled $364.0 million and $244.9 million, respectively. On a constant currency basis, net sales for Composite Fibers decreased 4.4% and increased 47.7% for Airlaid Materials (including Mount Holly). The Spunlace segment, formed in connection with the Jacob Holm acquisition, had net sales of approximately $96.9 million for the second quarter.

“In the second quarter, we outperformed operating profit expectations at the enterprise level driven by Composite Fibers and Airlaid Materials, however, we were disappointed with our Spunlace segment results," said Dante C. Parrini, Chairman and Chief Executive Officer. “By intensifying efforts to mitigate inflationary pressures, we were successfully able to increase prices, drive operational efficiencies and tightly manage spending in the Composite Fibers and Airlaid Materials segments. Since announcing our dynamic pricing model initiative for the Composite Fibers segment in early 2022, we successfully converted 50% of its revenue base to a cost pass-through mechanism ahead of plan, which is materially helping to offset the impact of higher raw material, energy and logistics costs. Airlaid Materials delivered solid performance with profitability stronger than expected due to pricing actions including energy surcharges, favorable product mix and the successful execution of a capital project at our Falkenhagen facility.”

Mr. Parrini continued, “Our Spunlace segment faced substantially higher than expected inflationary challenges during the quarter and our price increases were insufficient to offset the impact. Supply chain disruptions also affected raw material availability, which curtailed production and product shipments. As a result, the segment was unable to sufficiently narrow the price/cost gap for its products primarily due to the impact of rising energy prices in Europe and the impact of higher oil prices on certain raw materials. We recently took aggressive cost actions to further right-size the legacy Jacob Holm leadership team and more deeply integrate the segment into our existing operating model, while concurrently implementing additional pricing actions to counteract inflation. Despite the near-term challenges in this segment, we remain committed to its success and the strategic purpose it contributes to the Glatfelter portfolio.”