Glatfelter Corporation (GLT): Business Model Canvas [10-2024 Updated]

Glatfelter Corporation (GLT) operates at the forefront of engineered materials, delivering innovative solutions across multiple industries. Their strategic partnerships and a strong commitment to sustainability underpin their robust business model, which is intricately designed around key activities like production and research. Explore how Glatfelter’s value propositions cater to diverse customer segments, driving growth and enhancing their competitive edge in the market.

Glatfelter Corporation (GLT) - Business Model: Key Partnerships

Collaboration with Berry Global for merger

In February 2024, Glatfelter Corporation entered into a definitive agreement with Berry Global Group, Inc. for a merger that would involve Berry spinning off and merging its Health, Hygiene, and Specialties segment with Glatfelter. This merger is structured as a Reverse Morris Trust transaction, wherein Berry shareholders will hold 90% of the outstanding shares of Glatfelter post-merger. The transaction has received unanimous approval from both companies' boards and is expected to close on November 4, 2024 .

Relationships with raw material suppliers

Glatfelter's operational strategy heavily relies on stable relationships with raw material suppliers. As of September 30, 2024, the company reported a 10% decrease in primary raw material input costs, translating to a reduction of approximately $36.6 million compared to the same period in 2023. This decline is attributed to cost pass-through arrangements that Glatfelter has in place, which mitigate the effects of fluctuating raw material prices .

Period	Primary Raw Material Input Costs	Decrease (%)	Decrease in Costs (in millions)
First nine months of 2024	$221.4 million	-10%	$36.6 million
First nine months of 2023	$258.0 million	N/A	N/A

Partnerships with distributors and logistic firms

Glatfelter has established key partnerships with various distributors and logistics firms to enhance its supply chain efficiency. As of September 30, 2024, Glatfelter reported net sales of $988.8 million for the nine months ended, with approximately 24.5% of this revenue derived from the Spunlace segment, which relies significantly on effective distribution channels .

Engagement with regulatory agencies

Glatfelter actively engages with regulatory agencies to ensure compliance with industry standards and environmental regulations. This proactive approach is critical, especially in light of the ongoing scrutiny regarding sustainability practices. The company has incurred costs related to regulatory compliance, amounting to approximately $9.6 million in income tax provisions for the first nine months of 2024 .

Engagement Type	Cost (in millions)	Details
Income Tax Provisions	$9.6 million	Primarily related to tax provisions for foreign jurisdictions and reserves for uncertain tax positions
Compliance Costs	$3.2 million	Associated with environmental and operational regulations

Glatfelter Corporation (GLT) - Business Model: Key Activities

Production of Engineered Materials

The production of engineered materials at Glatfelter Corporation focuses on three main segments: Airlaid Materials, Composite Fibers, and Spunlace. For the nine months ended September 30, 2024, the net sales by segment were as follows:

Segment	Net Sales (in thousands)	Percentage of Total Sales
Airlaid Materials	$400,419	40.5%
Composite Fibers	$347,054	35.0%
Spunlace	$242,770	24.5%
Total	$988,800	100.0%

In Q3 2024, total production volumes amounted to 76,466 metric tons, demonstrating a slight increase compared to previous periods. The production of engineered materials is critical to meeting customer demand across various applications in hygiene, industrial, and specialty markets.

Research and Development for New Products

Glatfelter invests significantly in research and development (R&D) to innovate and enhance its product offerings. The R&D expenses are integrated into the overall operational costs, contributing to the company’s ability to maintain competitive advantage. For the nine months ended September 30, 2024, Glatfelter's capital expenditures related to R&D were approximately $21.7 million, which is part of the total capital expenditures of $21.7 million for the same period.

Marketing and Sales Operations

Marketing and sales operations are essential for Glatfelter to sustain its market presence and drive revenue growth. The company engages in various marketing strategies to promote its engineered materials. The sales for the first nine months of 2024 totaled $988.8 million, down from $1,065.1 million in the same period of 2023, reflecting a decline attributed to lower selling prices and market conditions.

Supply Chain Management

Effective supply chain management is crucial for Glatfelter, especially given the fluctuations in raw material costs and global logistics challenges. In the nine months ended September 30, 2024, costs of products sold were $882.0 million, leading to a gross profit of $106.8 million, representing a gross profit margin of 10.8%. The company has focused on optimizing its supply chain to mitigate risks associated with pricing volatility and to ensure timely delivery of materials to its manufacturing facilities.

As of September 30, 2024, Glatfelter reported a net loss of $57.9 million, with losses primarily driven by ongoing strategic initiatives and operational challenges, including higher costs associated with its turnaround strategy.

Glatfelter Corporation (GLT) - Business Model: Key Resources

Manufacturing facilities in multiple locations

Glatfelter operates several manufacturing facilities across different global locations, including the United States, Germany, France, and the Philippines. As of 2024, the company has significant production capabilities in:

Facility Location	Type of Product	Annual Production Capacity (Tons)
Glatfelter, Pennsylvania	Airlaid Materials	Approximately 40,000
Glatfelter, Germany	Composite Fibers	Approximately 50,000
Glatfelter, France	Spunlace	Approximately 30,000
Glatfelter, Philippines	Specialty Papers	Approximately 20,000

Skilled workforce with industry experience

The company employs around 2,200 skilled workers globally, with many holding extensive experience in specialty materials manufacturing. This workforce is critical for maintaining operational efficiency and innovation in production processes.

Strong brand recognition in specialty materials

Glatfelter has established a strong brand in the specialty materials market, particularly in airlaid and nonwoven products. The company reported net sales of $988.8 million for the nine months ended September 30, 2024, showcasing its market presence and brand strength.

Segment	Net Sales (2024)	Percentage of Total Sales
Airlaid Materials	$400.4 million	40.5%
Composite Fibers	$347.1 million	35.0%
Spunlace	$242.8 million	24.5%

Intellectual property and patents

Glatfelter holds numerous patents related to its production processes and materials. As of September 30, 2024, the company reported intangible assets amounting to approximately $98.9 million, which includes technology and related patents essential for maintaining competitive advantages in the specialty materials sector.

Intangible Asset Type	Value (2024)
Goodwill	$108.6 million
Technology and Related	$18.4 million
Customer Relationships	$23.6 million
Tradenames	$29.9 million

Glatfelter Corporation (GLT) - Business Model: Value Propositions

High-quality engineered materials for diverse applications

Glatfelter Corporation specializes in producing engineered materials that serve a variety of industries, including hygiene, food and beverage, and industrial applications. In the first nine months of 2024, the company reported net sales of $988.8 million, a decrease from $1.065 billion in the same period of 2023, largely driven by lower selling prices and market conditions.

Segment	2024 Net Sales (in millions)	2023 Net Sales (in millions)	Change (%)
Airlaid Materials	$400.4	$459.0	-12.8%
Composite Fibers	$347.1	$368.0	-5.6%
Spunlace	$242.8	$239.9	+1.1%

Customizable solutions for specific customer needs

Glatfelter offers customizable solutions tailored to meet specific customer requirements. As of September 30, 2024, approximately 76% of net sales in Airlaid Materials were from contracts with pass-through provisions, reflecting the company's ability to adapt to changing raw material costs.

Commitment to sustainability and eco-friendly practices

The company emphasizes sustainability across its operations. In the first nine months of 2024, Glatfelter's primary raw material input costs decreased by 15%, contributing to more eco-friendly production processes. Additionally, the company is actively working on integrating eco-friendly materials into its product offerings, aligning with global sustainability trends.

Competitive pricing and reliable delivery

Glatfelter maintains competitive pricing through efficient operations and cost management. The company experienced a gross profit of $106.8 million for the nine months ended September 30, 2024, with a gross profit margin of 10.8%, up from 9.3% in 2023. This improvement indicates effective cost control measures that support its pricing strategy.

Financial Metric	2024	2023	Change
Gross Profit	$106.8 million	$98.8 million	+8.2%
Operating Income	$8.7 million	($1.7 million)	Improvement
Net Loss	($57.9 million)	($70.4 million)	+17.8%

Glatfelter Corporation (GLT) - Business Model: Customer Relationships

Direct sales teams for personalized service

Glatfelter Corporation employs dedicated sales teams to provide personalized service to its customers. This approach enhances customer satisfaction and loyalty. The sales teams are responsible for managing relationships with key accounts, ensuring tailored solutions that meet specific customer needs.

Customer support for product inquiries and issues

The company offers robust customer support to address product inquiries and resolve issues. This support is critical in maintaining customer relationships and ensuring product satisfaction. For instance, Glatfelter reported an increase in customer inquiries due to a rise in product complexity, necessitating enhanced support services.

Long-term contracts with key clients

Glatfelter has established long-term contracts with key clients across its business segments. As of September 30, 2024, approximately 76% of net sales in Airlaid Materials and 53% in Spunlace were linked to contracts with pass-through provisions, ensuring price stability and supply assurance for customers.

Feedback loops for product improvement

The company actively engages in feedback loops with customers to drive product improvement. This process includes regular surveys and direct communication to gather insights on product performance and customer satisfaction. The feedback collected is utilized to refine product offerings and enhance service delivery.

Aspect	Details
Sales Team Structure	Dedicated teams for key accounts, enhancing personalized service
Customer Support	Increased inquiries due to product complexity; dedicated support teams in place
Long-term Contracts	76% of Airlaid Materials net sales and 53% of Spunlace net sales linked to contracts with pass-through provisions
Feedback Mechanisms	Regular surveys and direct communication with customers for continuous product improvement

Glatfelter's customer relationships strategy encompasses direct engagement, comprehensive support, and a commitment to continuous improvement, which are crucial for sustaining competitive advantage in the engineered materials market. The company's focus on long-term contracts also provides stability in revenue and customer loyalty.

Glatfelter Corporation (GLT) - Business Model: Channels

Direct sales to manufacturers

Glatfelter Corporation primarily engages in direct sales to manufacturers across various industries, including hygiene, food, and beverage. For the nine months ended September 30, 2024, net sales totaled approximately $988.8 million, with significant contributions from direct sales channels, particularly in the Airlaid Materials and Composite Fibers segments, which accounted for 40.5% and 35.0% of total net sales respectively.

E-commerce platforms for smaller orders

Glatfelter has increasingly utilized e-commerce platforms to facilitate smaller order transactions. This strategy allows the company to cater to smaller manufacturers and retailers who prefer online purchasing. The introduction of these platforms has contributed to a more agile sales process, accommodating customer needs more effectively. As of September 30, 2024, the company noted a favorable currency translation impact on net sales, which reflects the growing importance of e-commerce in reaching diverse market segments.

Distribution partnerships for broader reach

Distribution partnerships play a crucial role in Glatfelter’s channel strategy. The company has established alliances with various distributors to enhance its market reach, particularly in international markets. These partnerships enable Glatfelter to penetrate new territories and leverage local market knowledge. For the nine months ended September 30, 2024, Composite Fibers sales in the Americas increased by 10.0% year-over-year, showcasing the effectiveness of these partnerships.

Attendance at industry trade shows

Glatfelter actively participates in industry trade shows to showcase its product offerings and engage directly with customers. These events are pivotal for networking and establishing brand presence. The company reported that attendance at trade shows has led to increased inquiries and potential sales, particularly in the Spunlace segment, which saw sales growth attributed to enhanced visibility and customer engagement at these events.

Channel Type	Contribution to Sales (2024)	Key Segments	Notable Developments
Direct Sales	$988.8 million	Airlaid Materials, Composite Fibers	40.5% (Airlaid), 35.0% (Composite)
E-commerce	Growing	All segments	Increased agility in order fulfillment
Distribution Partnerships	Significant	Composite Fibers	10% YoY increase in Americas sales
Trade Shows	Impactful	Spunlace	Increased inquiries and visibility

Glatfelter Corporation (GLT) - Business Model: Customer Segments

Manufacturers in hygiene products

Glatfelter serves manufacturers in the hygiene products sector through its Airlaid Materials segment, which accounted for approximately 40.5% of total net sales in the first nine months of 2024, down from 43.1% in the same period of 2023. The segment reported net sales of $400.4 million for the first nine months of 2024, a decrease of $58.5 million year-over-year, primarily due to lower selling prices and reduced shipments in hygiene categories.

Companies in food and beverage industries

The Composite Fibers segment, which includes products for food and beverage applications, generated $347.1 million in net sales during the first nine months of 2024, a decline of $21.0 million compared to the same period in 2023. Despite a 2.3% increase in shipments, lower average selling prices negatively impacted revenue.

Industrial and technical applications

Glatfelter's Spunlace segment, which caters to industrial and technical applications, achieved net sales of $242.8 million in the first nine months of 2024, up from $239.9 million in the prior year. This growth was attributed to higher sales of Sontara products, which have a higher average selling price compared to hygiene products.

Health care and personal care sectors

In the health care and personal care sectors, Glatfelter's products are utilized extensively. The combined performance of Airlaid Materials and Spunlace indicates a strong presence in these markets, with significant demand for specialized nonwoven fabrics. The Airlaid Materials segment, specifically, has approximately 76% of its net sales under contracts with pass-through provisions, ensuring stability in pricing and demand.

Segment	Net Sales (9M 2024)	Net Sales (9M 2023)	Change	Percentage of Total Net Sales
Airlaid Materials	$400.4 million	$458.9 million	-$58.5 million	40.5%
Composite Fibers	$347.1 million	$368.0 million	-$21.0 million	35.0%
Spunlace	$242.8 million	$239.9 million	+$2.9 million	24.5%
Total	$988.8 million	$1,065.1 million	-$76.3 million	100%

Glatfelter's diverse customer segments allow it to mitigate risks associated with market fluctuations while catering to essential industries such as hygiene, food and beverage, industrial applications, and health care.

Glatfelter Corporation (GLT) - Business Model: Cost Structure

Raw Material Procurement Costs

For the first nine months of 2024, Glatfelter's primary raw material input costs decreased by $36.6 million, or 15%, compared to the same period in 2023. In the third quarter of 2024, primary raw material input costs increased slightly by $1.9 million, or 1%, while energy costs decreased by $0.9 million, or 6%, compared to the third quarter of 2023.

Labor and Manufacturing Overheads

In the third quarter of 2024, Glatfelter reported total operating expenses of $32.5 million for selling, general, and administrative expenses, up from $24.7 million in the same period in 2023. For the nine months ended September 30, 2024, the amount of operating expense not allocated to a reporting segment totaled $41.0 million compared to $46.5 million in the same period a year ago. The impact of wage inflation was noted, particularly in the Airlaid Materials segment, where operations were unfavorable by $5.2 million.

Research and Development Expenditures

Research and development expenditures were not explicitly detailed in the financial statements; however, the company has been investing in strategic initiatives and turnaround strategies, which include costs associated with innovation and product development. For 2024, strategic initiatives costs, which encompass various operational improvements, amounted to approximately $23 million.

Marketing and Sales Expenses

The total selling, general, and administrative expenses for the first nine months of 2024 were reported at $97.99 million, compared to $84.09 million in the same period in 2023. Marketing and sales expenses are included in this total, reflecting the company's efforts to maintain market presence amid fluctuating sales volumes. Net sales for the first nine months of 2024 were $988.8 million, down from $1.065 billion in 2023.

Cost Category	Q3 2024 (in thousands)	Q3 2023 (in thousands)	9M 2024 (in thousands)	9M 2023 (in thousands)
Net Sales	332,101	329,921	988,800	1,065,134
Costs of Products Sold	296,620	285,434	882,022	966,300
Gross Profit	35,481	44,487	106,778	98,834
SG&A Expenses	32,511	24,714	97,988	84,098
Operating Income (Loss)	2,971	2,653	8,720	(1,719)

Glatfelter Corporation (GLT) - Business Model: Revenue Streams

Sales from Engineered Materials Segments

Glatfelter Corporation's revenue is primarily derived from its engineered materials segments, which include Airlaid Materials, Composite Fibers, and Spunlace. For the nine months ended September 30, 2024, the total net sales were $988.8 million, compared to $1.065 billion in the same period of 2023, reflecting a decrease of approximately 7.2% year-over-year.

Segment	Net Sales (2024)	Net Sales (2023)	Change (%)
Airlaid Materials	$400.4 million	$459.0 million	-12.8%
Composite Fibers	$347.1 million	$368.0 million	-5.6%
Spunlace	$242.8 million	$239.9 million	+1.1%

Long-term Contracts with Key Customers

Glatfelter has established long-term contracts with key customers, contributing significantly to its revenue stability. As of September 30, 2024, approximately 75% of net sales in the Airlaid Materials segment were backed by contracts with pass-through provisions. This arrangement allows Glatfelter to adjust selling prices based on raw material costs, mitigating the impact of price fluctuations.

Licensing of Intellectual Property

Glatfelter’s business model also includes the licensing of its intellectual property, particularly in the engineered materials space. While specific revenue figures from licensing are not disclosed in the latest reports, this stream is crucial for leveraging the company's innovations and proprietary technologies in the market.

Services Related to Product Customization and Support

In addition to product sales, Glatfelter offers services related to product customization and support. This includes technical support and specialized services tailored to meet the unique needs of customers in various industries. These services not only enhance customer satisfaction but also represent a value-added revenue stream for the company. The operational flexibility provided by these services is critical, particularly as the company seeks to differentiate itself in competitive markets.

Article updated on 8 Nov 2024

Resources:

1. Glatfelter Corporation (GLT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Glatfelter Corporation (GLT)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Glatfelter Corporation (GLT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.