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<SEC-DOCUMENT>0000893220-01-500224.txt : 20010516
<SEC-HEADER>0000893220-01-500224.hdr.sgml : 20010516
ACCESSION NUMBER:		0000893220-01-500224
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20010331
FILED AS OF DATE:		20010515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GLATFELTER P H CO
		CENTRAL INDEX KEY:			0000041719
		STANDARD INDUSTRIAL CLASSIFICATION:	PAPER MILLS [2621]
		IRS NUMBER:				230628360
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		
		SEC FILE NUMBER:	001-03560
		FILM NUMBER:		1638808

	BUSINESS ADDRESS:	
		STREET 1:		228 S MAIN ST
		CITY:			SPRING GROVE
		STATE:			PA
		ZIP:			17362
		BUSINESS PHONE:		7172254711

	MAIL ADDRESS:	
		STREET 2:		228 S MAIN ST
		CITY:			SPRING GROVE
		STATE:			PA
		ZIP:			17362
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>w49274e10-q.txt
<DESCRIPTION>QUARTERLY REPORT FOR THE PERIOD ENDED 3/31/2001
<TEXT>

<PAGE>   1
                                   UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q


(Mark One)

(X)             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001
                               --------------

()              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                        to
                               -----------------------  ------------------------

                           Commission File No. 1-3560

                            P. H. GLATFELTER COMPANY
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Pennsylvania                                   23-0628360
- --------------------------------------------------------------------------------
    (State or other jurisdiction of                       (IRS Employer
     incorporation or organization)                     Identification No.)


   96 South George Street, Suite 500, York, Pennsylvania           17401
- --------------------------------------------------------------------------------
        (Address of principal executive offices)                 (Zip Code)

                                 (717) 225-4711
                                 --------------
              (Registrant's telephone number, including area code)


     Indicate by check mark whether the registrant (1) has filed all reports
     required to be filed by Section 13 or 15(d) of the Securities Exchange Act
     of 1934 during the preceding 12 months (or for such shorter period that the
     registrant was required to file such reports), and (2) has been subject to
     such filing requirements for the past 90 days. Yes  X    No    .
                                                        ---      ---

      Shares of Common Stock outstanding at April 30, 2001 were 42,462,113.


                                       1
<PAGE>   2
                            P. H. GLATFELTER COMPANY

                                      INDEX


Part I - Financial Information

Financial Statements:


      Condensed Consolidated Statements of Income -

                Three Months Ended March 31, 2001 and 2000 (Unaudited)......   3


      Condensed Consolidated Balance Sheets - March 31, 2001

                (Unaudited) and December 31, 2000...........................   4


      Condensed Consolidated Statements of Cash Flows - Three

                Months Ended March 31, 2001 and 2000 (Unaudited)............   5


      Notes to Condensed Consolidated Financial Statements

                (Unaudited).................................................   6


Independent Accountants' Report.............................................  12


Management's Discussion and Analysis of Financial Condition

      and Results of Operations.............................................  13


Quantitative and Qualitative Disclosures About Market Risk..................  18


Part II - Other Information.................................................  18


Signature...................................................................  20


Index of Exhibits...........................................................  21


                                       2
<PAGE>   3
                         PART I - FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                    P. H. GLATFELTER COMPANY AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands, except per share amounts)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended
                                                 3/31/01           3/31/00
                                               -----------       -----------
<S>                                            <C>               <C>
Revenues:
      Net sales                                $   185,646       $   187,658

      Other income - net:
         Energy sales - net                          2,312             2,466
         Interest on investments
             and other - net                         1,378             1,288
         Gain from property
             dispositions, etc. - net                  500               308
                                               -----------       -----------
                                                     4,190             4,062

                 Total revenues                    189,836           191,720

Cost and expenses:
      Cost of products sold                        145,921           154,151
      Selling, general and
         administrative expenses                    15,500            13,103
      Interest on debt                               4,442             4,380
      Unusual item                                      --             3,336
                                               -----------       -----------
                                                   165,863           174,970

Income before income taxes                          23,973            16,750

Income tax provision:
      Current                                        6,274             4,490
      Deferred                                       2,335             1,616
                                               -----------       -----------
         Total                                       8,609             6,106

Net income                                     $    15,364       $    10,644
                                               ===========       ===========

Basic and diluted earnings per share           $      0.36       $      0.25
                                               ===========       ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4
                    P. H. GLATFELTER COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                   3/31/01
                                                                                 (unaudited)            12/31/00
                                                                                -------------         -------------
<S>                                                                             <C>                   <C>
                                     ASSETS

Current assets:
       Cash and cash equivalents                                                $      89,142         $     110,552
       Accounts receivable - net                                                       85,027                72,231
       Inventories
          Raw materials                                                                25,662                27,789
          In-process and finished                                                      44,364                43,819
          Supplies                                                                     29,890                29,686
                                                                                -------------         -------------
              Total inventories                                                        99,916               101,294

       Prepaid expenses and other current assets                                        3,046                 2,547
                                                                                -------------         -------------
                  Total current assets                                                277,131               286,624

Plant, equipment and timberlands - net                                                544,475               552,768

Other assets                                                                          180,753               173,799
                                                                                -------------         -------------
                      Total assets                                              $   1,002,359         $   1,013,191
                                                                                =============         =============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
       Current portion of long-term debt                                        $       1,345         $       1,419
       Short-term debt                                                                  2,499                 5,158
       Accounts payable                                                                37,108                45,869
       Dividends payable                                                                7,428                 7,430
       Income taxes payable                                                            12,032                 7,328
       Accrued compensation and other expenses
          and deferred income taxes                                                    43,804                51,980
                                                                                -------------         -------------
                  Total current liabilities                                           104,216               119,184

Long-term debt                                                                        291,787               300,245

Deferred income taxes                                                                 157,788               155,360

Other long-term liabilities                                                            66,113                65,699
                                                                                -------------         -------------
                  Total liabilities                                                   619,904               640,488
                                                                                -------------         -------------

Commitments and contingencies

Shareholders' equity:
       Common stock                                                                       544                   544
       Capital in excess of par value                                                  41,525                41,669
       Retained earnings                                                              519,289               511,019
       Accumulated other comprehensive income                                          (2,048)               (2,843)
                                                                                -------------         -------------
          Total                                                                       559,310               550,389

       Less cost of common stock in treasury                                         (176,855)             (177,686)
                                                                                -------------         -------------

                  Total shareholders' equity                                          382,455               372,703
                                                                                -------------         -------------

                      Total liabilities and
                          shareholders' equity                                  $   1,002,359         $   1,013,191
                                                                                =============         =============
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5
                    P. H. GLATFELTER COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                Three Months Ended
                                                                            3/31/01             3/31/00
                                                                          -----------         -----------
<S>                                                                       <C>                 <C>
Cash flows from operating activities:
      Net income                                                          $    15,364         $    10,644
      Items included in net income not using cash:
         Depreciation, depletion and amortization                              11,840              11,820
         Loss on disposition of fixed assets                                       --                  98
         Expense related to 401(k) plans                                          747                 481
      Change in assets and liabilities:
         Accounts receivable                                                  (14,409)            (14,406)
         Inventories                                                              151               4,932
         Other assets and prepaid expenses                                     (7,695)             (5,471)
         Accounts payable, accrued compensation and
             other expenses, deferred income taxes
             and other long-term liabilities                                  (14,327)             (7,217)
         Income taxes payable                                                   4,197               4,431
         Deferred income taxes - noncurrent                                     2,488               2,791
                                                                          -----------         -----------
Net cash provided by (used in) operating activities                            (1,644)              8,103
                                                                          -----------         -----------

Cash flows from investing activities:
      Proceeds from disposal of fixed assets                                       16                  40
      Additions to plant, equipment and timberlands                            (9,468)             (3,429)
                                                                          -----------         -----------
Net cash used in investing activities                                          (9,452)             (3,389)
                                                                          -----------         -----------

Cash flows from financing activities:
      Net payment of debt                                                      (2,797)               (638)
      Dividends paid                                                           (7,418)             (7,393)
                                                                          -----------         -----------
Net cash used in financing activities                                         (10,215)             (8,031)
                                                                          -----------         -----------

Effect of exchange rate changes on cash                                           (99)                  1
                                                                          -----------         -----------

Net decrease in cash and cash equivalents                                     (21,410)             (3,316)

Cash and cash equivalents:
      At beginning of year                                                    110,552              76,035
                                                                          -----------         -----------
      At end of period                                                    $    89,142         $    72,719
                                                                          ===========         ===========

Supplemental disclosure of cash flow information:
Cash paid for:
      Interest                                                            $     6,941         $     7,168
      Income taxes                                                                383                 265
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>   6
                    P. H. GLATFELTER COMPANY AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.       EARNINGS PER SHARE ("EPS")

         Basic EPS excludes the dilutive impact of common stock equivalents and
         is computed by dividing net income by the weighted-average number of
         shares of common stock outstanding for the period. Diluted EPS includes
         the effect of potential dilution from the issuance of common stock,
         pursuant to common stock equivalents, using the treasury stock method.
         A reconciliation of the Registrant's basic and diluted EPS follows with
         the dollar and share amounts in thousands:

<TABLE>
<CAPTION>
                                                                      Three Months Ended
                                                                           March 31
                                                                ------------------------------
                                                                   2001                2000
                                                                ----------          ----------
                                                                  Shares              Shares
                                                                ----------          ----------
<S>                                                             <C>                 <C>
                Basic EPS factors                                   42,418              42,267
                Effect of potentially dilutive
                      employee incentive plans:
                          Restricted stock awards                      130                  62
                          Performance stock awards                      29                  39
                                                                ----------          ----------

                Diluted EPS factors                                 42,577              42,368
                                                                ==========          ==========

                Net income                                      $   15,364          $   10,644

                Basic and diluted EPS                           $     0.36          $     0.25
</TABLE>

         Basic and diluted EPS of $.25 for the three months ended March 31,
         2000, as presented on the Condensed Consolidated Statement of Income,
         reflects the negative impact of an after-tax restructuring charge
         (unusual item) of $.05 per share (see Note 2).


2.       UNUSUAL ITEM

         The Registrant announced in September 1999 that, effective January 1,
         2000, prices would be increased for certain of its tobacco paper
         products. This initiative was required for the Registrant to remain a
         viable, high-quality supplier to its tobacco paper customers. As the
         Registrant expected, certain of these customers sought other suppliers
         after this announcement. As a result, the Registrant announced in
         December 1999 that it would begin reducing its tobacco paper
         manufacturing capacity at its Ecusta mill during 2000.

         During the first quarter of 2000, the Registrant finalized its plan of
         restructuring and shortly thereafter began to reduce the workforce at
         Ecusta. The workforce reduction has been completed and has resulted in
         the reduction of approximately 220 salaried and hourly jobs associated
         with the Registrant's tobacco paper production capacity. The Registrant
         accrued and charged to expense $3,336,000 ($2,120,000 after tax) in the
         first quarter of 2000 primarily as a result of the voluntary portion,
         specifically 42 salaried employees, of this restructuring. The amount
         of actual termination benefits paid and charged against the liability
         as of March 31, 2001 was $795,000.


                                       6
<PAGE>   7
3.       RECENT ACCOUNTING PRONOUNCEMENTS AND RECLASSIFICATIONS

         On January 1, 2001, the Registrant adopted Statement of Financial
         Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
         Instruments and Hedging Activities." SFAS No. 133, as amended and
         interpreted, establishes accounting and reporting standards for
         derivative instruments, including certain derivative instruments
         embedded in other contracts, and for hedging activities. All
         derivatives, whether designated in hedging relationships or not, are
         required to be recorded on the balance sheet at fair value. If the
         derivative is designated in a fair-value hedge, changes in the fair
         value of the derivative and the hedged item are recognized in earnings.
         If the derivative is designated in a cash-flow hedge, changes in the
         fair value of the derivative are recorded in other comprehensive income
         ("OCI") and are recognized in the income statement when the hedged item
         affects earnings. SFAS No. 133 defines new requirements for designation
         and documentation of hedging relationships as well as ongoing
         effectiveness assessments and measurements to use hedge accounting. The
         ineffective portion of a hedging derivative's change in fair value is
         immediately recognized in earnings. For a derivative that does not
         qualify as a hedge, changes in fair value are recognized in earnings.

         The adoption of SFAS No. 133 on January 1, 2001 resulted in an $845,000
         increase in OCI as a cumulative transition adjustment for derivatives
         designated in cash flow-type hedges prior to adopting SFAS No. 133. Due
         to its limited use of derivative instruments, the effect on earnings of
         adopting SFAS No. 133 was immaterial.

         During the fourth quarter of 2000, the Registrant adopted the
         provisions of the Emerging Issues Task Force ("EITF") Issue No. 00-10,
         "Accounting for Shipping and Handling Fees and Costs." In accordance
         with the provisions of EITF 00-10, certain shipping and handling costs
         that the Registrant had previously recorded as a deduction in
         determining net sales have been reclassified to cost of products sold.
         As a result of adopting EITF 00-10, the Registrant has reclassified
         such shipping and handling costs on its Condensed Consolidated
         Statement of Income for the three months ended March 31, 2000 to
         reflect comparable reporting.


4.       INTEREST RATE SWAP AGREEMENTS

         In January 1999, the Registrant entered into two interest rate swap
         agreements, each having a total notional principal amount of DM
         50,000,000 (approximately $22,500,000 as of March 31, 2001). Under
         these agreements, which were effective April 6, 1999 and July 6, 1999
         and which expire December 22, 2002, the Registrant receives a floating
         rate of the three-month DM London Interbank Offered Rate ("LIBOR") plus
         twenty basis points and pays a fixed rate of 3.41% and 3.43%,
         respectively, for the term of the agreements.

         The Registrant's interest rate swap agreements convert a portion of the
         Registrant's borrowings from a floating-rate to a fixed-rate basis.
         Although the Registrant can terminate its swap agreements at any time,
         the Registrant intends to hold its swap agreements until maturity.


5.       COMPREHENSIVE INCOME

         Comprehensive income was $16,159,000 and $10,182,000 for the first
         three months of 2001 and 2000, respectively. Comprehensive income
         includes the effects of changes in (1) certain currency exchange rates
         relative to the


                                       7
<PAGE>   8
         U.S. dollar and (2) the fair value of derivative instruments held by
         the Registrant (see Note 3).


6.       COMMITMENTS AND CONTINGENCIES

         The Registrant is subject to loss contingencies resulting from
         regulation by various federal, state, local and foreign governmental
         authorities with respect to the environmental impact of air and water
         emissions and noise from its mills, as well as the disposal of solid
         waste generated by its operations. To comply with environmental laws
         and regulations, the Registrant has incurred substantial capital and
         operating expenditures in past years. The Registrant anticipates that
         environmental regulation of its operations will continue to become more
         burdensome and that capital and operating expenditures will continue,
         and perhaps increase, in the future. In addition, the Registrant may
         incur obligations to remove or mitigate any adverse effects on the
         environment resulting from its operations, including the restoration of
         natural resources, and liability for personal injury and damage to
         property, including natural resources. Because environmental
         regulations are not consistent worldwide, the Registrant's ability to
         compete in the world marketplace may be adversely affected by capital
         and operating expenditures required for environmental compliance.

         Subject to permit approval, the Registrant has undertaken an initiative
         under the Voluntary Advanced Technical Incentive Program of the United
         States Environmental Protection Agency ("EPA") to comply with the new
         "Cluster Rule" regulations. This initiative, the Registrant's "New
         Century Project," will require capital expenditures currently estimated
         at approximately $30,000,000 to be incurred before April 2004.

         On September 7, 2000, the Pennsylvania Department of Environmental
         Protection ("DEP") issued to the Registrant a renewed wastewater
         discharge permit for the Spring Grove mill with an effective date of
         October 1, 2000. The renewed permit calls for reductions in the mill's
         discharge of color that the Registrant believes cannot be achieved at
         this time without a curtailment of operations. On September 7, 2000,
         DEP also issued to the Registrant an administrative order calling for
         achievement of the limitations in the permit on a schedule extending
         until 2007. Both the permit and the order contemplate adoption of an
         alternative limitation on color which would be less stringent. The
         Registrant expects to be able to meet the alternative limitation
         without a curtailment of operations under the schedule set forth in the
         order. Under the schedule set forth in the permit, however, the
         Registrant may not be able to meet the alternative limitation without a
         curtailment of operations. The Registrant has appealed the permit and
         the order to the Pennsylvania Environmental Hearing Board. After an
         evidentiary hearing, the Board granted a stay of the permit limitation
         during the pendency of the appeal. The Board did not grant a stay of
         the alternative limitation because it is not yet in effect, and will
         not come into effect until a change in the Pennsylvania Water Quality
         Standard for color is approved; in this case, "approval" includes an
         approval by EPA. The Pennsylvania Public Interest Research Group and
         several other parties (collectively "Penn PIRG") have appealed the
         alternative limitation and have also intervened in the Registrant's
         appeal of the permit. The Registrant is engaged in settlement
         discussions with Penn PIRG and DEP, but also continues to litigate all
         appeals vigorously.

         In June 1999, Penn PIRG brought a citizen suit under the Federal Clean
         Water Act and Pennsylvania Clean Streams Law seeking a reduction in the
         Spring Grove mill's discharge of color, civil penalties and costs of
         litigation. On February 7, 2001, the United States District Court
         granted partial summary judgment on liability to plaintiffs as to
         certain claims and granted summary judgment to the Registrant on
         others. The court has not scheduled


                                       8
<PAGE>   9
         further proceedings with respect to any remedy until after it resolves
         the Registrant's pending motion for reconsideration.

         In 1999, EPA and DEP issued to the Registrant separate Notices of
         Violation ("NOVs") alleging violations of the federal and state air
         pollution control laws, primarily for purportedly failing to obtain
         appropriate preconstruction air quality permits in conjunction with
         certain modifications to the Registrant's Spring Grove mill. EPA
         announced that the Registrant was one of seven pulp and paper mill
         operators to have received contemporaneously an NOV alleging this kind
         of violation. EPA and DEP alleged that the Registrant's modifications
         produced (1) significant net emissions increases in certain air
         pollutants which should have been covered by appropriate permits
         imposing new emissions limitations, and (2) certain other violations.

         For all but one of the modifications cited by EPA, the Registrant
         applied for and obtained from DEP the preconstruction permits which the
         Registrant concluded were required by applicable law. EPA reviewed
         those applications before the permits were issued. DEP's NOV pertained
         only to the modification for which the Registrant did not receive a
         preconstruction permit. The Registrant conducted an evaluation at the
         time of this modification, and determined that the preconstruction
         permit cited by EPA and DEP was not required. The Registrant has been
         informed that EPA and DEP will seek substantial emissions reductions,
         as well as civil penalties, to which the Registrant believes it has
         meritorious defenses. Nevertheless, the Registrant is unable to predict
         the ultimate outcome of these matters or the costs involved.

         The Registrant faces a set of related threatened claims arising out of
         the presence of polychlorinated biphenyls ("PCBs") in sediments in the
         Fox River below Lake Winnebago and in Green Bay, downstream of the
         Registrant's Neenah mill. As described below, various sovereigns have
         formally notified seven parties ("PRPs"), of which the Registrant is
         one, that they are potentially responsible for investigation, cleanup
         and natural resource damages arising from this contamination under the
         federal Comprehensive Environmental Response, Compensation and
         Liability Act and other laws.

         The Wisconsin Department of Natural Resources ("DNR") notified the
         Registrant and other PRPs informally in 1990 that it wished to pursue
         cleanup of certain sediments in the Fox River under state law. DNR
         subsequently asserted claims under federal law as well for cleanup and
         for natural resource damages. Since 1998, DNR has been performing a
         remedial investigation and feasibility study ("RI/FS") of the Fox River
         and Green Bay under contract to the EPA. In February 1999, DNR issued a
         draft RI/FS report estimating the costs of potential remedies for the
         Fox River at between $0 and $721,000,000, but did not select a
         preferred remedy. The Registrant does not believe that the no action
         remedy will be selected. The largest components of the costs of certain
         of the remedial alternatives are attributable to large-scale sediment
         removal by dredging. There is no assurance that the cost estimates in
         the draft RI/FS will not differ significantly from actual costs. Under
         ordinary procedures, the final RI/FS report will be issued along with a
         proposed remedial action plan ("PRAP"). EPA will consider comments on
         the PRAP and then will select a remedy for the site. EPA and DNR had
         stated publicly that the RI/FS would be issued in 2000. The expected
         date of issuance was subsequently delayed to the spring of 2001 and has
         now been further delayed.

         Based on current information and advice from its environmental
         consultants, the Registrant continues to believe that an aggressive
         effort, as included in certain remedial alternatives in the draft
         RI/FS, to remove PCB-contaminated sediment, much of which is buried
         under cleaner material or is otherwise unlikely to move and which is
         abating naturally, would be environmentally detrimental and, therefore,
         inappropriate.


                                       9
<PAGE>   10
         In January 1997, DNR, the Wisconsin Department of Justice ("WDOJ"), and
         the seven PRPs entered into an agreement to conduct a cooperative
         natural resource damages assessment ("NRDA"). While that NRDA has not
         been completed, based upon work conducted to date, DNR and WDOJ have
         proposed to enter into a settlement with another PRP of its share of
         the natural resource damages liability. The proposed settlement does
         not state explicitly the total amount of natural resource damages, but
         it calls for such other PRP to spend $7,000,000 on resource restoration
         projects.

         The United States Fish and Wildlife Service ("FWS"), the National
         Oceanic and Atmospheric Administration ("NOAA"), four Indian tribes and
         the Michigan Attorney General claim to be trustees for natural
         resources injured by the PCBs in the Fox River and Green Bay. In June
         1994, FWS notified the Registrant and other PRPs that it considered
         them potentially responsible for natural resource damages. The federal,
         tribal and Michigan agencies claiming to be trustees have proceeded
         with the preparation of an NRDA separate from the work performed by
         DNR. While the final report of assessment will be delayed until after
         selection of a remedy for the site, on October 25, 2000, the federal
         trustees released a restoration and compensation determination plan
         ("RCDP") that estimates natural resource damages for the site at
         between $176,000,000 and $333,000,000.

         The Registrant is seeking settlement with the Wisconsin agencies and
         with EPA for all of its liabilities for response actions and natural
         resource damages associated with the site. The Registrant believes that
         the federal, tribal and Michigan natural resource damages claims are
         without merit, and that the federal NRDA is technically and
         procedurally flawed. The Registrant further maintains that its share of
         any liability as among the seven identified PRPs is much less than
         one-seventh and that additional responsible parties exist other than
         the seven identified by the governments.

         The Registrant currently is unable to predict the ultimate costs to the
         Registrant related to this matter, because the Registrant cannot
         predict which remedy will be selected for the site or the ultimate
         amount of natural resource damages nor can the Registrant predict its
         share of these costs or damages.

         The Registrant continues to believe it is likely that this matter will
         result in litigation; however, the Registrant believes it will be able
         to persuade a court that removal of a substantial amount of
         PCB-contaminated sediments is not an appropriate remedy. There can be
         no assurance, however, that the Registrant will be successful in
         arguing that removal of PCB-contaminated sediments is inappropriate or
         that it would prevail in any resulting litigation.

         The amount and timing of future expenditures for environmental
         compliance, cleanup, remediation and personal injury, natural resource
         damage and property damage liability, including but not limited to
         those related to the lower Fox River and the Bay of Green Bay, cannot
         be ascertained with any certainty due to, among other things, the
         unknown extent and nature of any contamination, the extent and timing
         of any technological advances for pollution control, the remedial
         actions which may be required and the number and financial resources of
         any other responsible parties. The Registrant continues to evaluate its
         exposure and the level of its reserves, including, but not limited to,
         its share of the costs and damages (if any) associated with the lower
         Fox River and the Bay of Green Bay. The Registrant believes that it is
         insured against certain losses related to the lower Fox River,
         depending on the nature and amount thereof. Coverage, which is
         currently being investigated under reservation of rights by various
         insurance companies, is dependent upon the identity of the plaintiff,
         the procedural posture of the claims asserted and how such claims are
         characterized. The


                                       10
<PAGE>   11
         Registrant does not know when the insurers' investigation as to
         coverage will be completed.

         The Registrant's current assessment, after consultation with legal
         counsel, is that ultimately it should be able to resolve these
         environmental matters without a long-term, material adverse impact on
         the Registrant. In the meantime, however, these matters could, at any
         particular time or for any particular period, have a material adverse
         effect on the Registrant's consolidated financial condition, liquidity
         or results of operations or result in a default under the Registrant's
         loan covenants. Moreover, there can be no assurance that the
         Registrant's reserves will be adequate to provide for future
         obligations related to these matters, that the Registrant's share of
         costs and/or damages for these matters will not exceed its available
         resources or that such obligations will not have a long-term, material
         adverse effect on the Registrant's consolidated financial condition,
         liquidity or results of operations.


7.       SUBSEQUENT EVENT

         On May 1, 2001, the Registrant granted to each non-employee member of
         its Board of Directors options to purchase 1,500 shares of common stock
         for a total of 12,000 options granted. Such options become exercisable
         on May 1, 2002 at an exercise price of $14.44, which represents the
         average quoted market price of the Registrant's common stock on the
         date of grant, and expire on April 30, 2011.


8.       DISCLOSURE STATEMENT

         In the opinion of the Registrant, the accompanying unaudited condensed
         consolidated financial statements contain all adjustments (which
         comprise only normal recurring accruals) necessary for a fair
         presentation of the financial information contained therein. These
         unaudited condensed consolidated financial statements should be read in
         conjunction with the more complete disclosures contained in the
         Registrant's Annual Report on Form 10-K for the year ended December 31,
         2000.


                                       11
<PAGE>   12
                         INDEPENDENT ACCOUNTANTS' REPORT



P. H. Glatfelter Company:

We have reviewed the accompanying condensed consolidated balance sheet of P. H.
Glatfelter Company and subsidiaries as of March 31, 2001 and the related
condensed consolidated statements of income and cash flows for the three months
ended March 31, 2001 and 2000. These financial statements are the responsibility
of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of P.
H. Glatfelter Company and subsidiaries as of December 31, 2000, and the related
consolidated statements of income and comprehensive income, shareholders' equity
and cash flows for the year then ended (not presented herein); and in our report
dated February 2, 2001, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying condensed consolidated balance sheet as of December 31, 2000 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.

As discussed in Note 3 to the condensed consolidated financial statements, the
Company changed its method of accounting for derivative financial instruments as
of January 1, 2001.



Deloitte & Touche LLP

Philadelphia, Pennsylvania
April 17, 2001, except for Note 7 as to
which the date is May 1, 2001


                                       12
<PAGE>   13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

This discussion and analysis contains forward-looking statements. See
"Cautionary Statement" set forth in Item 5.


RESULTS OF OPERATIONS

A summary of the period-to-period changes in the principal items included in the
Condensed Consolidated Statements of Income is shown below.

<TABLE>
<CAPTION>
                                                      Three Months Ended
                                                    March 31, 2001 and 2000
                                                -------------------------------
                                                      Increase (Decrease)
                                                    (dollars in thousands)
<S>                                             <C>                      <C>
Net sales                                       $(2,012)                 (1.1)%
Other income - net                                   128                   3.2%
Cost of products sold                            (8,230)                 (5.3)%
Selling, general and
      administrative expenses                      2,397                  18.3%
Interest on debt                                      62                   1.4%
Income tax provision                               2,503                  41.0%
Net income                                         4,720                  44.3%
</TABLE>


Net Sales

Net sales decreased $2,012,000, or 1.1%, for the first quarter of 2001 compared
to the first quarter of 2000 due to a slight decline in sales volume. Average
net selling prices remained flat as slightly improved pricing offset a weaker
mix of products sold. Demand for most of the Registrant's product lines during
the first quarter of 2001 was steady.

The Registrant classifies its sales into two product groups: specialized
printing papers and engineered papers (which includes tobacco papers). Net sales
of specialized printing papers increased 1.5% in the first quarter of 2001
compared to the first quarter of 2000 due to a 2.7% increase in average net
selling prices, resulting from favorable pricing, partially offset by a 1.1%
decrease in sales volume.

The decreased sales volume of specialized printing papers was largely due to
reduced demand in the first quarter of 2001 versus the like period of 2000. The
Registrant believes that overall market conditions for its products are
relatively stable with only minor price decreases expected in the near term.

Net sales of engineered papers for the three months ended March 31, 2001 were
3.9% lower than for the corresponding 2000 period. The decrease was primarily
the result of continued demand erosion for the Registrant's tobacco papers.
Although the Registrant recognized slightly increased prices for tobacco papers,
a weaker product mix more than offset the increase in prices thereby
contributing to the lower net sales. As explained in "UNUSUAL ITEM" below, the
Registrant has maintained increased pricing for certain of its tobacco papers,
which has resulted in reduced sales volume. Although demand remains stronger
than expected and price increases to date have held, the Registrant expects
that, in the long run, net sales of tobacco papers will continue to trend
downward, with volume decreases more than offsetting any improvements in
pricing. Future price changes will be impacted by changes in market pulp prices.

Net sales of engineered papers, excluding tobacco papers, increased 4.8% in the
first quarter of 2001 versus the like period of 2000 primarily as a result of a
5.5% increase in net sales volume. The increase in net sales volume was slightly
offset by a 0.6% decrease in net average selling prices. The Registrant believes


                                       13
<PAGE>   14
it is difficult to characterize such engineered papers in terms of demand trends
and pricing due to the fragmentation and small size of markets within this
group.

Other Income - Net

Other income - net increased $128,000, or 3.2%, for the first quarter of 2001
compared to the corresponding period of 2000. Energy sales - net decreased
$154,000 for the three months ended March 31, 2001 versus the comparable period
in 2000. Interest on investments and other - net increased $90,000 in the first
quarter of 2001 versus the same period in 2000 as a result of higher average
cash balances. Gain from property dispositions, etc. - net increased $192,000
for the three months ended March 31, 2001 versus the like period in 2000.

Cost of Products Sold and Gross Margin

Cost of products sold decreased $8,230,000, or 5.3%, for the first quarter of
2001 versus the first quarter of 2000 as a result of the Registrant's cash
savings project (as described below), strong productivity from its manufacturing
facilities and increased pension income, which were partially offset by
increased costs of energy and market pulp. Market pulp prices have dropped
steadily from January 2001 through April 2001. The Registrant expects that
market pulp prices will continue to decrease slightly through the second quarter
of 2001 and then remain constant through the third quarter of 2001.

The Registrant continued to realize the benefits of its cash savings project,
known as "DRIVE," in the first quarter of 2001. Such savings began in the second
quarter of 2000 and have been offset slightly, in the short term, by the
Registrant's costs of implementing the project (see "Selling, General and
Administrative Expenses" below). The Registrant remains on pace to achieve its
DRIVE target which has been increased from $50,000,000 to $53,000,000 in
sustainable, annual cash savings. As of March 31, 2001, the Company had
implemented portions of the DRIVE project that will realize approximately
$30,000,000 per year in sustainable cash savings.

Income resulting from the overfunded status of the Registrant's defined benefit
pension plans and other postretirement benefit plans decreased cost of products
sold by $7,036,000 and $5,281,000 for the first quarter of 2001 and the same
quarter of 2000, respectively. This improved level of income was primarily the
result of long-term investment performance of the plans' assets.

Marginal cost of products sold per ton decreased 4.3% for the first quarter of
2001 versus the same period of 2000, resulting in an increase in gross margin
per ton of 19.9%.

As a result of the aforementioned items, gross margin as a percentage of net
sales increased to 21.4% for the first quarter of 2001 from 17.9% for the like
quarter of 2000.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the first quarter of 2001 were
$2,397,000, or 18.3%, higher than for the first quarter of 2000. This increase
was primarily a result of increased legal and professional expenses, which
included outside consulting services associated with the Registrant's IMPACT
(see "IMPACT PROJECT" below) and DRIVE projects. Additionally, incentive
compensation costs increased in the first quarter of 2001 versus the same period
of 2000 attributable to higher earnings in the 2001 period. Pension income
reduced selling, general and administrative expenses by $1,612,000 and
$1,074,000 for the first quarter of 2001 and the same quarter of 2000,
respectively.


                                       14
<PAGE>   15
Interest on Debt - Net

Interest on debt - net increased $62,000, or 1.4%, for the three months ended
March 31, 2001 versus the comparable period of 2000.


Income Tax Provision

The income tax provision increased $2,503,000, or 41.0%, for the first quarter
of 2001 versus the first quarter of 2000. The increase was primarily due to
higher income before income taxes in 2001 versus 2000 and was offset slightly by
a lower effective income tax rate.


UNUSUAL ITEM

The Registrant's tobacco papers business has suffered from extremely low pricing
in recent years as a result of overcapacity in the tobacco papers industry and
declining domestic consumption of tobacco products. To combat such depressed
pricing, the Registrant announced in September 1999 that, effective January 1,
2000, prices would be increased for certain of its tobacco paper products. This
initiative was required for the Registrant to remain a viable, high-quality
supplier to its tobacco paper customers. As the Registrant expected, certain of
these customers sought other suppliers after this announcement. As a result, the
Registrant announced in December 1999 that it would begin reducing its tobacco
paper manufacturing capacity at its Ecusta mill during 2000.

During the first quarter of 2000, the Registrant finalized its plan of
restructuring and shortly thereafter began to reduce the workforce at Ecusta.
The workforce reduction has been completed and has resulted in the reduction of
approximately 220 salaried and hourly jobs associated with the Registrant's
tobacco paper production capacity. This reduction in jobs is lower than
originally estimated due to stronger customer demand than anticipated. The
Registrant accrued and charged to expense $3,336,000 ($2,120,000 after tax, or
$.05 per share) in the first quarter of 2000 primarily as a result of the
voluntary portion, specifically 42 salaried employees, of this restructuring.
The amount of actual termination benefits paid and charged against the liability
as of March 31, 2001 was $795,000.


IMPACT PROJECT

In July 2000, the Registrant initiated its IMPACT project, which is focused on
identifying and implementing changes to the Registrant's organization and its
business processes. The initial phase, the preliminary design work, has been
completed. The second phase of the IMPACT project, which includes the
installation of an enterprise resource planning system, is underway and is
expected to extend over the next few years. Total spending on the IMPACT project
is expected to be approximately $49,000,000, of which approximately $45,000,000
is capital related. During 2000, the Registrant spent approximately $5,200,000
on the IMPACT project.


FINANCIAL CONDITION

Liquidity

Cash and cash equivalents decreased $21,410,000 during the first three months of
2001, principally due to cash used in investing activities and financing
activities of $9,452,000 and $10,215,000, respectively. Cash used in investing
activities was substantially for additions to plant, equipment and timberlands,
and cash used in financing activities was for dividend payments and net payment
of debt. Cash used in operations further decreased cash and cash equivalents by
$1,644,000.


                                       15
<PAGE>   16
To finance the acquisition of S&H Papier-Holding GmbH, on December 22, 1997, the
Registrant entered into a $200,000,000 multi-currency revolving credit facility
("Revolving Credit Facility") with a syndicate of major lending institutions.
The Revolving Credit Facility enables the Registrant to borrow up to the
equivalent of $200,000,000 in certain currencies in the form of revolving credit
loans with a final maturity date of December 22, 2002, and with interest periods
determined, at the Registrant's option, on a daily or one- to six-month basis.
Interest on the revolving credit loans is at variable rates based, at the
Registrant's option, on the Eurocurrency Rate or the Base Rate (lender's prime
rate), plus applicable margins. Margins are based on the higher of the
Registrant's debt ratings as published by Standard & Poor's and Moody's. As of
March 31, 2001, the Registrant's outstanding borrowings were DM 307,800,000
(approximately $138,700,000) under the Revolving Credit Facility.

In January 1999, the Registrant entered into two interest rate swap agreements,
each having a total notional principal amount of DM 50,000,000 (approximately
$22,500,000 as of March 31, 2001). Under these agreements, which were effective
April 6, 1999 and July 6, 1999 and which expire December 22, 2002, the
Registrant receives a floating rate of the three-month DM LIBOR plus twenty
basis points and pays a fixed rate of 3.41% and 3.43%, respectively, for the
term of the agreements.

On July 22, 1997, the Registrant issued $150,000,000 principal amount of 6-7/8%
Notes due July 15, 2007. Interest on the Notes is payable semiannually on
January 15 and July 15. The Notes are redeemable, in whole or in part, at the
option of the Registrant at any time at a calculated redemption price plus
accrued and unpaid interest to the date of redemption, and constitute unsecured
and unsubordinated indebtedness of the Registrant. The net proceeds from the
sale of the Notes were used primarily to repay certain short-term unsecured debt
and related interest.

The Registrant expects to meet all its near- and long-term cash needs from a
combination of internally generated funds, cash, cash equivalents and its
existing Revolving Credit Facility or other bank lines of credit and, if
prudent, other long-term debt.

Interest Rate Risk

The Registrant uses its Revolving Credit Facility and proceeds from the issuance
of its 6-7/8% Notes to finance a significant portion of its operations. The
Revolving Credit Facility provides for variable rates of interest and exposes
the Registrant to interest rate risk resulting from changes in the DM LIBOR. The
Registrant uses interest rate swap agreements to hedge, partially, interest rate
exposure associated with the Revolving Credit Facility. All of the Registrant's
derivative financial instrument transactions are entered into for non-trading
purposes.

To the extent that the Registrant's financial instruments expose the Registrant
to interest rate risk and market risk, they are presented in the table below.
The table presents principal cash flows and related interest rates by year of
maturity for the Registrant's Revolving Credit Facility and 6-7/8% Notes as of
March 31, 2001. For interest rate swap agreements, the table presents notional
amounts and the related reference interest rates by year of maturity. Fair
values included herein have been determined based upon (1) rates currently
available to the Registrant for debt with similar terms and remaining
maturities, and (2) estimates obtained from dealers to settle interest rate swap
agreements.


                                       16
<PAGE>   17
<TABLE>
<CAPTION>
                                                            Year of Maturity                                              Fair
                                                      (dollar amounts in thousands)                                     Value at
Debt:                                   2001      2002        2003       2004       2005     Thereafter      Total       3/31/01
                                        ----      ----        ----       ----       ----     ----------    ---------    ---------
<S>                                   <C>        <C>        <C>        <C>        <C>        <C>           <C>          <C>
      Fixed rate --                   $  1,345   $  1,007   $    872   $    728   $    437   $  150,000    $ 154,389    $ 157,333
         Average interest rate           6.86%      6.86%      6.87%      6.87%      6.87%        6.87%
      Variable rate --                $     --   $138,743   $     --   $     --   $     --   $       --    $ 138,743    $ 138,743
         Average interest rate           4.64%      4.64%         --         --         --           --

Interest rate swap agreements:
      Variable to fixed swaps --      $     --   $ 45,076   $     --   $     --   $     --   $       --    $  45,076    $     782
         Average pay rate                3.42%      3.42%         --         --         --           --
         Average receive rate            5.20%      5.20%         --         --         --           --
</TABLE>

As required by Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities," the Registrant
was required to record the interest rate swaps from the table above on the
balance sheet at fair value beginning January 1, 2001. SFAS No. 133, as amended
and interpreted, establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. Because these swaps are designated in a
cash-flow hedge, changes in the fair value of the derivative are recorded in
other comprehensive income ("OCI") and are recognized in the income statement
when the hedged item affects earnings. The adoption of SFAS No. 133 on January
1, 2001 resulted in an $845,000 increase in OCI as a cumulative transition
adjustment for derivatives designated in cash flow-type hedges prior to adopting
SFAS No. 133. Due to its limited use of derivative instruments, the effect on
earnings of adopting SFAS No. 133 was immaterial.

Capital Expenditures

The Registrant expended $9,468,000, including $3,357,000 for the IMPACT project,
on capital projects for the first three months of 2001 compared to $3,429,000
for the first three months of 2000. Capital spending is expected to be
approximately $70,000,000, of which approximately $25,000,000 relates to the
Registrant's IMPACT project, during 2001.

Business Strategies

For more than a year, the Registrant has been developing strategies to position
its business for the future. Execution of these strategies is intended to result
in a reorganization of the Registrant's business to capitalize on its strengths
in customer relationships, technology and people and its leadership positions in
certain markets. Internally, the Registrant is working to improve the efficiency
of its operations. Externally, the Registrant is looking to strengthen its
business through strategic alliances and joint ventures, as well as potential
acquisition opportunities or dispositions of under-performing or non-strategic
assets.

ENVIRONMENTAL MATTERS

The Registrant is subject to loss contingencies resulting from regulation by
various federal, state, local and foreign governmental authorities with respect
to the environmental impact of air and water emissions and noise from its mills,
as well as the disposal of solid waste generated by its operations. To comply
with environmental laws and regulations, the Registrant has incurred substantial
capital and operating expenditures in past years. During 2000, 1999 and 1998,
the Registrant incurred approximately $16,700,000, $15,800,000 and $17,700,000,
respectively, in operating costs related to complying with environmental laws
and regulations. The Registrant anticipates that environmental regulation of its
operations will continue to become more burdensome and that capital and
operating expenditures will continue, and perhaps increase, in the future. In
addition, the Registrant may incur obligations to remove or mitigate any adverse
effects on the environment resulting from its operations, including the
restoration of natural resources, and liability for personal injury and damage
to property, including natural resources. In particular, the Registrant remains
open to negotiations


                                       17
<PAGE>   18
with EPA and DEP regarding the NOVs under the federal and state air pollution
control laws. The Registrant continues to negotiate with the State of Wisconsin
and the United States regarding natural resources damages and response costs
related to the discharge of PCBs and other hazardous substances in the lower Fox
River, on which the Registrant's Neenah mill is located. The Registrant also is
in settlement discussions with DEP and Penn PIRG regarding the wastewater
discharge permit for its Spring Grove mill. The costs associated with such
matters are presently unknown but could be substantial and perhaps exceed the
Registrant's available resources. The Registrant's current assessment, after
consultation with legal counsel, is that ultimately it should be able to resolve
these environmental matters without a long-term, material adverse impact on the
Registrant. In the meantime, however, these matters could, at any particular
time or for any particular period, have a material adverse effect on the
Registrant's consolidated financial condition, liquidity or results of
operations. Moreover, there can be no assurance that the Registrant's reserves
will be adequate to provide for future obligations related to these matters or
that such obligations will not have a long-term, material adverse effect on the
Registrant's consolidated financial condition, liquidity or results of
operations.


ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk

See the discussion under the headings "Liquidity" and "Interest Rate Risk" in
Item 2 as well as Note 4 to the Registrant's unaudited condensed consolidated
financial statements.


PART II - OTHER INFORMATION


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Registrant's Annual Meeting of Shareholders was held on April 25, 2001. All
of the Board of Directors' nominees for election as Directors were elected by
the shareholders. Each was elected to a term expiring in 2004. The votes cast
for election of Directors were as follows:

<TABLE>
<CAPTION>
                                                For                   Withheld
                                             ----------               ---------
<S>                                          <C>                      <C>
       Robert P. Newcomer                    36,776,436               4,060,336
       John M. Sanzo                         36,773,748               4,060,336
</TABLE>

Item 5.  Other Information

Cautionary Statement

Any statements set forth herein or otherwise made in writing or orally by the
Registrant with regard to its goals for revenues, cost reductions and return on
capital, expectations as to industry conditions and the Registrant's financial
results and cash flow, demand for or pricing of its products, development of new
products, environmental matters 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 Registrant 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 Registrant's
expectations. Accordingly, the Registrant identifies the following important
factors, among others, which could cause its results to differ from any results
which might be projected, forecasted or estimated by the Registrant in any such
forward-looking statements: (i) variations in demand for or pricing of its
products; (ii) the Registrant's ability to identify, finance and consummate
future alliances or acquisitions; (iii) the Registrant's ability to develop new,
high value-added engineered products; (iv) the Registrant's ability to identify
and implement its planned cost reductions pursuant to its DRIVE project and
changes to its business processes contemplated by its IMPACT project; (v)
changes in the cost or


                                       18
<PAGE>   19
availability of raw materials used by the Registrant, in particular market pulp,
pulp substitutes and wastepaper; (vi) changes in energy-related costs; (vii)
changes in industry paper production capacity, including the construction of new
mills, the closing of mills and incremental changes due to capital expenditures
or productivity increases; (viii) the gain or loss of significant customers;
(ix) cost and other effects of environmental compliance, cleanup, damages,
remediation or restoration, or personal injury or property damage related
thereto, such as costs associated with the NOVs issued by EPA and DEP, the costs
of natural resource restoration or damages related to the presence of PCBs in
the lower Fox River on which the Registrant's Neenah mill is located and the
effect of complying with the wastewater discharge limitations of the Spring
Grove mill permit which the Registrant is currently appealing; (x) significant
changes in cigarette consumption, both domestically and internationally; (xi)
enactment of adverse state, federal or foreign legislation or changes in
government policy or regulation; (xii) adverse results in litigation; (xiii)
fluctuations in currency exchange rates; and (xiv) disruptions in production
and/or increased costs due to labor disputes.


Item 6.  Exhibits

         (a)      Exhibits

                  Number          Description of Documents
                  ------          ------------------------

                   3(ii)          By-Laws, as amended April 25, 2001

                    15            Letter in Lieu of Consent Regarding Review
                                  Report of Unaudited Interim Financial
                                  Information


         (b)      REPORTS ON FORM 8-K

                  Item 5   Current Report on Form 8-K dated February 7, 2001
                           filed February 15, 2001.


                                       19
<PAGE>   20
                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                P. H. GLATFELTER COMPANY



Date:  May 15, 2001

                                                C. Matthew Smith
                                                Chief Financial Officer



                                       20
<PAGE>   21
                                INDEX OF EXHIBITS

Number                               Description of Documents
- ------                               ------------------------

 3(ii)                               By-Laws, as amended April 25, 2001

  15                                 Letter in Lieu of Consent Regarding
                                     Review Report of Unaudited Interim
                                     Financial Information


                                       21
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(II)
<SEQUENCE>2
<FILENAME>w49274ex3-ii.txt
<DESCRIPTION>BY LAWS AS AMENDED APRIL 25, 2001
<TEXT>

<PAGE>   1
                                  EXHIBIT 3(ii)

                            P. H. GLATFELTER COMPANY

                                     BY-LAWS

                                    ARTICLE I

                    MEETINGS OF SHAREHOLDERS AND RECORD DATE


         1.1      ANNUAL MEETING. An annual meeting of shareholders for the
election of directors and the transaction of such other business as may properly
come before the meeting shall be held on the fourth Wednesday in April of each
year at 10:00 A.M. If the day fixed for the meeting is a legal holiday, the
meeting shall be held at the same hour on the next succeeding full business day
which is not a legal holiday.

         1.2      SPECIAL MEETINGS. Special meetings of the shareholders may be
called at any time by the Board of Directors, the Chairman of the Board, the
Chief Executive Officer or the President.

         1.3      PLACE. The annual meeting of shareholders shall be held at the
principal office of the Company. Other meetings of shareholders may be held at
such place in Pennsylvania or elsewhere as the Board of Directors may designate.

         1.4      NOTICE. Written notice stating the place, day and hour of each
meeting of shareholders and, in the case of a special meeting, the general
nature of the business to be transacted shall be given by the Secretary at least
ten days before the meeting to each shareholder of record entitled to vote at
the meeting.

         1.5      QUORUM. Except as otherwise provided in the Articles of
Incorporation, the presence in person or by proxy of shareholders entitled to
cast at least a majority of the votes which all shareholders are entitled to
cast on a particular matter shall constitute a quorum for the purpose of
considering such matter at a meeting of shareholders, but less than a quorum may
adjourn from time to time to reconvene at such time and place as they may
determine. When a quorum is present, except as may be otherwise specified in the
Articles of Incorporation
<PAGE>   2
or provided by law, all matters shall be decided by the vote of the holders of a
majority of the votes entitled to be cast at the meeting, in person or by proxy.

         1.6      RECORD DATES. The Board of Directors may fix a time not more
than ninety days prior to the date of any meeting of shareholders, or the date
fixed for the payment of any dividend or distribution, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
shares will be made or go into effect, as a record date for the determination of
the shareholders entitled to notice of or to vote at any such meeting, or to
receive payment of any such dividend or distribution, or to receive any such
allotment of rights, or to exercise the rights in respect to any such change,
conversion or exchange of shares. In such case, only such shareholders as shall
be shareholders of record at the close of business on the date so fixed shall be
entitled to notice of or to vote at such meeting, or to receive payment of such
dividend or distribution, or to receive such allotment of rights, or to exercise
such rights in respect to any change, conversion or exchange of shares, as the
case may be, notwithstanding any transfer of any shares on the books of the
Company after the record date so fixed.

                                   ARTICLE II

                                   DIRECTORS

         2.1      NUMBER AND TERM. The Board of Directors shall consist of ten
persons, comprising three classes of directors of which two classes shall
consist of four directors each and one class shall consist of two directors. At
each annual meeting of shareholders, the successors to those directors whose
terms expire in that year shall be elected to hold office for a term of three
years each, so that the term of office of one class of directors shall expire in
each year.
<PAGE>   3
         2.2      AGE QUALIFICATION. No person, other than an officer or
employee of the Company, shall be elected or reelected a director after reaching
72 years of age; provided, however, that at the 1999 annual meeting of
shareholders George H. Glatfelter may be reelected a director for one additional
three-year term. When the term of any director, other than George H. Glatfelter
or an officer or employee of the Company, extends beyond the date when the
director reaches 72 years of age, such director shall resign from the Board of
Directors effective at the annual meeting of shareholders next succeeding his
72nd birthday.

         2.3      VACANCIES. In the case of any vacancy in the Board of
Directors by death, resignation or for any other cause, including an increase in
the number of directors, the Board may fill the vacancy by choosing a director
to serve until the next selection of the class for which such director has been
chosen and until his successor has been selected and qualified or until his
earlier death, resignation or removal.

         2.4      ANNUAL MEETING. An annual meeting of the Board of Directors
shall be held each year as soon as practicable after the annual meeting of
shareholders, at the place where such meeting of shareholders was held or at
such other place as the Board of Directors may determine, for the purposes of
organization, election of officers and the transaction of such other business as
shall come before the meeting. No notice of the meeting need be given.

         2.5      REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held without notice at such times and at such places as the Board of
Directors may determine.

         2.6      SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the Chief Executive Officer or the
President. Notice of every special meeting shall be given to each director not
later than the second day immediately preceding the day of such meeting in the
case of notice by mail, telegram or courier service, and not later than the day
immediately preceding the day of such meeting in the case of notice delivered
personally or by telephone, telex, TWX or facsimile transmission. Such notice
<PAGE>   4
shall state the time and place of the meeting, but, except as otherwise provided
in the by-laws, neither the business to be transacted at, nor the purpose of,
any special meeting of the Board of Directors need be specified in the notice,
or waiver of notice, of such meeting.

         2.7      QUORUM. A majority of the directors in office shall constitute
a quorum for the transaction of business but less than a quorum may adjourn from
time to time to reconvene at such time and place as they may determine.

         2.8      COMPENSATION. Directors shall receive such compensation for
their services as shall be fixed by the Board of Directors.

         2.9      COMMITTEES. The Board of Directors may, by resolution adopted
by a majority of the whole Board, designate one or more committees, each
committee to consist of two or more of the directors of the Company. The Board
may designate one or more directors as alternate members of any Committee, who
may replace any absent or disqualified member at any meeting of the committee.
Any such committee to the extent provided in such resolution shall have and
exercise the authority of the Board of Directors in the management of the
business and affairs of the Company.

         2.10     PARTICIPATION IN MEETINGS BY COMMUNICATIONS EQUIPMENT. One or
more directors may participate in a meeting of the Board of Directors or a
committee of the Board by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other.

         2.11     LIABILITY OF DIRECTORS. A director of the Company shall not be
personally liable for monetary damages for any action taken, or any failure to
take any action, on or after January 27, 1987 unless he has breached or failed
to perform the duties of his office as provided for under Section 1713 of the
Pennsylvania Business Corporation Law of 1988, as amended, and the breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness.
Any repeal, amendment, or modification of this Paragraph shall be prospective
only
<PAGE>   5
and shall not increase, but may decrease, the liability of a director with
respect to actions or failures to act occurring prior to such change.

         2.12     OFFICERS. The officers of the Company shall be a Chairman of
the Board, a Chief Executive Officer, a President, one or more Vice Presidents,
a Secretary, a Treasurer, a Controller and such other officers as the Board of
Directors may deem advisable. In the absence or disability of the Chairman of
the Board and the Chief Executive Officer, the President, a Director designated
by the Board or the officer or officers in the order designated by the Board of
Directors shall have the authority and perform the duties of the Chairman of the
Board and Chief Executive Officer. Any two or more offices may be held by the
same person.

         2.13     TERM. Each officer shall hold office until his successor is
elected or appointed and qualified or until his death, resignation or removal by
the Board of Directors.

         2.14     AUTHORITY, DUTIES AND COMPENSATION. All officers shall have
such authority, perform such duties and receive such compensation as may be
provided in the by-laws or as may be determined by the Board of Directors.

         2.15     CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside
at all meetings of the Board of Directors and of the Executive Committee and
shall perform such other duties as may be assigned by the Board of Directors.

         2.16     CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be
the chief executive officer of the Company and shall preside at all meetings of
the shareholders and, if a director of the Company, in the absence or disability
of the Chairman of the Board, or if that office is vacant, shall preside at all
meetings of the Board of Directors and of the Executive Committee. He or she
shall be responsible for the general management of the business of the Company,
subject to the control of the Board of Directors. In the absence or disability
of the President, or if that office is vacant, the Chief Executive Officer shall
have the authority and perform the duties of the President.

         2.17     PRESIDENT. The President shall perform such duties as may be
assigned by the Board of Directors and, in the absence or disability of the
Chief
<PAGE>   6
Executive Officer, or if that office is vacant, shall have the authority and
perform the duties of the Chief Executive Officer.

         2.18     VICE PRESIDENT. In the absence or disability of the Chief
Executive Officer and the President, or any other officer or officers, the Vice
Presidents in the order designated by the Board of Directors shall have the
authority and perform the duties of the Chief Executive Officer, the President
or other officer as the case may be.

         2.19     SECRETARY. The Secretary shall give notice of meetings of the
shareholders, of the Board of Directors and of the Executive Committee, attend
all such meetings and record the proceedings thereof. In the absence or
disability of the Secretary, an Assistant Secretary or any other person
designated by the Board of Directors or the Chief Executive Officer shall have
the authority and perform the duties of the Secretary.

         2.20     TREASURER. The Treasurer shall have charge of the securities
of Company and the deposit and disbursement of its funds, subject to the control
of the Board of Directors. In the absence or disability of the Treasurer, as
Assistant Treasurer or any other person designated by the Board of Directors of
the Chief Executive Officer shall have the authority and perform the duties of
the Treasurer.

         2.21     CONTROLLER. The Controller shall be the principal accounting
officer and shall keep books recording the business transactions of the Company.
He shall be in charge of the accounts of all of its offices and shall promptly
report and properly record in the books of the Company all relevant date
relating to the Company's business.

                                   ARTICLE III

                                 INDEMNIFICATION

         3.1      INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS. The
Company shall indemnify any director or officer of the Company or any of its
subsidiaries who was or is an "authorized representative" of the Company (which
shall mean for the purposes of Paragraphs 3.1. through 3.7, a director or
officer
<PAGE>   7
of the Company, or a person serving at the request of the Company as a director,
officer, partner, fiduciary or trustee of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise) and who was or
is a "party" (which shall include for purposes of Paragraphs 3.1 through 3.7 the
giving of testimony or similar involvement) or is threatened to be made a party
to any "proceeding" (which shall mean for purposes of Paragraphs 3.1 through 3.7
any threatened, pending or completed action, suit, appeal or other proceeding of
any nature, whether civil, criminal, administrative or investigative, whether
formal or informal, and whether brought by or in the right of the Company, its
shareholders or otherwise) by reason of the fact that such person was or is an
authorized representative of the Company to the fullest extent permitted by law,
including without limitation indemnification against expenses (which shall
include for purposes of Paragraphs 3.1 through 3.7 attorneys' fees and
disbursements), damages, punitive damages, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such proceeding unless the act or failure to act giving rise to
the claim is finally determined by a court to have constituted willful
misconduct or recklessness. If an authorized representative is not entitled to
indemnification in respect of a portion of any liabilities to which such person
may be subject, the Company shall nonetheless indemnify such person to the
maximum extent for the remaining portion of the liabilities.

         3.2      ADVANCEMENT OF EXPENSES. The Company shall pay the expenses
(including attorneys' fees and disbursements) actually and reasonably incurred
in defending a proceeding on behalf of any person entitled to indemnification
under Paragraph 3.1 in advance of the final disposition of such proceeding upon
receipt of an undertaking by or on behalf of such person to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Company as authorized in Paragraphs 3.1 through 3.7 and may
pay such expenses in advance on behalf of any employee or agent on receipt of a
similar undertaking.
<PAGE>   8
The financial ability of such authorized representative to make such repayment
shall not be prerequisite to the making of an advance.

         3.3      EMPLOYEE BENEFIT PLANS. For purposes of Paragraphs 3.1 through
3.7, the Company shall be deemed to have requested an officer or director to
serve as fiduciary with respect to an employee benefit plan where the
performance by such person of duties to the Company also imposes duties on, or
otherwise involves services by, such person as a fiduciary with respect to the
plan; excise taxes assessed on an authorized representative with respect to any
transaction with an employee benefit plan shall be deemed "fines"; and action
taken or omitted by such person with respect to an employee benefit plan in the
performance of duties for a purpose reasonably believed to be in the interest of
the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Company.

         3.4      SECURITY FOR INDEMNIFICATION OBLIGATIONS. To further effect,
satisfy or secure the indemnification obligations provided herein or otherwise,
the Company may maintain insurance, obtain a letter of credit, act as
self-insurer, create a reserve, trust, escrow, cash collateral or other fund or
account, enter into indemnification agreements, pledge or grant a security
interest in any assets or properties of the Company, or use any other mechanism
or arrangement whatsoever in such amounts, at such costs, and upon such other
terms and conditions as the Board of Directors shall deem appropriate.

         3.5      RELIANCE UPON PROVISIONS. Each person who shall act as an
authorized representative of the Company shall be deemed to be doing so in
reliance upon the rights of indemnification provided by these Paragraphs 3.1
through 3.7.

         3.6      AMENDMENT OR REPEAL. All rights of indemnification under
Paragraphs 3.1 through 3.7 shall be deemed a contract between the Company and
the person entitled to indemnification under these Paragraphs 3.1 through 3.7
pursuant to which the Company and each such person intend to be legally bound.
Any repeal, amendment or modification hereof shall be prospective only and shall
not limit,
<PAGE>   9
but may expand, any rights or obligations in respect of any proceeding whether
commenced prior to or after such change to the extent such proceeding pertains
to actions or failures to act occurring prior to such change.

         3.7      SCOPE. The indemnification, as authorized by these Paragraphs
3.1 through 3.7, shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any statute, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in an official capacity and as to action in any
other capacity while holding such office. The indemnification and advancement of
expenses provided by or granted pursuant to these Paragraphs 3.1 through 3.7
shall continue as to a person who has ceased to be an officer or director in
respect of matters arising prior to such time, and shall inure to the benefit of
the heirs and personal representatives of such person.

                                   ARTICLE IV

                     STOCK CERTIFICATES AND CORPORATE SEAL

         4.1      EXECUTION. Certificates of shares of capital stock of the
Company shall be signed by the Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer, but where a certificate is
signed by a transfer agent or a registrar, the signature of any corporate
officer may be facsimile, engraved or printed.

         4.2      SEAL. The Company shall have a corporate seal which shall bear
the name of the Company and State and year of its incorporation. The seal shall
be in the custody of the Secretary and may be used by causing it or a facsimile
to be impressed or reproduced upon or affixed to any document.
<PAGE>   10
                                   ARTICLE V

                                    NOTICES

         5.1      FORM OF NOTICE. Whenever written notice is required to be
given to any person by law, the Articles of Incorporation or these by-laws, it
may be given to such person either personally or by telephone or by sending a
copy thereof by first class or express mail, postage prepaid, or by telegram
(with messenger service specified), telex or TWX (with answerback received) or
courier service, charges prepaid, or by facsimile transmission, to the address
(or the telex, TWX or facsimile number) appearing on the books of the Company
or, in the case of a director, to the address supplied by the director to the
Company for the purpose of notice. If the notice is sent by mail, telegraph or
courier service, it shall be deemed to have been given to the person entitled
thereto when deposited in the United States mail or with a telegraph office or
courier service for delivery to that person or, in the case of telex or TWX,
when dispatched or, in the case of facsimile transmission, when received. A
notice of meeting shall specify the place, day and hour of the meeting.

         5.2      WAIVER OF NOTICE. Any notice required to be given under these
by-laws may be effectively waived by the person entitled thereto by written
waiver signed before or after the meeting to which such notice would relate or
by attendance at such meeting otherwise than for the purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting was not lawfully called or convened.

                                   ARTICLE VI

                                   AMENDMENTS

         6.1      AMENDMENTS. These by-laws may be amended or repealed and new
by-laws may be adopted by the affirmative vote of a majority of the directors of
the Company or by the affirmative vote of shareholders entitled to cast a
majority
<PAGE>   11
of the votes which all shareholders are entitled to cast at any annual, regular
or special meeting of directors or shareholders, as the case may be; provided,
however, that new by-laws may not be adopted and these by-laws may not be
amended or repealed in any way that limits indemnification rights, increases the
liability of directors or changes the manner or vote required for any such
adoption, amendment or repeal, except by the affirmative vote of the
shareholders entitled to cast at least a majority of the votes which all
shareholders are entitled to cast thereon. In the case of a meeting of
shareholders, written notice shall be given to each shareholder entitled to vote
thereat that the purpose, or one of the purposes, of the meeting is to consider
the adoption, amendment or repeal of the by-laws.

                                   ARTICLE VII

                                EMERGENCY BY-LAWS

         7.1      WHEN OPERATIVE. The emergency by-laws provided by the
following Paragraphs shall be operative during any emergency resulting from
warlike damage or an attack on the United States or any nuclear or atomic
disaster, notwithstanding any different provision in the preceding Paragraphs of
the by-laws or in the Articles of Incorporation of the Company or in the
Pennsylvania Business Corporation Law. To the extent not inconsistent with these
emergency by-laws, the by-laws provided in the preceding Paragraphs shall remain
in effect during such emergency and upon the termination of such emergency the
emergency by-laws shall cease to be operative unless and until another such
emergency shall occur.

         7.2      MEETINGS. During any such emergency:

                  (a)      Any meeting of the Board of Directors may be called
by any director. Whenever any officer of the Company who is not a director has
reason to believe that no director is available to participate in a meeting,
such officer may call a meeting to be held under the provisions of this
Paragraph.
<PAGE>   12
                  (b)      Notice of each meeting called under the provisions of
this Paragraph shall be given by the person calling the meeting or at his
request by any officer of the Company. The notice shall specify the time and the
place of the meeting, which shall be the head office of the Company at the time
if feasible and otherwise any other place specified in the notice. Notice need
be given only to such of the directors as it may be feasible to reach at the
time and may be given by such means as may be feasible at the time, including
publication or radio. If given by mail, messenger, telephone or telegram, the
notice shall be addressed to the director at his residence or business address
or such other place as the person giving the notice shall deem suitable. In the
case of meetings called by an officer who is not a director, notice shall also
be given similarly, to the extent feasible, to the persons named on the list
referred to in part (c) of this Paragraph. Notice shall be given at least two
days before the meeting if feasible in the judgment of the person giving the
notice and otherwise the meeting may be held on any shorter notice he shall deem
suitable.

                  (c)      At any meeting called under the provisions of this
Paragraph, the director or directors present shall constitute a quorum for the
transaction of business. If no director attends a meeting called by an officer
who is not a director and if there are present at least three of the persons
named on a numbered list of personnel approved by the Board of Directors before
the emergency, those present (but not more than the seven appearing highest in
priority on such list) shall be deemed directors for such meeting and shall
constitute a quorum for the transaction of business.

         7.3      LINES OF SUCCESSION. The Board of Directors, during as well as
before any such emergency, may provide, and from time to time modify, lines of
succession in the event that during such an emergency any or all officers or
agents of the Company shall for any reason be rendered incapable of discharging
their duties.

         7.4      OFFICES. The Board of Directors, during as well as before any
such emergency, may, effective in the emergency, change the head office or
<PAGE>   13
designate several alternative head offices or regional offices, or authorize the
officers so to do.

         7.5      LIABILITY. No officer, director or employee acting in
accordance with these emergency by-laws shall be liable except for willful
misconduct.

         7.6      REPEAL OR CHANGE. These emergency by-laws shall be subject to
repeal or change by further action of the Board of Directors or by action of the
shareholders, except that no such repeal or change shall modify the provisions
of the next preceding Paragraph with regard to action or inaction prior to the
time of such repeal or change.

                                  ARTICLE VIII

                           PENNSYLVANIA ACT 36 OF 1990

         8.1      FIDUCIARY DUTY. Subsections (a) through (d) of Section 1715 of
the Pennsylvania Business Corporation Law of 1988, as amended, shall not be
applicable to the Company.

         8.2      CONTROL-SHARE ACQUISITIONS. Subchapter G of Chapter 25 of the
Pennsylvania Business Corporation Law of 1988, as amended, (relating to
control-share acquisitions), shall not be applicable to the Company.

         8.3      DISGORGEMENT. Subchapter H of Chapter 25 of the Pennsylvania
Business Corporation Law of 1988, as amended, (relating to disgorgement by
certain controlling shareholders following attempts to acquire control), shall
not be applicable to the Company.


- ----------
Effective April 25, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15
<SEQUENCE>3
<FILENAME>w49274ex15.txt
<DESCRIPTION>LETTER IN LIEU OF CONSENT REGARDING REVIEW REPORT
<TEXT>

<PAGE>   1
                                   EXHIBIT 15
         LETTER IN LIEU OF CONSENT REGARDING REVIEW REPORT OF UNAUDITED
                          INTERIM FINANCIAL INFORMATION


P. H. Glatfelter Company:

We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited condensed
consolidated financial statements of P. H. Glatfelter Company and subsidiaries
for the three months ended March 31, 2001 and 2000, as indicated in our report
dated April 17, 2001, except for Note 7 as to which the date is May 1, 2001,
which includes an explanatory paragraph related to a change in method of
accounting for derivative financial instruments; because we did not perform an
audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, is
incorporated by reference in Registration Statement Nos. 33-25884, 33-37198,
33-49660, 33-53338, 33-54409, 33-62331, 333-12089, 333-26587, 333-34797,
333-53977 and 333-66991 on Forms S-8.

We are also aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.



Deloitte & Touche LLP

Philadelphia, Pennsylvania
May 1, 2001

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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