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 ...

Clearwater Paper Corporation (NYSE:CLW) Q4 2023 Earnings Conference Call February 21, 2024 5:00 PM ET Company Participants 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 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 on mute to prevent any ...

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]

Clearwater Paper Corporation (NYSE:CLW) Q3 2023 Earnings Conference Call October 30, 2023 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 Paul Quinn - RBC Capital Markets Operator Good afternoon. My name is Briana, and I will be your conference operator today. At this time, I would like to welcome everyone t ...