Financial Data and Key Metrics Changes - Net sales increased by 12% year-over-year, reaching $1.6 billion, driven by a 14% increase in shipments [4][18] - Adjusted EBITDA improved to $107 million, an increase of $71 million compared to the previous year, attributed to cost control and execution [4][18] - SG&A expenses decreased to 6.5% of net sales from 8.4% in 2024, reflecting improved cost discipline [5] Business Line Data and Key Metrics Changes - The company successfully integrated the Augusta Mill and separated its tissue business ahead of schedule [4] - Major maintenance outage costs totaled $50 million, significantly lower than the previous year due to better planning [5][18] - The company repurchased $17 million worth of shares during the year, with $79 million remaining under its authorization [5] Market Data and Key Metrics Changes - Industry shipments of SBS were largely flat year-over-year, with a competitor adding over 500,000 tons of new capacity, leading to decreased operating rates [8] - The company faced a $50 million price headwind due to pricing pressures, with an estimated $70 million pricing headwind expected in 2026 [10][11] - RISI projects a recovery in SBS operating rates and pricing in 2026, with an expected increase of $60 per ton [11] Company Strategy and Development Direction - The company is focused on maintaining financial flexibility and optimizing capital allocation, including refinancing its 2020 notes [6] - Plans to launch a new lightweight paperboard product line, Viora, in the second quarter, aimed at competing with FBB [14] - The company is evaluating external options to add CRB to its portfolio to diversify end market exposure [16] Management Comments on Operating Environment and Future Outlook - Management noted that the paperboard industry is facing challenging supply and demand dynamics, particularly in SBS, with demand recovery not materializing as expected [7] - The company remains optimistic about demand growth in 2026, citing signs of recovery from CPG and QSR companies [35] - Management emphasized the need for price increases to offset inflation and maintain investment in assets [12][13] Other Important Information - The company ended the year with over $400 million in liquidity, positioning it to weather the current downturn [5][25] - The company expects adjusted EBITDA to be approximately break-even for the first quarter of 2026 due to operational disruptions and higher costs from severe weather [20] Q&A Session Summary Question: Insights on grade switching from CRB to SBS - Management acknowledged that customers are exploring grade switching due to cost pressures, but noted that it is still in early stages [31][32] Question: Confidence in demand improvement - Management expressed optimism based on customer feedback and signs of growth, despite previous challenges in 2025 [34][36] Question: Plans for extended curtailments - Management indicated that no specific decisions have been made yet regarding extended curtailments, but they are evaluating options [37][38] Question: Supply management and potential closures - Management stated that they are considering further cost reductions and evaluating long-term decisions regarding underutilized capacity [42][43] Question: Liquidity and share buybacks - Management confirmed that maintaining a strong balance sheet is a priority, and share repurchases will be considered when free cash flows improve [44]

Forward Looking Statements Fourth Quarter Earnings Release Materials February 18, 2026 ARSEN KITCH President, Chief Executive Officer and Director SHERRI BAKER Senior Vice President and Chief Financial Officer Cautionary Statement Regarding Forward Looking Statements This presentation of supplemental information contains, in addition to historical information, certain "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities E ...

Financial Performance & Outlook - Clearwater reported Net Sales from continuing operations of $399 million in Q3 2025, a 3% increase compared to Q3 2024 and a 6% increase compared to Q2 2025[10] - The company experienced a Net Loss from continuing operations of $54 million in Q3 2025, which includes a non-cash goodwill impairment of $45 million[10, 11] - Adjusted EBITDA from continuing operations was $178 million with a margin of 4%, towards the higher end of the guidance range[10, 11] - Q4 2025 Adjusted EBITDA is projected to be between $13 million and $23 million, influenced by seasonality and a major maintenance outage at the Augusta, GA mill costing approximately $16 million[15] - For FY 2026, revenue is projected to be $145 billion to $155 billion, with a capacity utilization rate in the mid-80% range[15] Strategic Initiatives & Industry Trends - The company is targeting Adjusted EBITDA margins of 13% to 14% across the paperboard industry cycle, aiming for a 40-50% Adjusted EBITDA to free cash flow conversion rate, or over $100 million per year[5] - Clearwater is focused on reducing its fixed cost structure by $30 million to $40 million in 2025, with current tracking suggesting savings of approximately $50 million[5] - The company is exploring options to expand its product offering, including post-consumer recycled content, compostable plates, lightweight folding carton, poly-free coatings/barriers, unbleached paperboard grade (CUK), and recycled paperboard grade (CRB)[7] - Industry trends indicate a modest shipment growth expected in 2025 and a demand growth of approximately 3% projected for 2026[8] - Bleached paperboard net exports are expected to improve in 2025, with imports forecasted to decrease by approximately 4% and exports forecasted to decrease by approximately 2% compared to 2024[8]

Financial Performance & Targets - Clearwater reported Net Sales from continuing operations of $391.8 million in Q2 2025[10, 21] - Net income from continuing operations was $4 million[10] - Adjusted EBITDA from continuing operations reached $40 million with a 10% margin[10] - The company is targeting Adjusted EBITDA margins of 13% to 14% across the cycle, with a 40-50% Adjusted EBITDA to free cash flow conversion rate, or $100M+ per year[5] - Q3 2025 Adjusted EBITDA is projected to be $10 to $20 million[14] Market Trends & Outlook - Industry SBS shipments decreased by 3% in Q2 2025 compared to Q1 2025, while unmade SBS orders increased by 14%[8] - Demand growth of approximately 3% is projected for 2026[8] - Imports are forecasted to decrease by approximately 4% in 2025 compared to 2024, and exports are forecasted to decrease by approximately 2%[8] - Industry operating rates were at 83% in Q2 2025, down from 84% in Q2 2024[9] - The company assumes capacity utilization at approximately 85% for FY 2025, with revenue between $1.5 to $1.6 billion[14] Strategic Initiatives & Capital Allocation - Clearwater is focused on reducing its fixed cost structure by $30-40 million in 2025, with 10% reductions in positions[5] - The company repurchased $4 million of shares in Q2 2025, and $18 million since the new $100 million authorization in November 2024[11] - Capital expenditures are expected to be $80-90 million, including large project carryover spend[14] - The target leverage ratio is 1-2x[16]

Company Overview - Clearwater Paper's 2023 sales reached $2.1 billion[13, 27], with adjusted EBITDA of $281 million[13, 27] - The company operates through two segments: Paperboard (51% of sales, 58% of adjusted EBITDA) and Consumer Products (49% of sales, 42% of adjusted EBITDA) in 2023[13] - Clearwater Paper reduced net debt by $89 million in 2023 and $450 million since 2020[27] Paperboard Segment - The Paperboard segment's net sales were $1.064 billion in 2023[38], with an adjusted EBITDA margin of 19%[38] - The company has 840,000 tons of SBS (solid bleached sulfate) paperboard capacity[38] and holds a 15% market share[38] - Industry-wide SBS shipments decreased by 15.5%, and production decreased by 13.7% in 2023[53] Consumer Products Segment - The Consumer Products segment's net sales were $1.023 billion in 2023[65], with an adjusted EBITDA margin of 15%[65] - The company has 390,000 tons of annual paper capacity[65] and holds a 6% US market share[65] - Private brand share is at approximately 36% of at-home demand[67, 72] Augusta Acquisition - Clearwater Paper intends to acquire the Augusta manufacturing facility for $700 million[60] - The Augusta facility has approximately 600,000 tons of capacity[57, 60], projected to be 70-80% utilized in 2024[60] - The acquisition is expected to increase Clearwater Paper's paperboard capacity by approximately 70% to 1.4 million tons[60]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $30 million for Q1 2025, at the high end of guidance, driven by strong operational performance and increased production and sales volumes, primarily due to the Augusta acquisition [5][22] - Net sales increased by 46% to $378 million compared to Q1 2024, largely attributed to the Augusta acquisition [5][22] - The company experienced a net loss of approximately $6 million from continuing operations, equating to $0.36 per diluted share [22] Business Line Data and Key Metrics Changes - The integration of the Augusta mill is ongoing, with targeted volume and cost synergies expected by the end of 2026 [6] - The company reduced its fixed cost structure by eliminating over 200 positions, representing around 10% of total roles, aiming for $30 to $40 million in savings for 2025 [6][17] Market Data and Key Metrics Changes - Industry shipments increased by 2% in Q1 2025 compared to Q1 2024, with demand projected to grow by 3% to 5% in 2025 [7][8] - Industry utilization rates improved to 88% in Q1 2025 from 84% in Q1 2024, although still below the cross-cycle average of 90% to 95% [9] Company Strategy and Development Direction - The company aims to strengthen its position as a premier independent supplier of paperboard packaging products, focusing on product development in compostable food service products, lightweight folding cartons, and alternative poly-free barrier technologies [12][16] - The company is exploring expansion into additional paperboard substrates, which represent approximately 50% of the paperboard market outside of SBS [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about medium to long-term industry prospects, expecting strong margins and cash flows through the cycle [32] - The company anticipates a continued demand recovery, with internal utilization projected at around 85% and revenue expectations of approximately $1.5 to $1.6 billion for 2025 [26][29] Other Important Information - The company repurchased approximately $11 million of its shares in Q1 2025, totaling about $15 million since the new $100 million share buyback authorization [6][25] - The company is targeting $30 to $40 million in fixed cost reductions for 2025, with expected annual run rate savings of $40 to $50 million [16][28] Q&A Session Summary Question: What is the current status of FPB imports and exposure to tariffs? - Management noted that imports were up in 2024, with forecasts for a 5% decrease in imports and a 1% increase in exports for 2025, suggesting potential benefits from local supply dynamics due to tariffs [38][39] Question: Can you explain the shift in paperboard sales mix and outlook for Q2? - The shift in sales mix was primarily due to the inclusion of Augusta, with expectations for volume growth in Q2 [42][43] Question: What criteria will the company use for evaluating M&A opportunities? - The company will look for strategic fit, quality assets, and the ability to win in the market when considering M&A [46] Question: What are the expected cost savings and synergies from Augusta? - The company expects to see roughly double the amount of cost savings in Q2 compared to Q1, with significant volume synergies already being realized from the Augusta integration [50][51]