| --- | --- | --- | |---------------------------------------------------|-------|-------| | | | | | Third Quarter Earnings Release Materials | | | | November 4, 2024 | | | | ARSEN KITCH | | | | President, Chief Executive Officer and Director | | | | SHERRI BAKER | | | | Senior Vice President and Chief Financial Officer | | | Forward Looking Statements 2 Cautionary Statement Regarding Forward Looking Statements This presentation of supplemental information contains, in addition to historical information, cer ...

Financial Performance - Net sales for Q3 2024 reached $393.3 million, a 41% increase from $278.9 million in Q3 2023[66] - The company reported a net loss from continuing operations of $10.7 million, or $0.64 per diluted share, compared to a profit of $14.9 million, or $0.88 per diluted share, in Q3 2023[66] - Adjusted EBITDA from continuing operations for Q3 2024 was $20.2 million, down 38% from $32.6 million in Q3 2023[70] - For the nine months ended September 30, 2024, net sales increased by 15% to $1.0 billion compared to $867.4 million in the same period of 2023[66] - The cost of sales for Q3 2024 was $363.2 million, a 59% increase from $228.3 million in Q3 2023[73] - Gross margin declined by 41% in Q3 2024, with a gross margin of $30.1 million compared to $50.7 million in Q3 2023[76] - Selling, general and administrative expenses increased by 12% in Q3 2024, totaling $31.6 million compared to $28.3 million in Q3 2023[77] - The company experienced a 63% decline in gross margin for the nine months ended September 30, 2024, compared to the same period in 2023[76] Operational Metrics - Paperboard shipments increased by 67.2% in Q3 2024, totaling 314,320 short tons compared to 187,944 short tons in Q3 2023[74] - The increase in retail sales volumes in the consumer products division was attributed to higher demand for private label products[80] Cash Flow and Investments - Net cash flows from operating activities for the nine months ended September 30, 2024, were $96.5 million, a decrease from $125.0 million for the same period in 2023, attributed to lower operating performance and higher interest payments related to the Augusta acquisition[84] - Net cash flows used in investing activities for the nine months ended September 30, 2024, were $791.8 million, significantly higher than $48.5 million in the prior year, primarily due to a $708.2 million acquisition of a paperboard manufacturing facility in Augusta, Georgia[85] - Net cash provided by financing activities during the nine months ended September 30, 2024, was $688.9 million, compared to a net cash outflow of $20.7 million in the same period of 2023[86] Debt and Credit Agreements - The Company has a Term Credit Agreement with a total commitment of $760 million, which includes a $270 million Term Revolver Facility and a $400 million Farm Credit Term Loan Facility, both fully drawn as of May 1, 2024[87] - The Company expects capital expenditures for 2024 to be approximately $100 million to $120 million[85] - As of September 30, 2024, the Company was in compliance with the covenants associated with its Term Credit Agreement and ABL Credit Agreement[89] - The Company has the option to prepay and reborrow under the Term Revolver Facility without premium or penalty, subject to certain conditions[88] - The Company’s ABL Credit Agreement includes a $375 million revolving loan commitment, maturing on November 7, 2027, with interest rates varying based on availability[88] - The Company recorded a decrease in net cash flows from operating activities due to increased interest payments related to debt incurred from acquisitions[84] - The Company may face challenges in maintaining compliance with its credit agreements if financial conditions deteriorate[89]

| --- | --- | --- | --- | --- | --- | |--------|-------|-------------------|----------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | CLEARWATER PAPER | | | | | | | | | | | | | | CORPORATION | | | | | SECOND | | QUARTER EARNINGS | | | | | | | RELEASE MATERIALS | | | | | | | | AUGUST 6, 2024 | | | ARSEN KITCH President, Chief Executive Officer and Director SHERRI BAKER Senior Vice President and Chief Financial Officer FORWARD LOOKING STATEMENTS Cautionary Statement Regarding Forward L ...

Financial Data and Key Metrics - Net sales for Q2 2024 were $586 million, up 12% YoY, primarily driven by incremental volume from the Augusta acquisition [8] - Adjusted EBITDA was $35 million, down $36 million YoY, mainly due to a planned major maintenance outage at the Lewiston facility [8] - Consolidated net loss was $26 million or $1.55 per diluted share, with an adjusted loss per share of $0.51 [13] - Liquidity at the end of Q2 was $224 million, with a debt-to-adjusted EBITDA leverage ratio of 3.58 times [16] Business Line Performance - Paperboard net sales increased 23% YoY, driven by a 46% increase in shipment volume due to the Augusta acquisition, offset by a 14% decline in pricing [9] - Paperboard adjusted EBITDA was $11 million, including $9 million in insurance recoveries, but impacted by a $32 million maintenance outage cost [9] - Tissue revenues were flat YoY at $253 million, with 4% volume growth offset by 3% lower cost index-based pricing [11] - Tissue adjusted EBITDA was $41 million, with a margin of 16.4%, marking the fifth consecutive quarter above 15% [12] Market Data and Key Metrics - SBS industry shipments improved sequentially by 1% between Q1 and Q2 2024, with operating rates flat at 84% [10] - Food service demand is strong, leading to capacity constraints and the implementation of price increases for certain grades [11] - Pulp pricing was lower YoY but higher sequentially, with expectations of it being a headwind in Q3 and Q4 2024 [15] Company Strategy and Industry Competition - The company is focusing on becoming a premier independent supplier of Paperboard Products in North America, with plans to expand product offerings and substrates [7] - The acquisition of the Augusta facility and the planned divestiture of the Tissue business are seen as transformational steps to strengthen the balance sheet and position for future growth [5][6] - The company aims to move all Paperboard facilities to an annual outage schedule starting in 2025 to improve operational performance [10] Management Commentary on Operating Environment and Future Outlook - Management remains bullish on long-term market fundamentals for Paperboard, citing consumer preferences and sustainability trends [11] - The company expects continued recovery in Paperboard demand in Q3, with higher production volumes and lower outage costs [19] - Full-year 2024 assumptions include higher volumes and synergies from Augusta, as well as higher outage costs from Lewiston [20] Other Important Information - The company repurchased approximately $3 million of its stock during Q2 to offset dilution from employee equity grants [17] - Ongoing maintenance CapEx is expected to be $70 million to $80 million, excluding large projects, following the Augusta acquisition and Tissue divestiture [21] Q&A Session Summary Question: Growth and Diversification of Paperboard Portfolio - The company aims to provide a more complete offering to converters, including lightweight products, other substrates, and different coatings, depending on customer needs and market opportunities [23][25] Question: Maintenance and CapEx Implications - The major maintenance outage at Lewiston was more challenging than expected, but no material changes to future CapEx outlook are anticipated [26] - The total impact of the outage is expected to exceed $40 million, with the majority reflected in Q3 guidance [27] Question: Annual Maintenance Cycles - The company plans to finalize details on annual maintenance cycles in the coming quarters, with a likely focus on Q2 for Lewiston and Q4 for Augusta [28] Question: Corporate Expense Run Rate in 2025 - The company expects to maintain SG&A expenses at 6% to 6.5% of sales, with further updates provided in future quarters [29]

Financial Performance - Net sales for Q2 2024 were $586.4 million, a 11.8% increase from $524.6 million in Q2 2023[58] - The company reported a net loss of $25.8 million, or $1.55 per diluted share, compared to a net income of $29.7 million, or $1.75 per diluted share in the same quarter last year[58] - Adjusted EBITDA for Q2 2024 was $35.3 million, down 50.7% from $71.5 million in Q2 2023[58] - For the first half of 2024, net sales increased by 3% to $1.1 billion compared to $1 billion in the first half of 2023[58] - The company recorded a net loss of $8.6 million for the first half of 2024, compared to a net income of $53.5 million in the same period last year[58] - Adjusted EBITDA for the first half of 2024 was $96.8 million, a decrease of 29.4% from $137.2 million in the first half of 2023[58] Segment Performance - Paperboard segment net sales increased by 26.1% to $331.5 million in Q2 2024 compared to $263.0 million in Q2 2023[66] - Paperboard shipments increased by 46.4% to 272,585 short tons in Q2 2024 compared to 186,160 short tons in Q2 2023[66] - Operating income for the paperboard segment was a loss of $12.2 million in Q2 2024, a decrease of 129.1% from an income of $42.0 million in Q2 2023[66] - The company experienced a significant decrease in sales prices in the Pulp and Paperboard segment due to previously announced price decreases and changes in product mix[66] - Retail tissue net sales for the quarter ended June 30, 2024, were $252.0 million, a decrease of 0.3% compared to $252.8 million in the prior year[68] - Operating income for the quarter increased by 9.7% to $27.4 million from $25.0 million in the same period last year[68] - Adjusted EBITDA for the quarter was $41.4 million, reflecting a 4.3% increase from $39.7 million year-over-year[68] Cash Flow and Investments - Net cash flows provided by operating activities for the six months ended June 30, 2024, were $80.3 million, compared to a cash outflow of $36.9 million in the same period of 2023[74] - Net cash flows used in investing activities for the six months ended June 30, 2024, were $744.8 million, including $708.2 million for the acquisition of a paperboard manufacturing facility[75] - Net cash provided by financing activities for the six months ended June 30, 2024, was $662.1 million, primarily from the issuance of long-term debt[76] Corporate Expenses and Outlook - Corporate expenses for the quarter were $17.7 million, down from $20.1 million in the same period last year[70] - Retail sales volumes in the Consumer Products segment increased due to higher demand for private label products[69] - The company expects capital expenditures to be approximately $120 million to $140 million during 2024[75] Debt and Financing - The Term Credit Agreement includes a term revolver loan commitment of $270 million, with $150 million borrowed as of October 27, 2023[77] - The Company has a $150 million borrowing under the Term Revolver Facility with an all-in interest rate of 9.13%[78] - The Term Loan Facilities require mandatory prepayments of 50% of quarterly excess cash flows, less any voluntary prepayments[78] - The Company must maintain a maximum consolidated leverage ratio of 4.50 to 1.00 until the first fiscal quarter ending at least 15 months after May 1, 2024[78] - Under the ABL Credit Agreement, the Company has a $375 million revolving loan commitment, maturing on November 7, 2027[79] - The ABL Credit Agreement requires a consolidated fixed charge coverage ratio of not less than 1.10x to 1.00x during an event of default[79] - The Company is currently in compliance with the covenants associated with both the Term Credit Agreement and the ABL Credit Agreement as of June 30, 2024[79] - Interest rates for loans under the Term Loan Facilities may vary between 1.75% and 4.25% based on the Company's consolidated leverage ratio[78] - The Company may increase commitments under the ABL Credit Agreement by up to $100 million, subject to conditions[78] - The Company is required to maintain a minimum current ratio of not less than 1.25 to 1.00 under the Term Credit Agreement[78] Market Risk - There have been no significant developments regarding the Company's exposure to market risk for the quarter ended June 30, 2024[81]

The global paper packaging market is estimated at US$409.6 billion in 2024 and is projected to grow at a CAGR of 4.7% during the forecast period 2024-2034. Increasing Urbanisation and Changing Lifestyles https://www.visiongain.com/report/paper-packaging-market-2024/#download_sampe_div What are the Current Market Drivers? The exponential growth of e-commerce and home delivery services has led to a surge in demand for packaging materials that protect goods during transit. Paper packaging, particularly corruga ...

AlexandrBognat/iStock via Getty Images Synopsis Clearwater Paper Corporation (NYSE:CLW) is one of the major premier manufacturers of bleached paperboard and at-home tissue products. CLW has experienced volatile revenue growth, but has proven to be able to increase their profitability margins year after year. Despite improved profitability margins, CLW underperformed slightly in comparison to its peers but has shown the strongest overall growth outlook. With the growing preference for recycled-based packagin ...

Clearwater Paper Corporation (NYSE:CLW) Q1 2024 Earnings Conference Call April 29, 2024 5:00 PM ET Company Participants Sloan Bohlen - Investor Relations Arsen Kitch - President and Chief Executive Officer Sherri Baker - Senior Vice President and Chief Financial Officer Conference Call Participants Matthew McKellar - RBC Capital Markets Operator Good afternoon. My name is Brianna and I will be your conference operator today. At this time I would like to welcome everyone to the Clearwater Paper First Quarter ...

Clearwater Paper 6 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) | --- | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------|-------|------------------|-------|-----------------------|-------|---------------------| | | | March 31, \n2024 | | Quarter Ended \n2023 | | December 31, \n2023 | | | | | | | | | | Net Sales | | | | | | | | Pulp and Paperboard | | $ 244.5 | | $ 278.8 | | $ 251.3 | | Consumer Products 253.1 248.3 262.0 | | | | | | | | Elimination ...

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 ...