P. H. Glatfelter Company Announces 12% Increase in 3rd Quarter 2000 Earnings Compared to 3rd Quarter 1999.

Business Editors

YORK, Pa.--(BUSINESS WIRE)--Oct. 16, 2000

P. H. Glatfelter Company (NYSE:GLT) announced today that net income and earnings per share for the three months ended September 30, 2000 were $7.2 million and $.17, respectively, as compared to $6.4 million and $.15, respectively, for the third quarter of 1999.

Net sales for the three months ended September 30, 2000 were $170.5 million, slightly higher than the net sales for the third quarter of 1999.

Net income and earnings per share for the first nine months of 2000 were $31.9 million and $.75, respectively, as compared to $27.1 million and $.64, respectively, for the first nine months of 1999. Results for the nine months ended September 30, 2000 reflect the impact of an after-tax unusual charge of $2.1 million, or $.05 per share, recorded during the first quarter of 2000.

Earnings per share for the first nine months of 2000, excluding this one-time charge, were $.80. Net sales for the nine months ended September 30, 2000 were $529.3 million, a 5% increase from $503.1 million in the first nine months of 1999.

"Our third quarter financial results are always negatively affected by the impact of scheduled annual maintenance shutdowns at our U.S. facilities," said George Glatfelter II, Chairman, CEO and President. "This quarter's results were also hurt by the transitional costs of downsizing our Pisgah Forest mill. This transition is nearing completion, and more recent results for the mill are close to our initial projections. Although we are not satisfied with the third quarter financial results, we are pleased with the current strength of our markets, the operating performance of all of our mills and the outlook for the fourth quarter.

"We are beginning to implement the IMPACT project, which will ultimately provide the organizational design and information systems support necessary to implement our business strategy. We also continue to realize cost savings through the DRIVE initiative and remain on pace to achieve our target of $50 million in sustainable, annual pre-tax cost savings. We are currently realizing savings on projects that when fully implemented by the fourth quarter of 2001 will result in $40 million of expected annual savings. The remaining $10 million should be realized, on an annualized basis, by late-2002. Increased costs in certain areas of our business, primarily in energy and pulp, are currently negating a portion of our DRIVE savings."

The Company reported that cash generation remains strong. The Company's net debt/capital ratio dropped to 36.5% as of September 30, 2000 from 41.5% at the end of 1999. The Company's net debt/capital ratio was 48.3% at the end of the first quarter of 1998 following the acquisition of Schoeller and Hoesch.

Mr. Glatfelter added, "Our outlook for cash generation remains positive. We are fully committed to the IMPACT project and are excited about the business transformation that the project will generate. Despite a commitment to invest $49 million over the next two years in this initiative, our financial projections support the opportunity to re-institute disciplined share repurchases in the future."

Any statements set forth in this press release with regard to the Company's expectations as to industry conditions, demand for its products, its cost reductions, its projected financial results or cash flow, share repurchases 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.

P. H. Glatfelter Company will hold a conference call today at 11 AM E.S.T. to discuss third quarter results. The conference call may be accessed via the internet at the Company's website at http://www.glatfelter.com or at the Streetfusion website at http://www.streetfusion.com.

                       P. H. GLATFELTER COMPANY
                          YORK, PENNSYLVANIA

             SUMMARIZED CONSOLIDATED FINANCIAL INFORMATION
                (in thousands except per share amounts)

                           Three Months Ended      Nine Months Ended
                              September 30           September 30
                           ------------------      -----------------
                          2000          1999        2000       1999
                          ----          ----        ----       ----
Net sales              $170,547      $170,030    $529,304   $503,110
Income before
 income taxes            11,180         9,949      49,689(a)  42,720
Income taxes - current
 and deferred             4,001         3,549      17,828     15,637
Net income                7,179         6,400      31,861(b)  27,083
Basic and diluted
 earnings per share      $ 0.17        $ 0.15      $ 0.75(b)  $ 0.64
Number of shares used
 in per share
  calculations:
     Basic               42,361        42,195      42,316     42,155
     Diluted             42,499        42,554      42,458     42,402


(a) After impact of a one-time, pre-tax charge of $3,336,000 primarily
related to the previously announced decision to reconfigure the
Company's tobacco papers business by reducing production capacity and
associated salary and labor costs.

(b) After impact of a one-time, after-tax charge of $2,120,000, or
$.05, related to the costs described in (a) above.