Oct 24, 2019

Clearwater Paper Reports Third Quarter 2019 Results

SPOKANE, Wash.--(BUSINESS WIRE)--Oct. 24, 2019-- Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the third quarter of 2019.

The company reported net sales of $445.2 million for the third quarter of 2019, which were $18.7 million or 4.4% higher than net sales of $426.5 million for the third quarter of 2018. The increase was due to higher net paperboard and tissue pricing from previously announced price changes and higher retail tissue shipments. These items were partially offset by lower non-retail tissue shipments primarily resulting from the sale of the company's mill in Ladysmith, Wisconsin in August 2018.

Net loss determined in accordance with generally accepted accounting principles, or GAAP, for the third quarter of 2019 was $11.0 million, or $0.66 per diluted share, compared to net earnings for the third quarter of 2018 of $34.4 million, or $2.08 per diluted share. The decrease in net earnings was due to planned major maintenance at the company's Lewiston, Idaho mill, higher input costs for pulp and wood fiber and increased depreciation and interest expense. Excluding certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, third quarter 2019 adjusted net loss was $8.3 million, or $0.50 per diluted share, compared to third quarter 2018 adjusted net earnings of $22.3 million, or $1.35 per diluted share.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, were $28.1 million for the third quarter of 2019, compared to $71.0 million for the third quarter of 2018. Adjusted EBITDA for the quarter was $30.9 million, compared to third quarter 2018 Adjusted EBITDA of $50.1 million. The decrease was due to the planned major maintenance at the Idaho mill in the third quarter of 2019.

“Compared to our outlook, we performed well during the third quarter, with continued strong pulp and paperboard production and higher retail tissue shipments, which enabled us to achieve solid results,” said Linda Massman, president and chief executive officer. “We successfully completed the major maintenance outage at our Lewiston, Idaho mill and determined we will move into 2020 with no planned major maintenance outages. Our new Shelby, North Carolina facility is meeting all customer quality expectations on ultra and premium grades and we are currently meeting our targeted production volume. We are also happy to report that tissue sales have increased 8% year over year. Our long-term focus remains on improving our operational capabilities to ensure we are well-positioned to generate cash flow to de-lever our balance sheet.”

THIRD QUARTER 2019 SEGMENT PERFORMANCE

Consumer Products

Net sales in the Consumer Products segment were $228.5 million for the third quarter of 2019, up 8.0% compared to third quarter 2018 net sales of $211.6 million. This increase was due to higher retail tissue volumes sold, higher average prices for both retail and non-retail tissue products and a favorable mix shift to a higher percentage of retail shipments, partially offset by the impact from the divestiture of the Ladysmith, Wisconsin mill in August 2018. In the third quarter of 2019, converted case shipments reached 13.2 million cases, an increase of 11.6% compared to 11.8 million cases shipped in the third quarter of 2018, due to growth in business with both new and existing customers.

Segment operating loss for the third quarter of 2019 was $4.4 million, compared to operating income of $21.7 million in the third quarter of 2018. After adjusting for certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, adjusted operating loss was $4.4 million for the third quarter of 2019, compared to an adjusted operating loss of $1.0 million for the same period in 2018. The increased operating loss was primarily due to higher internal pulp costs due to planned major maintenance at the Idaho mill and higher depreciation expense resulting from the completion of the Shelby mill expansion. Adjusted EBITDA for the segment was $14.6 million in the third quarter of 2019, up from $13.4 million in the third quarter of 2018. The increase was primarily due to improved retail shipment volumes, pricing and mix, partially offset by higher maintenance costs and lower non-retail tissue shipments resulting from the divestiture of the Ladysmith mill.

Tissue Sales Volumes and Prices:

  • Total tissue volumes sold were 86,408 tons in the third quarter of 2019, a decrease of 2,452 tons or 2.8% compared to 88,860 tons in the third quarter of 2018. Retail volumes represented 92% of total volumes sold in the third quarter of 2019, up from 79% in the third quarter of 2018. Converted product cases shipped increased 11.6% to 13.2 million in the third quarter of 2019, compared to the 11.8 million cases shipped in the third quarter of 2018.
  • Average tissue net selling prices increased 10.7% to $2,635 per ton in the third quarter of 2019, compared to $2,381 per ton in the third quarter of 2018. The increase was due to a significant reduction in parent roll sales resulting from the divestiture of the Ladysmith mill, previously announced price increases and a higher mix of ultra-quality tissue products.

Pulp and Paperboard

Net sales in the Pulp and Paperboard segment were $216.6 million for the third quarter of 2019, up 0.9% compared to third quarter 2018 net sales of $214.8 million. The increase was due to higher paperboard prices from previously announced increases, partially offset by lower sales volume.

Segment operating income and margin for the third quarter of 2019 were $17.1 million and 7.9%, compared to $38.3 million and 17.8%, respectively, for the third quarter of 2018. Adjusted EBITDA for the segment was $28.3 million in the third quarter of 2019, compared to $47.7 million in the third quarter of 2018. The decrease in operating income and adjusted EBITDA was primarily due to planned major maintenance at the company's Idaho mill, partially offset by higher paperboard prices.

Paperboard Sales Volumes and Prices:

  • Paperboard sales volumes were 214,537 tons in the third quarter of 2019, a decrease of 1.6% compared to 218,135 tons in the third quarter of 2018.
  • Paperboard average net selling price increased 1.9% to $1,004 per ton for the third quarter of 2019, compared to $985 per ton in the third quarter of 2018.

Taxes

The company's consolidated GAAP tax rate for the third quarter of 2019 was a benefit of 44.3%, compared to a provision of 9.6% in the third quarter of 2018. The tax benefit in the current quarter resulted from the pre-tax loss for the quarter.

Note Regarding Use of Non-GAAP Financial Measures

In this press release, the company presents certain non-GAAP financial information for the third quarters of 2019 and 2018, including adjusted net earnings (loss), adjusted net earnings (loss) per diluted share, EBITDA, adjusted EBITDA, adjusted operating income (loss) and adjusted operating margin. Because these amounts are not in accordance with GAAP, reconciliations to net earnings (loss), net earnings (loss) per diluted share and operating income (loss) as determined in accordance with GAAP are included in the tables at the end of this press release. The company presents these non-GAAP amounts because management believes they assist investors and analysts in comparing the company's performance across reporting periods on a consistent basis by excluding items that the company does not believe are indicative of its core operating performance. In addition, the company uses EBITDA and Adjusted EBITDA: (i) as factors in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the effectiveness of the company's business strategies, and (iii) because the company's credit agreement and the indentures governing the company's outstanding notes use metrics similar to EBITDA to measure the company's compliance with certain covenants.

WEBCAST INFORMATION

Clearwater Paper Corporation will discuss these results during an earnings conference call that begins at 2:00 p.m. Pacific Time today. A live webcast and accompanying supplemental information will be available on the company's website at http://ir.clearwaterpaper.com. A replay of today's conference call will be available on the website at http://ir.clearwaterpaper.com/results.cfm beginning at 5:00 p.m. Pacific Time today.

ABOUT CLEARWATER PAPER

Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, parent roll tissue, bleached paperboard and pulp at manufacturing facilities across the nation. The company is a premier supplier of private label tissue to major retailers and wholesale distributors, including grocery, drug, mass merchants and discount stores. In addition, the company produces bleached paperboard used by quality-conscious printers and packaging converters, and offers services that include custom sheeting, slitting and cutting. Clearwater Paper's employees build shareholder value by developing strong customer relationships through quality and service.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding managing and completing the company's Shelby, North Carolina facility expansion, planned major maintenance outages, customer quality expectations, production volume, operational and financial execution, cash flow and debt reduction. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: competitive pricing pressures for products, including as a result of increased capacity as additional manufacturing facilities are operated by the company’s competitors; the loss of, changes in prices in regard to, or reduction in, orders from a significant customer; changes in customer product preferences and competitors' product offerings; the company’s ability to achieve full production at its new tissue manufacturing operations in Shelby, North Carolina on time and within current cost expectations; customer acceptance and timing and quantity of purchases of the company’s tissue products, including the existence of sufficient demand for and the quality of tissue manufactured at its expanded Shelby, North Carolina operations upon full production; consolidation and vertical integration of converting operations in the paperboard industry; the company’s ability to successfully implement its operational efficiencies and cost savings strategies, along with related capital projects, and achieve the expected operational or financial results of those projects, including from the continuous pulp digester at its Lewiston, Idaho facility; changes in the cost and availability of wood fiber and wood pulp; changes in transportation costs and disruptions in transportation services; labor disruptions; changes in the U.S. and international economies and in general economic conditions in the regions and industries in which the company operates; manufacturing or operating disruptions, including IT system and IT system implementation failures, equipment malfunctions and damage to the company’s manufacturing facilities; changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs; larger competitors having operational and other advantages; cyclical industry conditions; changes in expenses, required contributions and potential withdrawal costs associated with the company’s pension plans; environmental liabilities or expenditures; cyber-security risks; reliance on a limited number of third-party suppliers for raw materials; the company’s ability to attract, motivate, train and retain qualified and key personnel; material weaknesses in the company's internal controls over financial reporting; the company’s substantial indebtedness and ability to service its debt obligations; restrictions on the company’s business from debt covenants and terms; and changes in laws, regulations or industry standards affecting the company’s business; and other risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2018. The forward-looking statements are made as of the date of this press release and the company does not undertake to update any forward-looking statements based on new developments or changes in the company's expectations after the date of this press release.

Clearwater Paper Corporation

Consolidated Statements of Operations

Unaudited (Dollars in thousands - except per-share amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net sales

 

$

 

445,188

 

100

%

 

$

 

426,460

 

100

%

 

$

 

1,325,960

 

100

%

 

$

 

1,295,511

 

100

%

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

(418,704

)

94

%

 

 

(376,221

)

88

%

 

 

(1,212,775

)

91

%

 

 

(1,155,808

)

89

%

Selling, general and administrative expenses

 

 

(28,944

)

7

%

 

 

(26,283

)

6

%

 

 

(85,942

)

6

%

 

 

(85,827

)

7

%

Gain on divested assets, net

 

 

%

 

 

22,944

 

5

%

 

 

%

 

 

22,944

 

2

%

Total operating costs and expenses

 

 

(447,648

)

101

%

 

 

(379,560

)

89

%

 

 

(1,298,717

)

98

%

 

 

(1,218,691

)

94

%

(Loss) income from operations

 

 

(2,460

)

1

%

 

 

46,900

 

11

%

 

 

27,243

 

2

%

 

 

76,820

 

6

%

Interest expense, net

 

 

(13,077

)

3

%

 

 

(7,547

)

2

%

 

 

(32,477

)

2

%

 

 

(23,290

)

2

%

Debt retirement costs

 

 

(2,725

)

1

%

 

 

%

 

 

(2,725

)

%

 

 

%

Non-operating pension and other postretirement benefit costs

 

 

(1,421

)

%

 

 

(1,234

)

%

 

 

(4,266

)

%

 

 

(3,700

)

%

(Loss) earnings before income taxes

 

 

(19,683

)

4

%

 

 

38,119

 

9

%

 

 

(12,225

)

1

%

 

 

49,830

 

4

%

Income tax benefit (provision)

 

 

8,710

 

2

%

 

 

(3,675

)

1

%

 

 

4,665

 

%

 

 

(5,825

)

%

Net (loss) earnings

 

$

 

(10,973

)

2

%

 

$

 

34,444

 

8

%

 

$

 

(7,560

)

1

%

 

$

 

44,005

 

3

%

Net (loss) earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

(0.66

)

 

 

$

 

2.09

 

 

 

$

 

(0.46

)

 

 

$

 

2.67

 

 

Diluted

 

 

(0.66

)

 

 

 

2.08

 

 

 

 

(0.46

)

 

 

 

2.66

 

 

Average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

16,539

 

 

 

 

16,487

 

 

 

 

16,531

 

 

 

 

16,493

 

 

Diluted

 

 

16,539

 

 

 

 

16,564

 

 

 

 

16,531

 

 

 

 

16,573

 

 

Clearwater Paper Corporation

Condensed Consolidated Balance Sheets

Unaudited (Dollars in thousands)

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

2019

 

2018

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

 

7,815

 

 

$

 

22,484

 

Restricted cash

 

 

1,440

 

 

 

Receivables, net

 

 

157,929

 

 

 

145,519

 

Taxes receivable

 

 

6,721

 

 

 

6,301

 

Inventories

 

 

282,395

 

 

 

266,244

 

Other current assets

 

 

7,960

 

 

 

3,399

 

Total current assets

 

 

464,260

 

 

 

443,947

 

Property, plant and equipment, net

 

 

1,273,474

 

 

 

1,269,271

 

Operating lease right-of-use assets

 

 

74,503

 

 

 

Goodwill

 

 

35,074

 

 

 

35,074

 

Intangible assets, net

 

 

18,725

 

 

 

24,080

 

Other assets, net

 

 

15,041

 

 

 

15,746

 

TOTAL ASSETS

 

$

 

1,881,077

 

 

$

 

1,788,118

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Short-term debt

 

$

 

58,000

 

 

$

 

120,833

 

Accounts payable and accrued liabilities

 

 

229,563

 

 

 

321,032

 

Current liability for pension and other postretirement employee benefits

 

 

7,430

 

 

 

7,430

 

Total current liabilities

 

 

294,993

 

 

 

449,295

 

Long-term debt

 

 

866,702

 

 

 

671,292

 

Operating lease liabilities

 

 

66,571

 

 

 

Liability for pension and other postretirement employee benefits

 

 

73,738

 

 

 

78,191

 

Other long-term obligations

 

 

33,990

 

 

 

38,977

 

Accrued taxes

 

 

3,070

 

 

 

2,785

 

Deferred tax liabilities

 

 

116,868

 

 

 

121,182

 

TOTAL LIABILITIES

 

 

1,455,932

 

 

 

1,361,722

 

 

 

 

 

 

Stockholders' equity

 

 

425,145

 

 

 

426,396

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

 

1,881,077

 

 

$

 

1,788,118

 

 

Clearwater Paper Corporation

Consolidated Statements of Cash Flows

Unaudited (Dollars in thousands)

 

 

 

 

 

Nine Months Ended

 

 

September 30,

 

 

2019

 

2018

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net (loss) earnings

 

$

 

(7,560

)

 

$

 

44,005

 

Adjustments to reconcile net (loss) earnings to net cash flows from operating activities:

 

 

 

 

Depreciation and amortization

 

 

86,343

 

 

 

75,686

 

Equity-based compensation expense

 

 

2,959

 

 

 

2,845

 

Deferred taxes

 

 

(6,023

)

 

 

3,930

 

Employee benefit plans

 

 

1,006

 

 

 

102

 

Amortization of deferred issuance costs on debt

 

 

1,452

 

 

 

943

 

Loss on retirement of debt

 

 

2,725

 

 

 

Gain on divested assets

 

 

 

 

(25,510

)

Other non-cash activity, net

 

 

724

 

 

 

84

 

Changes in working capital, net

 

 

(98,266

)

 

 

7,402

 

Changes in taxes receivable

 

 

(420

)

 

 

13,534

 

Other, net

 

 

825

 

 

 

(1,922

)

Net cash flows from operating activities

 

 

(16,235

)

 

 

121,099

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Additions to property, plant and equipment

 

 

(125,794

)

 

 

(174,034

)

Net proceeds from divested assets

 

 

 

 

70,930

 

Other, net

 

 

14

 

 

 

807

 

Net cash flows from investing activities

 

 

(125,780

)

 

 

(102,297

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Borrowings from long-term debt

 

 

296,146

 

 

 

Repayment of borrowings on long-term debt

 

 

(101,671

)

 

 

Borrowings on short-term debt

 

 

534,877

 

 

 

322,454

 

Repayments of borrowings on short-term debt

 

 

(598,715

)

 

 

(277,454

)

Payments for debt issuance costs

 

 

(1,844

)

 

 

Other, net

 

 

(1,430

)

 

 

(853

)

Net cash flows from financing activities

 

 

127,363

 

 

 

44,147

 

(Decrease) increase in cash, cash equivalents and restricted cash

 

 

(14,652

)

 

 

62,949

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

24,947

 

 

 

16,738

 

Cash, cash equivalents and restricted cash at end of period

 

$

 

10,295

 

 

$

 

79,687

 

 

Clearwater Paper Corporation

Segment Information

Unaudited (Dollars in thousands)

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

 

2018

 

Segment net sales:

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Products

 

$

 

228,544

 

51

%

 

$

 

211,642

 

50

%

 

$

 

676,220

 

51

%

 

$

 

672,069

 

52

%

Pulp and Paperboard

 

 

216,644

 

49

%

 

 

214,818

 

50

%

 

 

649,740

 

49

%

 

 

623,442

 

48

%

Total segment net sales

 

$

 

445,188

 

100

%

 

$

 

426,460

 

100

%

 

$

 

1,325,960

 

100

%

 

$

 

1,295,511

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Products

 

$

 

(4,438

)

180

%

 

$

 

(1,269

)

3

%

 

$

 

(8,300

)

30

%

 

$

 

(3,244

)

4

%

Gain on divested assets

 

 

%

 

 

22,944

 

49

%

 

 

%

 

 

22,944

 

30

%

Pulp and Paperboard

 

 

17,098

 

695

%

 

 

38,280

 

82

%

 

 

80,073

 

294

%

 

 

98,626

 

128

%

 

 

 

12,660

 

 

 

 

59,955

 

 

 

 

71,773

 

 

 

 

118,326

 

 

Corporate

 

 

(15,120

)

615

%

 

 

(13,055

)

28

%

 

 

(44,530

)

163

%

 

 

(41,506

)

54

%

(Loss) income from operations

 

$

 

(2,460

)

100

%

 

$

 

46,900

 

100

%

 

$

 

27,243

 

100

%

 

$

 

76,820

 

100

%

 

Clearwater Paper Corporation

Reconciliation of Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA

Unaudited (Dollars in thousands)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Net (loss) earnings

 

$

 

(10,973

)

 

$

 

34,444

 

 

$

 

(7,560

)

 

$

 

44,005

 

Add back:

 

 

 

 

 

 

 

 

Interest expense, net3

 

 

15,802

 

 

 

7,547

 

 

 

35,202

 

 

 

23,290

 

Income tax (benefit) provision

 

 

(8,710

)

 

 

3,675

 

 

 

(4,665

)

 

 

5,825

 

Depreciation and amortization expense

 

 

31,990

 

 

 

25,342

 

 

 

86,343

 

 

 

75,686

 

EBITDA1

 

 

28,109

 

 

 

71,008

 

 

 

109,320

 

 

 

148,806

 

 

 

 

 

 

 

 

 

 

Directors' equity-based compensation expense (benefit)

 

 

420

 

 

 

769

 

 

 

101

 

 

 

(1,930

)

Non-operating pension and other postretirement benefit costs4

 

 

1,421

 

 

 

1,234

 

 

 

4,266

 

 

 

3,700

 

Reorganization related expenses

 

 

934

 

 

 

158

 

 

 

986

 

 

 

950

 

Gain on divested assets, net

 

 

 

 

(22,944

)

 

 

 

 

(22,944

)

Reorganization related expenses associated with SG&A cost control measures

 

 

 

 

210

 

 

 

 

 

6,390

 

Other

 

 

 

 

(338

)

 

 

 

 

Adjusted EBITDA2

 

$

 

30,884

 

 

$

 

50,097

 

 

$

 

114,673

 

 

$

 

134,972

 

1

 

EBITDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. The most directly comparable GAAP measure is net earnings. EBITDA is net (loss) earnings adjusted for net interest expense (including debt retirement costs), income taxes and depreciation and amortization. It should not be considered as an alternative to net earnings computed under GAAP.

2

 

Adjusted EBITDA excludes the impact of the items listed that the company does not believe are indicative of its core operating performance.

3

 

Interest expense, net for the three and nine months ended September 30, 2019 includes debt retirement costs of $2.7 million.

4

 

In 2018, the Company adopted Accounting Standards Update 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires all net periodic pension and postretirement costs other than service cost to be presented on a line outside of operating income. Beginning in the first quarter of 2019, the Company is excluding these non-operating costs from the calculation of Adjusted EBITDA. The corresponding prior period amounts have been reclassified to conform with the current period presentation.

 

Clearwater Paper Corporation

Reconciliation of Non-GAAP Financial Measures

Adjusted Net Earnings and Adjusted Net Earnings Per Diluted Common Share

Unaudited (Dollars in thousands, except per-share amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

GAAP net (loss) earnings

 

$

 

(10,973

)

 

$

 

34,444

 

 

$

 

(7,560

)

 

$

 

44,005

 

Adjustments, after-tax1:

 

 

 

 

 

 

 

 

Debt retirement costs

 

 

1,791

 

 

 

 

 

1,791

 

 

 

Directors' equity-based compensation expense (benefit)

 

 

276

 

 

 

524

 

 

 

(40

)

 

 

(1,480

)

Reorganization related expenses

 

 

614

 

 

 

108

 

 

 

635

 

 

 

694

 

Gain on divested assets, net

 

 

 

 

(12,680

)

 

 

 

 

(12,680

)

Reorganization related expenses associated with SG&A cost control measures

 

 

 

 

143

 

 

 

 

 

4,767

 

Other

 

 

 

 

(250

)

 

 

 

 

Impact of state tax rate changes

 

 

 

 

 

 

 

 

(676

)

Adjusted net (loss) earnings2

 

$

 

(8,292

)

 

$

 

22,289

 

 

$

 

(5,174

)

 

$

 

34,630

 

 

 

 

 

 

 

 

 

 

GAAP net (loss) earnings per diluted share

 

$

 

(0.66

)

 

$

 

2.08

 

 

$

 

(0.46

)

 

$

 

2.66

 

Adjustments, after-tax1:

 

 

 

 

 

 

 

 

Debt retirement costs

 

 

0.11

 

 

 

 

 

0.11

 

 

 

Directors' equity-based compensation expense (benefit)

 

 

0.01

 

 

 

0.03

 

 

 

 

 

(0.09

)

Reorganization related expenses

 

 

0.04

 

 

 

0.01

 

 

 

0.04

 

 

 

0.04

 

Gain on divested assets, net

 

 

 

 

(0.76

)

 

 

 

 

(0.78

)

Reorganization related expenses associated with SG&A cost control measures

 

 

 

 

0.01

 

 

 

 

 

0.29

 

Other

 

 

 

 

(0.02

)

 

 

 

 

Impact of state tax rate changes

 

 

 

 

 

 

 

 

(0.04

)

Adjusted net (loss) earnings per diluted share2

 

$

 

(0.50

)

 

$

 

1.35

 

 

$

 

(0.31

)

 

$

 

2.09

 

1

 

Tax effect was calculated using the estimated annual effective tax rate for the period presented.

2

 

Adjusted net (loss) earnings and Adjusted net (loss) earnings per diluted share exclude the impact of the items listed that the company does not believe are indicative of its core operating performance.

 

Clearwater Paper Corporation

Reconciliation of Non-GAAP Financial Measures

Segment EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin

Unaudited (Dollars in thousands)

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Consumer Products:

 

 

 

 

 

 

 

 

Net sales

 

$

 

228,544

 

 

$

 

211,642

 

 

$

 

676,220

 

 

$

 

672,069

 

Operating (loss) income

 

 

(4,438

)

 

 

21,675

 

 

 

(8,300

)

 

 

19,700

 

Depreciation and amortization expense

 

 

19,025

 

 

 

14,447

 

 

 

51,227

 

 

 

42,964

 

Consumer Products EBITDA1

 

$

 

14,587

 

 

$

 

36,122

 

 

$

 

42,927

 

 

$

 

62,664

 

Gain on divested assets, net

 

 

 

 

(22,944

)

 

 

 

 

(22,944

)

Reorganization related expenses associated with SG&A cost control measures

 

 

 

 

87

 

 

 

 

 

1,746

 

Reorganization related expenses

 

 

 

 

158

 

 

 

 

 

950

 

Consumer Products Adjusted EBITDA2

 

$

 

14,587

 

 

$

 

13,423

 

 

$

 

42,927

 

 

$

 

42,416

 

Consumer Products EBITDA margin3

 

 

6.4

%

 

 

17.1

%

 

 

6.3

%

 

 

9.3

%

Consumer Products Adjusted EBITDA margin4

 

 

6.4

%

 

 

6.3

%

 

 

6.3

%

 

 

6.3

%

Pulp and Paperboard

 

 

 

 

 

 

 

 

Net sales

 

$

 

216,644

 

 

$

 

214,818

 

 

$

 

649,740

 

 

$

 

623,442

 

Operating income

 

 

17,098

 

 

 

38,280

 

 

 

80,073

 

 

 

98,626

 

Depreciation and amortization expense

 

 

11,168

 

 

 

9,316

 

 

 

30,144

 

 

 

28,106

 

Pulp and Paperboard EBITDA1

 

$

 

28,266

 

 

$

 

47,596

 

 

$

 

110,217

 

 

$

 

126,732

 

Reorganization related expenses associated with SG&A cost control measures

 

 

 

 

71

 

 

 

 

 

454

 

Pulp and Paperboard Adjusted EBITDA2

 

$

 

28,266

 

 

$

 

47,667

 

 

$

 

110,217

 

 

$

 

127,186

 

Pulp and Paperboard EBITDA margin3

 

 

13.0

%

 

 

22.2

%

 

 

17.0

%

 

 

20.3

%

Pulp and Paperboard Adjusted EBITDA margin4

 

 

13.0

%

 

 

22.2

%

 

 

17.0

%

 

 

20.4

%

1

 

Segment EBITDA is segment operating (loss) income adjusted for depreciation and amortization.

2

 

Segment Adjusted EBITDA excludes the impact of the items listed that the company does not believe are indicative of its core operating performance.

3

 

Segment EBITDA margin is defined as Segment EBITDA divided by Segment Net sales.

4

 

Segment Adjusted EBITDA margin is defined as Segment Adjusted EBITDA divided by Segment Net sales.

 

Clearwater Paper Corporation

Reconciliation of Non-GAAP Financial Measures

Segment Adjusted Operating Income and Operating Margin

Unaudited (Dollars in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Consumer Products:

 

 

 

 

 

 

 

 

Net sales

 

$

 

228,544

 

 

$

 

211,642

 

 

$

 

676,220

 

 

$

 

672,069

 

Operating (loss) income

 

$

 

(4,438

)

 

$

 

21,675

 

 

$

 

(8,300

)

 

$

 

19,700

 

Gain on divested assets, net

 

 

 

 

(22,944

)

 

 

 

 

(22,944

)

Reorganization related expenses associated with SG&A cost control measures

 

 

 

 

87

 

 

 

 

 

1,746

 

Reorganization related expenses

 

 

 

 

158

 

 

 

 

 

950

 

Consumer Products Adjusted operating loss1

 

$

 

(4,438

)

 

$

 

(1,024

)

 

$

 

(8,300

)

 

$

 

(548

)

Consumer Products operating margin

 

 

(1.9

)%

 

 

10.2

%

 

 

(1.2

)%

 

 

2.9

%

Consumer Products Adjusted operating margin2

 

 

(1.9

)%

 

 

(0.5

)%

 

 

(1.2

)%

 

 

(0.1

)%

 

 

 

 

 

 

 

 

 

Pulp and Paperboard:

 

 

 

 

 

 

 

 

Net sales

 

$

 

216,644

 

 

$

 

214,818

 

 

$

 

649,740

 

 

$

 

623,442

 

Operating income

 

$

 

17,098

 

 

$

 

38,280

 

 

$

 

80,073

 

 

$

 

98,626

 

Reorganization related expenses associated with SG&A cost control measures

 

 

 

 

71

 

 

 

 

 

454

 

Pulp and Paperboard Adjusted operating income1

 

$

 

17,098

 

 

$

 

38,351

 

 

$

 

80,073

 

 

$

 

99,080

 

Pulp and Paperboard operating margin

 

 

7.9

%

 

 

17.8

%

 

 

12.3

%

 

 

15.8

%

Pulp and Paperboard Adjusted operating margin2

 

 

7.9

%

 

 

17.9

%

 

 

12.3

%

 

 

15.9

%

1

 

Segment Adjusted operating (loss) income excludes the impact of the items listed that the company does not believe are indicative of its core operating performance.

2

 

Segment Adjusted operating margin is defined as Segment Adjusted operating (loss) income divided by Segment Net sales.

 

Source: Clearwater Paper Corporation

Clearwater Paper Corporation
(News media)
Shannon Myers
509.344.5967
or
(Investors)
Robin S. Yim
Vice President, Investor Relations
509.344.5906