SPOKANE, Wash.--(BUSINESS WIRE)--
Clearwater Paper Corporation (NYSE:CLW) today reported financial
results for the third quarter of 2017.
The company reported net sales of $426.5 million for the third quarter
of 2017, down 2.0% compared to net sales of $435.3 million for the third
quarter of 2016. Net earnings determined in accordance with generally
accepted accounting principles, or GAAP, for the third quarter of 2017
were $0.9 million, or $0.05 per diluted share, comparable to net
earnings for the third quarter of 2016 of $0.9 million, or $0.05 per
diluted share, as a $2.4 million tax benefit from Federal tax credits in
the third quarter of 2017 more than offset a pre-tax loss of $2.2
million for the quarter. Excluding certain non-core items identified in
the attached Reconciliation of Non-GAAP Financial Measures, third
quarter 2017 adjusted net earnings were $5.3 million, or $0.32 per
diluted share, compared to third quarter 2016 adjusted net earnings of
$2.4 million, or $0.14 per diluted share.
Earnings before interest, taxes, depreciation and amortization, or
EBITDA, were $31.3 million for the third quarter of 2017 compared to
$32.0 million for the third quarter of 2016. Adjusted EBITDA for the
quarter was $37.6 million, up 9.7% compared to third quarter 2016
Adjusted EBITDA of $34.3 million. The $3.3 million increase in Adjusted
EBITDA in the third quarter of 2017 was primarily a result of lower
general maintenance costs as well as lower wage and benefits expense
resulting from warehouse automation projects at several of the company's
facilities, the shutdown of two higher cost tissue machines at the
company's Neenah, Wisconsin mill and the closure of the company's
Oklahoma City facility. These were partially offset by higher input
costs for pulp and transportation.
"During the quarter, we continued to focus on our long-term strategic
plan to improve operating efficiencies and reduce expenses, resulting in
the completion of two major strategic initiatives as part of a
three-year strategic plan," said Linda K. Massman, president and chief
executive officer. "As previously announced, our third quarter results
were impacted by higher than expected pulp prices, major maintenance
repair costs, and transportation rates due to inclement weather caused
by hurricanes in the Southeast. To further enhance our competitive
positioning, we have retained a strategic consultant, A.T. Kearney. We
believe this is an important step toward optimizing our cost structure
and we look forward to providing you with future updates," said Massman.
THIRD QUARTER 2017 SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $232.9 million for the
third quarter of 2017, down 8.1% compared to third quarter 2016 net
sales of $253.3 million. This decrease was due primarily to lower parent
roll sales resulting from the shutdown of two higher cost paper machines
at the Neenah, Wisconsin mill at the end of 2016 and a 5.7% decrease in
retail tons sold in the third quarter of 2017.
Consumer Products had operating income of $4.4 million in the third
quarter of 2017, compared to operating income of $17.2 million in the
third quarter of 2016. After adjusting for certain non-core items
identified in the attached Reconciliation of Non-GAAP Financial
Measures, adjusted operating income of $10.2 million for the third
quarter of 2017 was down from $15.9 million in the same period in 2016.
Consumer Products operating margin decreased to 1.9% in the third
quarter of 2017 from 6.8% in the third quarter of 2016. Adjusted
operating margin and Adjusted EBITDA for the segment decreased from 6.3%
and $30.9 million, respectively, in the third quarter of 2016 to 4.4%
and $25.9 million in the third quarter of 2017, due to higher input
costs for pulp, transportation due to weather related events, and
packaging supplies. These items were partially offset by lower wage and
benefit costs resulting from the implementation of warehouse automation
and the previously mentioned tissue machine shutdowns at the Neenah mill
and closure of the Oklahoma City facility, as well as lower maintenance
costs.
Tissue Sales Volumes and Prices:
• Total tissue sales volumes of 90,502 tons in the third quarter of 2017
decreased by 10.0% and converted product cases shipped were 12.7
million, down 7.6%, each compared to the third quarter of 2016.
• Average tissue net selling prices increased 2.3% to $2,574 per ton in
the third quarter of 2017, compared to the third quarter of 2016, due to
improved product mix.
Pulp and Paperboard
Net sales in the Pulp and Paperboard segment were $193.6 million for the
third quarter of 2017, up 6.4% compared to third quarter 2016 net sales
of $182.0 million. The increase was primarily due to higher paperboard
prices and shipment volume, including sales from the operations of the
former Manchester Industries acquired in December 2016. Operating income
for the third quarter of 2017 increased $5.0 million to $15.0 million,
compared to the third quarter of 2016. EBITDA for the segment was $23.4
million in the third quarter of 2017, compared to $16.5 million in the
third quarter of 2016. These increases were primarily due to lower costs
for wood fiber, energy and maintenance, partially offset by higher
weather related transportation costs for the third quarter of 2017.
Paperboard Sales Volumes and Prices:
• Paperboard sales volumes increased 2.2% to 200,569 tons in the third
quarter of 2017, compared to 196,271 tons in the third quarter of 2016.
• Paperboard net selling prices increased 4.1% to $965 per ton compared
to the third quarter of 2016.
Taxes
The company's consolidated GAAP tax rate and adjusted tax rate for the
third quarter of 2017 were benefits of 138.7% and 17.9%, respectively,
compared to provisions of 48.8% and 41.4%, respectively, in the third
quarter of 2016. On a GAAP basis, the benefit for the third quarter of
2017 was primarily driven by the pre-tax loss for the quarter, which was
increased by the Federal tax credits discussed previously. The company
expects its GAAP and adjusted tax rate for 2017 to be approximately 30%,
down from the mid-point of the company's outlook of 34% at the end of
the second quarter, primarily due to additional Federal tax credits.
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 2017 and 2016, including adjusted
net earnings, adjusted net earnings per diluted share, EBITDA, adjusted
EBITDA, adjusted operating income, adjusted operating margin, adjusted
income tax provision and adjusted tax rate. Because these amounts are
not in accordance with GAAP, reconciliations to net earnings, net
earnings per diluted share, operating income, income tax provision and
tax rate 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.
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
partnerships 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 the company's long-term
strategic plan, operational efficiency projects, cost management and
expected tax rate for 2017. 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 the competitive
pricing pressures for the company's products, including as a result of
increased capacity as additional manufacturing facilities are operated
by the company's competitors; the loss of or changes in prices in
regards to a significant customer; the company's ability to successfully
implement its operational efficiencies and cost savings strategies; the
company's ability to execute on its growth and expansion strategies;
unanticipated construction delays involving the company's planned new
tissue manufacturing operations in Shelby, NC; 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 produced at the company's recently announced Shelby facility
expansion when it becomes operational; changes in the U.S. and
international economies and in general economic conditions in the
regions and industries in which the company operates; changes in
customer product preferences and competitors' product offerings;
manufacturing or operating disruptions, including IT system and IT
system implementation failures, equipment malfunction and damage to the
company's manufacturing facilities; changes in transportation costs and
disruptions in transportation services; changes in the cost and
availability of wood fiber and wood pulp; labor disruptions; cyclical
industry conditions; changes in costs for and availability of packaging
supplies, chemicals, energy and maintenance and repairs; environmental
liabilities or expenditures; the company's ability to realize the
expected benefits of its Manchester Industries acquisition; changes in
expenses and required contributions associated with the company's
pension plans; cyber-security risks; reliance on a limited number of
third-party suppliers for raw materials; the company's inability to
service its debt obligations; restrictions on the company's business
from debt covenants and terms; 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, 2016. 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.
|
|
|
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,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Net sales
|
|
|
$
|
426,504
|
|
100
|
%
|
|
|
$
|
435,320
|
|
100
|
%
|
|
|
$
|
1,293,692
|
|
100
|
%
|
|
|
$
|
1,309,195
|
|
100
|
%
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
(386,581
|
)
|
91
|
%
|
|
|
(396,605
|
)
|
91
|
%
|
|
|
(1,154,344
|
)
|
89
|
%
|
|
|
(1,127,103
|
)
|
86
|
%
|
|
Selling, general and administrative expenses
|
|
|
(34,472
|
)
|
8
|
%
|
|
|
(29,435
|
)
|
7
|
%
|
|
|
(93,674
|
)
|
7
|
%
|
|
|
(94,885
|
)
|
7
|
%
|
|
Total operating costs and expenses
|
|
|
(421,053
|
)
|
99
|
%
|
|
|
(426,040
|
)
|
98
|
%
|
|
|
(1,248,018
|
)
|
96
|
%
|
|
|
(1,221,988
|
)
|
93
|
%
|
|
Income from operations
|
|
|
5,451
|
|
1
|
%
|
|
|
9,280
|
|
2
|
%
|
|
|
45,674
|
|
4
|
%
|
|
|
87,207
|
|
7
|
%
|
|
Interest expense, net
|
|
|
(7,683
|
)
|
2
|
%
|
|
|
(7,520
|
)
|
2
|
%
|
|
|
(23,399
|
)
|
2
|
%
|
|
|
(22,559
|
)
|
2
|
%
|
|
(Loss) earnings before income taxes
|
|
|
(2,232
|
)
|
1
|
%
|
|
|
1,760
|
|
—
|
%
|
|
|
22,275
|
|
2
|
%
|
|
|
64,648
|
|
5
|
%
|
|
Income tax benefit (provision)
|
|
|
3,095
|
|
1
|
%
|
|
|
(859
|
)
|
—
|
%
|
|
|
(5,860
|
)
|
—
|
%
|
|
|
(24,437
|
)
|
2
|
%
|
|
Net earnings
|
|
|
$
|
863
|
|
—
|
%
|
|
|
$
|
901
|
|
—
|
%
|
|
|
$
|
16,415
|
|
1
|
%
|
|
|
$
|
40,211
|
|
3
|
%
|
|
Net earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.05
|
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
1.00
|
|
|
|
|
$
|
2.35
|
|
|
|
Diluted
|
|
|
0.05
|
|
|
|
|
0.05
|
|
|
|
|
0.99
|
|
|
|
|
2.33
|
|
|
|
Average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
16,458
|
|
|
|
|
16,845
|
|
|
|
|
16,466
|
|
|
|
|
17,141
|
|
|
|
Diluted
|
|
|
16,567
|
|
|
|
|
17,060
|
|
|
|
|
16,573
|
|
|
|
|
17,253
|
|
|
|
|
|
|
|
Clearwater Paper Corporation |
|
Condensed Consolidated Balance Sheets
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
8,478
|
|
|
|
$
|
23,001
|
|
|
Receivables, net
|
|
|
135,946
|
|
|
|
147,074
|
|
|
Taxes receivable
|
|
|
14,578
|
|
|
|
9,709
|
|
|
Inventories
|
|
|
257,833
|
|
|
|
258,029
|
|
|
Other current assets
|
|
|
6,450
|
|
|
|
8,682
|
|
|
Total current assets
|
|
|
423,285
|
|
|
|
446,495
|
|
|
Property, plant and equipment, net
|
|
|
1,014,835
|
|
|
|
945,328
|
|
|
Goodwill |
|
|
244,283
|
|
|
|
244,283
|
|
|
Intangible assets, net
|
|
|
34,528
|
|
|
|
40,485
|
|
|
Other assets, net
|
|
|
12,080
|
|
|
|
7,751
|
|
|
TOTAL ASSETS
|
|
|
$
|
1,729,011
|
|
|
|
$
|
1,684,342
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Borrowings under revolving credit facilities
|
|
|
$
|
110,000
|
|
|
|
$
|
135,000
|
|
|
Accounts payable and accrued liabilities
|
|
|
263,148
|
|
|
|
223,699
|
|
|
Current liability for pensions and other postretirement employee
benefits
|
|
|
7,821
|
|
|
|
7,821
|
|
|
Total current liabilities
|
|
|
380,969
|
|
|
|
366,520
|
|
|
Long-term debt
|
|
|
570,331
|
|
|
|
569,755
|
|
|
Liability for pensions and other postretirement employee benefits
|
|
|
78,440
|
|
|
|
81,812
|
|
|
Other long-term obligations
|
|
|
40,942
|
|
|
|
41,776
|
|
|
Accrued taxes
|
|
|
2,557
|
|
|
|
2,434
|
|
|
Deferred tax liabilities
|
|
|
169,410
|
|
|
|
152,172
|
|
|
TOTAL LIABILITIES
|
|
|
1,242,649
|
|
|
|
1,214,469
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity, excluding accumulated other comprehensive
loss, net of tax
|
|
|
537,331
|
|
|
|
521,626
|
|
|
Accumulated other comprehensive loss, net of tax
|
|
|
(50,969
|
)
|
|
|
(51,753
|
)
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
$
|
1,729,011
|
|
|
|
$
|
1,684,342
|
|
|
|
|
|
|
Clearwater Paper Corporation |
|
Consolidated Statements of Cash Flows
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
16,415
|
|
|
|
$
|
40,211
|
|
|
Adjustments to reconcile net earnings to net cash flows from
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
79,468
|
|
|
|
65,921
|
|
|
Equity-based compensation expense
|
|
|
2,523
|
|
|
|
9,826
|
|
|
Deferred tax provision
|
|
|
14,602
|
|
|
|
12,329
|
|
|
Employee benefit plans
|
|
|
(2,999
|
)
|
|
|
(500
|
)
|
|
Disposal of plant and equipment, net
|
|
|
3,755
|
|
|
|
30
|
|
|
Other, net
|
|
|
874
|
|
|
|
484
|
|
|
Changes in working capital, net
|
|
|
43,846
|
|
|
|
4,045
|
|
|
Changes in taxes receivable, net
|
|
|
(4,869
|
)
|
|
|
7,217
|
|
|
Other, net
|
|
|
(1,439
|
)
|
|
|
(680
|
)
|
|
Net cash flows from operating activities
|
|
|
152,176
|
|
|
|
138,883
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
(136,650
|
)
|
|
|
(105,514
|
)
|
|
Other, net
|
|
|
753
|
|
|
|
250
|
|
|
Net cash flows from investing activities
|
|
|
(135,897
|
)
|
|
|
(105,264
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
|
(4,875
|
)
|
|
|
(51,528
|
)
|
|
Borrowings on revolving credit facilities
|
|
|
185,000
|
|
|
|
944,844
|
|
|
Repayments of borrowings on revolving credit facilities
|
|
|
(210,000
|
)
|
|
|
(931,832
|
)
|
|
Other, net
|
|
|
(927
|
)
|
|
|
(382
|
)
|
|
Net cash flows from financing activities
|
|
|
(30,802
|
)
|
|
|
(38,898
|
)
|
|
Decrease in cash and cash equivalents
|
|
|
(14,523
|
)
|
|
|
(5,279
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
23,001
|
|
|
|
5,610
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
8,478
|
|
|
|
$
|
331
|
|
|
|
|
|
|
Clearwater Paper Corporation |
|
Segment Information
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Segment net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Products
|
|
|
$
|
232,916
|
|
55
|
%
|
|
|
$
|
253,319
|
|
58
|
%
|
|
|
$
|
707,251
|
|
55
|
%
|
|
|
$
|
746,249
|
|
57
|
%
|
|
Pulp and Paperboard
|
|
|
193,588
|
|
45
|
%
|
|
|
182,001
|
|
42
|
%
|
|
|
586,441
|
|
45
|
%
|
|
|
562,946
|
|
43
|
%
|
|
Total segment net sales
|
|
|
$
|
426,504
|
|
100
|
%
|
|
|
$
|
435,320
|
|
100
|
%
|
|
|
$
|
1,293,692
|
|
100
|
%
|
|
|
$
|
1,309,195
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Products1 |
|
|
$
|
4,436
|
|
81
|
%
|
|
|
$
|
17,201
|
|
185
|
%
|
|
|
$
|
21,159
|
|
46
|
%
|
|
|
$
|
54,135
|
|
62
|
%
|
|
Pulp and Paperboard
|
|
|
15,023
|
|
276
|
%
|
|
|
9,956
|
|
107
|
%
|
|
|
63,866
|
|
140
|
%
|
|
|
85,151
|
|
98
|
%
|
|
|
|
|
19,459
|
|
|
|
|
27,157
|
|
|
|
|
85,025
|
|
|
|
|
139,286
|
|
|
|
Corporate2 |
|
|
(14,008
|
)
|
257
|
%
|
|
|
(17,877
|
)
|
193
|
%
|
|
|
(39,351
|
)
|
86
|
%
|
|
|
(52,079
|
)
|
60
|
%
|
|
Income from operations
|
|
|
$
|
5,451
|
|
100
|
%
|
|
|
$
|
9,280
|
|
100
|
%
|
|
|
$
|
45,674
|
|
100
|
%
|
|
|
$
|
87,207
|
|
100
|
%
|
|
|
|
|
|
|
|
1 |
|
Consumer Products operating income for the three and nine months
ended September 30, 2017 includes $5.1 and $11.1 million,
respectively, of costs associated with the closure of the Oklahoma
City facility. These costs for the three and nine months ended
September 30, 2017 include $4.3 million of loss on the writedown
of assets to their held for sale value.
|
|
2 |
|
Corporate expenses for the nine months ended September 30, 2017
include $0.2 million of expenses associated with the acquisition
of Manchester Industries. Operating results subsequent to the
acquisition of Manchester Industries are included in the Pulp and
Paperboard segment.
|
|
|
|
|
|
|
|
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,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net earnings
|
|
|
$
|
863
|
|
|
|
$
|
901
|
|
|
|
$
|
16,415
|
|
|
|
$
|
40,211
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
7,683
|
|
|
|
7,520
|
|
|
|
23,399
|
|
|
|
22,559
|
|
|
Income tax (benefit) provision
|
|
|
(3,095
|
)
|
|
|
859
|
|
|
|
5,860
|
|
|
|
24,437
|
|
|
Depreciation and amortization expense3 |
|
|
25,856
|
|
|
|
22,747
|
|
|
|
79,468
|
|
|
|
65,921
|
|
|
EBITDA1 |
|
|
$
|
31,307
|
|
|
|
$
|
32,027
|
|
|
|
$
|
125,142
|
|
|
|
$
|
153,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors' equity-based compensation expense (benefit)
|
|
|
$
|
463
|
|
|
|
$
|
89
|
|
|
|
$
|
(2,470
|
)
|
|
|
$
|
4,425
|
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
220
|
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure4 |
|
|
5,057
|
|
|
|
—
|
|
|
|
7,406
|
|
|
|
—
|
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
3,482
|
|
|
|
—
|
|
|
|
3,482
|
|
|
Reorganization related expenses
|
|
|
480
|
|
|
|
—
|
|
|
|
480
|
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
314
|
|
|
|
466
|
|
|
|
1,145
|
|
|
|
1,431
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
|
—
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
Adjusted EBITDA2 |
|
|
$
|
37,621
|
|
|
|
$
|
34,309
|
|
|
|
$
|
131,964
|
|
|
|
$
|
160,711
|
|
|
|
|
|
|
|
|
|
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
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 we do not believe are indicative of our core operating
performance.
|
|
3 |
|
|
Depreciation and amortization expense for the three months ended
September 30, 2017 includes accelerated depreciation of $0.3 million
associated with the closed Long Island facility and $0.1 million as
a result of the warehouse automation project. In addition,
depreciation and amortization for the nine months ended September
30, 2017 includes $3.7 million of accelerated depreciation
associated with the Oklahoma City facility closure, $0.6 million
associated with the Long Island facility and $0.4 million as a
result of the warehouse automation project.
|
|
4 |
|
|
Costs associated with the Oklahoma City facility closure for both
the three and nine months ended September 30, 2017 include $4.3
million of loss on the writedown of assets to their held for sale
value.
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
GAAP net earnings
|
|
|
$
|
863
|
|
|
|
$
|
901
|
|
|
|
$
|
16,415
|
|
|
|
$
|
40,211
|
|
|
Adjustments, after-tax1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors' equity-based compensation expense (benefit)
|
|
|
306
|
|
|
|
57
|
|
|
|
(1,639
|
)
|
|
|
2,857
|
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
2,240
|
|
|
|
—
|
|
|
|
2,240
|
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
146
|
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure
|
|
|
3,338
|
|
|
|
—
|
|
|
|
7,307
|
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
402
|
|
|
|
300
|
|
|
|
1,150
|
|
|
|
922
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
(1,129
|
)
|
|
|
—
|
|
|
|
(1,129
|
)
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
27
|
|
|
|
—
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
|
79
|
|
|
|
—
|
|
|
|
240
|
|
|
|
—
|
|
|
Reorganization related expenses
|
|
|
317
|
|
|
|
—
|
|
|
|
317
|
|
|
|
—
|
|
|
Adjusted net earnings2 |
|
|
$
|
5,305
|
|
|
|
$
|
2,369
|
|
|
|
$
|
23,963
|
|
|
|
$
|
45,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings per diluted share
|
|
|
$
|
0.05
|
|
|
|
$
|
0.05
|
|
|
|
$
|
0.99
|
|
|
|
$
|
2.33
|
|
|
Adjustments, after-tax1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors' equity-based compensation expense (benefit)
|
|
|
0.02
|
|
|
|
—
|
|
|
|
(0.10
|
)
|
|
|
0.17
|
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
0.13
|
|
|
|
—
|
|
|
|
0.13
|
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure
|
|
|
0.20
|
|
|
|
—
|
|
|
|
0.44
|
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.07
|
|
|
|
0.05
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
(0.07
|
)
|
|
|
—
|
|
|
|
(0.07
|
)
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
|
Reorganization related expenses
|
|
|
0.02
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
|
Adjusted net earnings per diluted share2 |
|
|
$
|
0.32
|
|
|
|
$
|
0.14
|
|
|
|
$
|
1.45
|
|
|
|
$
|
2.61
|
|
|
|
|
|
|
|
|
|
1 |
|
|
Tax effect was calculated using the estimated annual effective tax
rate for the period presented.
|
|
2 |
|
|
Adjusted net earnings and Adjusted net earnings per
diluted share exclude the impact of the items listed that we
do not believe are indicative of our 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,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Consumer Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
232,916
|
|
|
|
$
|
253,319
|
|
|
|
$
|
707,251
|
|
|
|
$
|
746,249
|
|
|
Operating income
|
|
|
4,436
|
|
|
|
17,201
|
|
|
|
21,159
|
|
|
|
54,135
|
|
|
Depreciation and amortization expense5 |
|
|
16,073
|
|
|
|
15,022
|
|
|
|
50,607
|
|
|
|
42,984
|
|
|
Consumer Products EBITDA1 |
|
|
$
|
20,509
|
|
|
|
$
|
32,223
|
|
|
|
$
|
71,766
|
|
|
|
$
|
97,119
|
|
|
Costs associated with Long Island facility closure
|
|
|
314
|
|
|
|
466
|
|
|
|
1,145
|
|
|
|
1,431
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
Costs associated with Oklahoma City facility closure6 |
|
|
5,057
|
|
|
|
—
|
|
|
|
7,406
|
|
|
|
—
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
|
—
|
|
|
Consumer Products Adjusted EBITDA2 |
|
|
$
|
25,880
|
|
|
|
$
|
30,934
|
|
|
|
$
|
80,358
|
|
|
|
$
|
96,795
|
|
|
Consumer Products EBITDA margin3 |
|
|
8.8
|
%
|
|
|
12.7
|
%
|
|
|
10.1
|
%
|
|
|
13.0
|
%
|
|
Consumer Products Adjusted EBITDA margin4 |
|
|
11.1
|
%
|
|
|
12.2
|
%
|
|
|
11.4
|
%
|
|
|
13.0
|
%
|
|
Pulp and Paperboard7:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
193,588
|
|
|
|
$
|
182,001
|
|
|
|
$
|
586,441
|
|
|
|
$
|
562,946
|
|
|
Operating income
|
|
|
15,023
|
|
|
|
9,956
|
|
|
|
63,866
|
|
|
|
85,151
|
|
|
Depreciation and amortization expense
|
|
|
8,328
|
|
|
|
6,530
|
|
|
|
24,789
|
|
|
|
19,346
|
|
|
Pulp and Paperboard EBITDA1 |
|
|
$
|
23,351
|
|
|
|
$
|
16,486
|
|
|
|
$
|
88,655
|
|
|
|
$
|
104,497
|
|
|
Pulp and Paperboard EBITDA margin3 |
|
|
12.1
|
%
|
|
|
9.1
|
%
|
|
|
15.1
|
%
|
|
|
18.6
|
%
|
|
|
|
|
|
1 |
|
|
Segment EBITDA is segment operating income adjusted for
depreciation and amortization.
|
|
2 |
|
|
Segment Adjusted EBITDA excludes the impact of the items
listed that we do not believe are indicative of our 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.
|
|
5 |
|
|
Depreciation and amortization expense for the Consumer Products
segment for the three months ended September 30, 2017 includes
accelerated depreciation of $0.3 million associated with the
closed Long Island facility and $0.1 million as a result of the
warehouse automation project. Depreciation and amortization
expense for the nine months ended September 30, 2017 includes $3.7
million of accelerated depreciation associated with the Oklahoma
City facility closure, $0.6 million associated with the Long
Island facility and $0.4 million as a result of the warehouse
automation project.
|
|
6 |
|
|
Costs associated with the Oklahoma City facility closure for both
the three and nine months ended September 30, 2017 include $4.3
million of loss on the writedown of assets to their held for sale
value.
|
|
7 |
|
|
With the exception of $0.2 million of acquisition related expenses
that are included in the Corporate segment for the nine months ended
September 30, 2017, results for Manchester Industries subsequent to
the December 16, 2016 acquisition are included in the Pulp and
Paperboard segment.
|
|
|
|
|
|
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,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Consumer Products:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
232,916
|
|
|
|
$
|
253,319
|
|
|
|
$
|
707,251
|
|
|
|
$
|
746,249
|
|
|
Operating income
|
|
|
4,436
|
|
|
|
17,201
|
|
|
|
21,159
|
|
|
|
54,135
|
|
|
Costs associated with Long Island facility closure3 |
|
|
610
|
|
|
|
466
|
|
|
|
1,736
|
|
|
|
1,431
|
|
|
Costs associated with Oklahoma City facility closure4 |
|
|
5,057
|
|
|
|
—
|
|
|
|
11,069
|
|
|
|
—
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
|
—
|
|
|
Gain associated with sale of the specialty mills, net
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
|
120
|
|
|
|
—
|
|
|
|
361
|
|
|
|
—
|
|
|
Consumer Products Adjusted operating income1 |
|
|
$
|
10,223
|
|
|
|
$
|
15,912
|
|
|
|
$
|
34,366
|
|
|
|
$
|
53,811
|
|
|
Consumer Products operating margin
|
|
|
1.9
|
%
|
|
|
6.8
|
%
|
|
|
3.0
|
%
|
|
|
7.3
|
%
|
|
Consumer Products Adjusted operating margin2 |
|
|
4.4
|
%
|
|
|
6.3
|
%
|
|
|
4.9
|
%
|
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pulp and Paperboard5:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
193,588
|
|
|
|
$
|
182,001
|
|
|
|
$
|
586,441
|
|
|
|
$
|
562,946
|
|
|
Operating income
|
|
|
15,023
|
|
|
|
9,956
|
|
|
|
63,866
|
|
|
|
85,151
|
|
|
Pulp and Paperboard operating income
|
|
|
$
|
15,023
|
|
|
|
$
|
9,956
|
|
|
|
$
|
63,866
|
|
|
|
$
|
85,151
|
|
|
Pulp and Paperboard operating margin
|
|
|
7.8
|
%
|
|
|
5.5
|
%
|
|
|
10.9
|
%
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
1 |
|
|
Segment Adjusted operating income excludes the impact of
the items listed that we do not believe are indicative of our core
operating performance.
|
|
2 |
|
|
Segment Adjusted operating margin is defined as Segment
Adjusted operating income divided by Segment Net sales.
|
|
3 |
|
|
Costs associated with the Long Island facility closure include $0.3
million and $0.6 million of accelerated depreciation for the three
and nine months ended September 30, 2017, respectively.
|
|
4 |
|
|
Costs associated with the Oklahoma City facility closure for both
the three and nine months ended September 30, 2017 include $4.3
million of loss on the writedown of assets to their held for sale
value, as well as $3.7 million of accelerated depreciation for the
nine months ended September 30, 2017.
|
|
5 |
|
|
With the exception of $0.2 million of acquisition related expenses
that are included in the Corporate segment for the nine months ended
September 30, 2017, results for Manchester Industries subsequent to
the December 16, 2016 acquisition are included in the Pulp and
Paperboard segment.
|
|
|
|
|
|
|
|
|
Clearwater Paper Corporation |
|
Reconciliation of Non-GAAP Financial Measures
|
|
Adjusted Income Tax Provision
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
GAAP income tax benefit (provision)
|
|
|
$
|
3,095
|
|
|
|
$
|
(859
|
)
|
|
|
$
|
(5,860
|
)
|
|
|
$
|
(24,437
|
)
|
|
Adjustments, tax impact:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors' equity-based compensation (expense) benefit
|
|
|
(157
|
)
|
|
|
(32
|
)
|
|
|
831
|
|
|
|
(1,568
|
)
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
(1,242
|
)
|
|
|
—
|
|
|
|
(1,242
|
)
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
(74
|
)
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure
|
|
|
(1,719
|
)
|
|
|
—
|
|
|
|
(3,762
|
)
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
(208
|
)
|
|
|
(166
|
)
|
|
|
(586
|
)
|
|
|
(509
|
)
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
626
|
|
|
|
—
|
|
|
|
626
|
|
|
Reorganization related expenses
|
|
|
(163
|
)
|
|
|
—
|
|
|
|
(163
|
)
|
|
|
—
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
(14
|
)
|
|
|
—
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
|
(41
|
)
|
|
|
—
|
|
|
|
(121
|
)
|
|
|
—
|
|
|
Adjusted income tax benefit (provision)1 |
|
|
$
|
807
|
|
|
|
$
|
(1,673
|
)
|
|
|
$
|
(9,749
|
)
|
|
|
$
|
(27,130
|
)
|
|
Adjusted income tax rate1,2 |
|
|
17.9
|
%
|
|
|
41.4
|
%
|
|
|
28.9
|
%
|
|
|
37.5
|
%
|
|
|
|
|
|
|
|
|
1 |
|
|
Adjusted income tax benefit (provision) and Adjusted
income tax rate exclude the impact of the items listed that we
do not believe are indicative of our core operating performance.
|
|
2 |
|
|
The Adjusted income tax rate is defined as [Adjusted income
tax provision / (Adjusted income tax provision + Adjusted net
earnings)].
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171019006284/en/
Clearwater Paper Corporation
(News media)
Matt Van Vleet,
509.344.5912
or
(Investors)
Robin S. Yim, 509.344.5906
Source: Clearwater Paper Corporation
News Provided by Acquire Media