Clearwater Paper(CLW) - 2024 Q3 - Quarterly Report

Financial Performance - Net sales for Q3 2024 reached $393.3 million, a 41$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$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$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]