1 5 The accompanying notes are an integral part of these consolidated financial statements. (Unaudited) In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, Income Taxes—Improvements to Income Tax Disclosures (Topic 740), which requires enhanced disclosures primarily related to the rate reconciliation and disaggregation of income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permi ...

Operator With that, I'll turn the call over to Sherri to cover our financial results. Company Participants Conference Call Participants Unidentified Company Representative Clearwater Paper Corporation (NYSE:CLW) Q4 2023 Earnings Conference Call February 21, 2024 5:00 PM ET Sherri Baker - Senior Vice President and Chief Financial Officer Ladies and gentlemen, thank you for standing by, and welcome to the Clearwater Paper Fourth Quarter and Full Year 2023 Earnings Conference Call. All lines have been placed o ...

Market Demand and Pricing - The company's Pulp and Paperboard segment experienced a surge in demand during and following the COVID-19 pandemic, but demand and prices declined in 2023 due to customers deploying their inventories[92] - The company's top 10 customers accounted for 54% of sales in 2023, and increased price competition and a significant drop in demand adversely affected its paperboard revenue and gross margins[120] - The company's ability to sustain pricing and production levels during periods of weak demand is uncertain, and prolonged market weakness could materially adversely affect its results of operations and cash flows[101] - Pulp and paperboard sales decreased by 6.4% in 2023 compared to 2022, with sales dropping from $1,136.3 million to $1,063.7 million[216] - Paperboard shipments decreased by 7.7% in 2023, with 751,520 short tons shipped compared to 814,556 short tons in 2022[216] - The U.S. tissue industry saw a 7-8% increase in parent roll sales prices industry-wide in 2023 compared to the prior year[208] Competition and Market Position - The company's Pulp and Paperboard business competes with larger competitors such as WestRock, Georgia-Pacific, and Graphic Packaging, and any increase in manufacturing capacity by these or other producers could result in overcapacity and downward pressure on pricing[99] - The company's Consumer Products segment faces increased competition from private label tissue products, with several new tissue paper machines and converting assets completed or announced, leading to a substantial increase in tissue supply in the North American market[100] - The company's ability to compete is influenced by factors such as manufacturing capacity, general economic conditions, and the availability and demand for paperboard substitutes, including non-paper-based packaging and other grades of paperboard[99] - The company faces intense competition from larger competitors with greater financial resources, lower costs, and better access to raw materials[125] Supply Chain and Raw Materials - In 2023, the company sourced 70% of its Consumer Product segment pulp requirements (or 30% overall) from external suppliers, exposing it to significant price fluctuations[94] - The company's wood fiber supply is subject to regional market influences, and the price of wood fiber in the Pacific Northwest is expected to remain volatile, potentially increasing costs and harming operations and financial results[94] - The company relies on a limited number of third-party suppliers, which poses risks related to pricing, availability, quality, and delivery schedules[123] - Chemical and energy costs significantly impact the company's operations and cash flows, with prices for petroleum-based chemicals expected to remain volatile[123] Financial Performance and Debt - The company had approximately $468 million face value of debt outstanding as of December 31, 2023, with availability of $120 million under its PCA Credit Agreement and $235.3 million under its ABL Credit Agreement[111] - Net income for 2023 was $107.7 million, a significant increase from $46.0 million in 2022 and a loss of $28.1 million in 2021[241] - Net cash flows from operating activities in 2023 were $190.7 million, up from $150.2 million in 2022 and $96.4 million in 2021[241] - Capital expenditures for property, plant, and equipment in 2023 were $73.7 million, compared to $33.5 million in 2022 and $38.4 million in 2021[241] - Total cash, cash equivalents, and restricted cash at the end of 2023 were $42.0 million, down from $54.4 million in 2022 and $26.2 million in 2021[241][246] - The company repurchased $17.9 million of common stock in 2023 under its stock repurchase program[252] - The company completed an initial draw of $150 million under the PCA Credit Agreement in Q4 2023, with a total revolving term loan commitment of $270 million[254] - Long-term fixed-rate debt maturing in 2028 is $425.0 million, with an average interest rate of 6.94%[256] - The company expects to remain in compliance with its Credit Agreements, which require a consolidated fixed charge coverage ratio of not less than 1.10x to 1.00x[254] Operational Risks and Disruptions - The company's operations are exposed to risks from unexpected production disruptions, such as prolonged power outages, mechanical failures, and natural catastrophes, which could cause significant lost production and material adverse effects on results of operations[94] - The company's IT systems are critical to operations, and disruptions could harm manufacturing, sales, and financial performance[131] - Extreme weather events caused by climate change could damage facilities, disrupt supply chains, and increase costs[134] Environmental and Regulatory Compliance - The company is subject to significant environmental regulations, which could lead to increased compliance costs and operational restrictions[132] Pension and Tax Considerations - The company contributed approximately $5.8 million to multiemployer pension plans in 2023, with potential for increased future contributions[137] - The company received a $26 million tax refund in 2022 but has fully reserved for the benefit due to uncertainty over its tax position[145] Consumer Products Segment Performance - Retail tissue sales increased by 9.0% in 2023, reaching $1,016.2 million compared to $932.3 million in 2022[219] - Adjusted EBITDA for the Consumer Products segment increased by 102.7% in 2023, reaching $150.5 million compared to $74.2 million in 2022[219] Capital Expenditures and Commitments - The company expects cash paid for capital expenditures in 2024 to be approximately $90 million to $100 million[224] - The company has $48.2 million in purchase commitments associated with capital expenditures, all payable within 12 months[226] Corporate Expenses and Wages - Corporate expenses increased to $78.3 million in 2023, up from $71.1 million in 2022, primarily due to business improvement projects and higher wages[220] Interest Rate and Debt Service Risks - The company is exposed to risks from rising interest rates, which could increase debt service obligations and borrowing costs[145] Pulp Shipments and Production - Pulp shipments increased by 32.9% in 2023, with 34,084 short tons shipped compared to 25,647 short tons in 2022[216]

In summary, we have spent significant efforts over the last several years improving our operating performance, especially in areas that matter most to our customers. We have also greatly improved our financial position by focusing on cash flow generation and debt reduction. We are now well-positioned to look at all strategic options for our company to grow and create value for our shareholders. You know, if you look, you know, in the long run, there are some favorable trends in SBS sustainability trends. Th ...

ARSEN KITCH President, Chief Executive Officer and Director CLEARWATER PAPER CORPORATION FORWARD LOOKING STATEMENTS Non-GAAP Financial Measures Overall SHERRI BAKER Senior Vice President and Chief Financial Officer This presentation of supplemental information contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding order patterns; product demand and industry trend ...

2022 | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------------------------------|--------------------|-----------------------------------|----------------------------|-----------------------------------------------|---------------------------------| | Interest expense | Quarter \n2023 \n$ | Ended September \n \n(7.4) $ | 30, \n2022 \n(8.0) $ | Nine Months Ended \n2023 \n(22.6) $ | September 30, \n2022 \n(26.6) | | Amortization of deferred debt costs | | (0 ...

SECOND QUARTER EARNINGS RELEASE MATERIALS AUGUST 1, 2023 BECKY BARCKLEY Corporate Controller and Interim Chief Financial Officer Cautionary Statement Regarding Forward Looking Statements Non-GAAP Financial Measures © Clearwater Paper Corporation 2023 2 Overall • Net income $30 million • Adjusted EBITDA $71 million, up $8 million versus Q2 2022 • SBS prices increased from Q2 2022 Consumer Products CLEARWATER PAPER CORPORATION ARSEN S. KITCH President, Chief Executive Officer And Director FORWARD LOOKING STAT ...

 LetÂ's now move to Slide 11 for an outlook on the third quarter of 2023, as well as some updates to our full year expectations. Based on the continued momentum in tissue and moderating input costs, we expect adjusted EBITDA in the range of $73 million to $83 million for the quarter. In terms of our full year assumptions, we expect that operating results will be favorable relative to 2022 by $42 million due to fewer major maintenance outages and better operating performance. Additionally, we now expect a b ...

Form 10-Q ITEM 5. Other Information 22 CLEARWATER PAPER CORPORATION Consolidated Statements of Comprehensive Income (Unaudited) | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------------------|-------------------|----------------|-------|------------------------------|-------------------|----------------------------------------|------------------------------| | (In millions, except share amounts which are in thousands) | Common \n ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2023 or ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 001-34146 CLEARWATER PAPER CORPORATION (Exact name of registrant as specified in its charter) Delaware 20-3594554 (State or other j ...