SPOKANE, Wash.--(BUSINESS WIRE)--Feb. 5, 2018--
Clearwater Paper Corporation (NYSE:CLW) today reported financial
results for the fourth quarter and full year of 2017.
The company reported net sales of $436.7 million for the fourth quarter
of 2017, up 2.6% compared to net sales of $425.6 million for the fourth
quarter of 2016. Net earnings determined in accordance with generally
accepted accounting principles, or GAAP, for the fourth quarter of 2017
were $80.9 million, or $4.88 per diluted share, compared to net earnings
for the fourth quarter of 2016 of $9.3 million, or $0.56 per diluted
share. The increase in net earnings primarily consisted of a benefit
related to recent tax law changes. Excluding this tax benefit and
certain other non-core items identified in the attached Reconciliation
of Non-GAAP Financial Measures, fourth quarter 2017 adjusted net
earnings were $14.4 million, or $0.87 per diluted share, compared to
fourth quarter 2016 adjusted net earnings of $13.8 million, or $0.82 per
diluted share.
Earnings before interest, taxes, depreciation and amortization, or
EBITDA, were $52.2 million for the fourth quarter of 2017 compared to
$49.3 million for the fourth quarter of 2016. Adjusted EBITDA for the
quarter was $57.5 million, up 6.3% compared to fourth quarter 2016
Adjusted EBITDA of $54.1 million. The $3.4 million increase in Adjusted
EBITDA in the fourth quarter of 2017 was primarily a result of higher
paperboard pricing and volumes, improved consumer product mix, and lower
general maintenance costs. Additional factors for the increase included
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 at
the end of 2016 and the closure of the company's Oklahoma City
converting facility in March 2017. These factors were partially offset
by lower non-retail tissue shipment volumes and higher input costs for
pulp, transportation and energy.
"We had a strong finish to 2017 due to improved operating efficiencies
resulting from the completion of our three-year strategic capital
projects, including warehouse automation and the continuous pulp
digester at our Lewiston, Idaho mill,” said Linda K. Massman, president
and chief executive officer. "We also had increased paperboard sales and
shipments and ultra-quality tissue sales, partially offset by very
competitive market conditions in the retail industry and higher
transportation costs.
"Throughout 2018, we will remain focused on efforts to increase our
margins and ultimately cash flow to build a solid foundation for our
long-term success and create shareholder value," said Massman. "Our
efforts include the vital work of realigning portions of our company in
both tissue and paperboard, and investing in our business to meet
customer needs as reflected in the ongoing investment in our Shelby,
North Carolina facility."
FOURTH QUARTER2017SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $234.7 million for the
fourth quarter of 2017, down 3.1% compared to fourth quarter 2016 net
sales of $242.1 million. This decrease was due primarily to lower parent
roll sales resulting from the shutdown of the two higher cost paper
machines at the Neenah, Wisconsin mill at the end of 2016 and a 3.3%
decrease in retail tons sold in the fourth quarter of 2017.
Operating income and margin for the fourth quarter of 2017 decreased to
$7.5 million and 3.2%, compared to $13.8 million and 5.7%, respectively,
in the fourth quarter of 2016. After adjusting for certain non-core
items identified in the attached Reconciliation of Non-GAAP Financial
Measures, adjusted operating income and margin of $11.4 million and 4.9%
for the fourth quarter of 2017 were down from $17.0 million and 7.0% for
the same period in 2016. Adjusted EBITDA for the segment decreased from
$32.0 million in the fourth quarter of 2016 to $25.8 million in the
fourth quarter of 2017. These decreases were due to higher input costs
for external pulp, transportation and packaging supplies with partial
offsets from lower maintenance costs as well as lower labor costs due to
the implementation of warehouse automation and the previously mentioned
paper machine shutdowns at the Neenah mill and facility closure in
Oklahoma City.
Tissue Sales Volumes and Prices:
-
Total tissue sales volumes of 87,313 tons in the fourth quarter of
2017 decreased by 9.9% and converted product cases shipped were 12.7
million, down 1.7%, each compared to the fourth quarter of 2016.
-
Average tissue net selling prices increased 6.2% or $155 per ton in
the fourth quarter of 2017, compared to the fourth quarter of 2016,
due to improved product mix.
Pulp and Paperboard
Net sales in the Pulp and Paperboard segment were $202.1 million for the
fourth quarter of 2017, up 10.2% compared to fourth quarter 2016 net
sales of $183.4 million. The increase was primarily due to higher
paperboard prices and shipment volume, including sales from the
operations of Manchester Industries acquired in December 2016.
Operating income for the fourth quarter of 2017 increased $7.0 million
to $34.6 million, compared to operating income of $27.6 million for the
fourth quarter of 2016. Pulp and paperboard's operating margin increased
to 17.1% in the fourth quarter of 2017 from 15.0% in the fourth quarter
of 2016. Adjusted EBITDA for the segment was $44.5 million in the fourth
quarter of 2017, compared to $35.0 million in the fourth quarter of
2016. These increases were primarily due to lower costs for wood fiber,
lower maintenance costs at Arkansas, lower wage and benefits expense and
lower operating supply costs. These items were partially offset by
higher priced purchased pulp, higher electricity usage due to a turbine
generator outage and higher chemical and transportation costs.
Paperboard Sales Volumes and Prices:
-
Paperboard sales volumes increased 5.4% to 210,098 tons in the fourth
quarter of 2017, compared to 199,415 tons in the fourth quarter of
2016.
-
Paperboard net selling prices increased 4.6% to $962 per ton compared
to the fourth quarter of 2016.
Taxes
The company's consolidated GAAP tax rate and adjusted tax rate for the
fourth quarter of 2017 were a benefit of 333.2% and a provision of
39.9%, respectively, compared to provisions of 41.7% and 37.8%,
respectively, in the fourth quarter of 2016. On a GAAP basis, the
benefit for the fourth quarter of 2017 was primarily driven by a $70
million tax benefit resulting from the remeasurement of the company's
net deferred tax liabilities following passage of the Tax Cuts and Jobs
Act ("Act") signed into law on December 22, 2017. The company expects
its GAAP and adjusted tax rate for 2018 to be approximately 26%, due to
the reduced federal corporate income tax rate of 21% under the Act.
Given the significant changes resulting from and complexities associated
with the Act, the impact on the company's 2018 estimated effective and
adjusted tax rates is subject to further analysis, interpretation and
clarification of the Act, which could result in changes to these
estimates during 2018.
Note Regarding Use of Non-GAAP Financial Measures
In this press release, the company presents certain non-GAAP financial
information for the fourth 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, margins, cash flow, operational efficiency projects,
cost management, market conditions, customers, benefits of the company's
Shelby, NC facility, and expected tax rates for 2018. 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 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;
changes in customer product preferences and competitors' product
offerings; 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, including
on-time completion of the company's planned new tissue manufacturing and
converting operations in Shelby, N.C.; 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 by the expanded Shelby, N.C. operations when they are
completed; changes in the U.S. and international economies and in
general economic conditions in the regions and industries in which the
company operates; labor disruptions; changes in transportation costs and
disruptions in transportation services; changes in the cost and
availability of wood fiber and wood pulp; manufacturing or operating
disruptions, including IT system and IT system implementation failures,
equipment malfunction and damage to the company's manufacturing
facilities; changes in costs for and availability of packaging supplies,
chemicals, energy and maintenance and repairs; cyclical industry
conditions; changes in expenses and required contributions 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 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
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Net sales
|
|
|
$
|
436,716
|
|
100 |
% |
|
|
$
|
425,568
|
|
100 |
% |
|
|
$
|
1,730,408
|
|
100 |
% |
|
|
$
|
1,734,763
|
|
100 |
% |
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
(375,277
|
)
|
86 |
% |
|
|
(368,524
|
)
|
87 |
% |
|
|
(1,529,621
|
)
|
88 |
% |
|
|
(1,495,627
|
)
|
86 |
% |
|
Selling, general and administrative expenses
|
|
|
(34,785
|
)
|
8 |
% |
|
|
(32,934
|
)
|
8 |
% |
|
|
(128,459
|
)
|
7 |
% |
|
|
(127,819
|
)
|
7 |
% |
|
Total operating costs and expenses
|
|
|
(410,062
|
)
|
94 |
% |
|
|
(401,458
|
)
|
94 |
% |
|
|
(1,658,080
|
)
|
96 |
% |
|
|
(1,623,446
|
)
|
94 |
% |
|
Income from operations
|
|
|
26,654
|
|
6 |
% |
|
|
24,110
|
|
6 |
% |
|
|
72,328
|
|
4 |
% |
|
|
111,317
|
|
6 |
% |
|
Interest expense, net
|
|
|
(7,975
|
)
|
2 |
% |
|
|
(8,092
|
)
|
2 |
% |
|
|
(31,374
|
)
|
2 |
% |
|
|
(30,651
|
)
|
2 |
% |
|
Earnings before income taxes
|
|
|
18,679
|
|
4 |
% |
|
|
16,018
|
|
4 |
% |
|
|
40,954
|
|
2 |
% |
|
|
80,666
|
|
5 |
% |
|
Income tax benefit (provision)
|
|
|
62,245
|
|
14 |
% |
|
|
(6,675
|
)
|
2 |
% |
|
|
56,385
|
|
3 |
% |
|
|
(31,112
|
)
|
2 |
% |
|
Net earnings
|
|
|
$
|
80,924
|
|
19 |
% |
|
|
$
|
9,343
|
|
2 |
% |
|
|
$
|
97,339
|
|
6 |
% |
|
|
$
|
49,554
|
|
3 |
% |
|
Net earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
4.92
|
|
|
|
|
$
|
0.56
|
|
|
|
|
$
|
5.91
|
|
|
|
|
$
|
2.91
|
|
|
|
Diluted
|
|
|
4.88
|
|
|
|
|
0.56
|
|
|
|
|
5.88
|
|
|
|
|
2.90
|
|
|
|
Average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
16,458
|
|
|
|
|
16,578
|
|
|
|
|
16,464
|
|
|
|
|
17,001
|
|
|
|
Diluted
|
|
|
16,568
|
|
|
|
|
16,781
|
|
|
|
|
16,556
|
|
|
|
|
17,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clearwater Paper Corporation
|
|
Condensed Consolidated Balance Sheets
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
15,738
|
|
|
|
$
|
23,001
|
|
Receivables, net
|
|
|
142,065
|
|
|
|
147,074
|
|
Taxes receivable
|
|
|
20,282
|
|
|
|
9,709
|
|
Inventories
|
|
|
266,043
|
|
|
|
258,029
|
|
Other current assets
|
|
|
8,661
|
|
|
|
8,682
|
|
Total current assets
|
|
|
452,789
|
|
|
|
446,495
|
|
Property, plant and equipment, net
|
|
|
1,050,982
|
|
|
|
945,328
|
|
Goodwill
|
|
|
244,161
|
|
|
|
244,283
|
|
Intangible assets, net
|
|
|
32,542
|
|
|
|
40,485
|
|
Other assets, net
|
|
|
21,778
|
|
|
|
7,751
|
|
TOTAL ASSETS
|
|
|
$
|
1,802,252
|
|
|
|
$
|
1,684,342
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Borrowings under revolving credit facilities
|
|
|
$
|
155,000
|
|
|
|
$
|
135,000
|
|
Accounts payable and accrued liabilities
|
|
|
256,621
|
|
|
|
223,699
|
|
Current liability for pensions and other postretirement employee
benefits
|
|
|
7,631
|
|
|
|
7,821
|
|
Total current liabilities
|
|
|
419,252
|
|
|
|
366,520
|
|
Long-term debt
|
|
|
570,524
|
|
|
|
569,755
|
|
Liability for pensions and other postretirement employee benefits
|
|
|
72,469
|
|
|
|
81,812
|
|
Other long-term obligations
|
|
|
43,275
|
|
|
|
41,776
|
|
Accrued taxes
|
|
|
2,770
|
|
|
|
2,434
|
|
Deferred tax liabilities
|
|
|
118,528
|
|
|
|
152,172
|
|
TOTAL LIABILITIES
|
|
|
1,226,818
|
|
|
|
1,214,469
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
575,434
|
|
|
|
469,873
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
$
|
1,802,252
|
|
|
|
$
|
1,684,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clearwater Paper Corporation
|
|
Consolidated Statements of Cash Flows
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net earnings
|
|
|
$
|
97,339
|
|
|
|
$
|
49,554
|
|
|
Adjustments to reconcile net earnings to net cash flows from
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
104,990
|
|
|
|
91,090
|
|
|
Equity-based compensation expense
|
|
|
3,620
|
|
|
|
12,385
|
|
|
Deferred taxes
|
|
|
(40,589
|
)
|
|
|
18,327
|
|
|
Employee benefit plans
|
|
|
(4,371
|
)
|
|
|
(1,979
|
)
|
|
Deferred issuance costs on debt
|
|
|
1,199
|
|
|
|
1,242
|
|
|
Disposal of plant and equipment, net
|
|
|
4,053
|
|
|
|
1,381
|
|
|
Other non-cash activities
|
|
|
1,750
|
|
|
|
758
|
|
|
Changes in working capital, net of acquisition
|
|
|
21,761
|
|
|
|
(3,462
|
)
|
|
Changes in taxes receivable, net
|
|
|
(10,573
|
)
|
|
|
5,142
|
|
|
Other, net
|
|
|
(1,509
|
)
|
|
|
(1,687
|
)
|
|
Net cash flows from operating activities
|
|
|
177,670
|
|
|
|
172,751
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
(199,748
|
)
|
|
|
(155,349
|
)
|
|
Acquisition of Manchester Industries, net of cash acquired
|
|
|
—
|
|
|
|
(67,443
|
)
|
|
Other, net
|
|
|
951
|
|
|
|
286
|
|
|
Net cash flows from investing activities
|
|
|
(198,797
|
)
|
|
|
(222,506
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
|
(4,875
|
)
|
|
|
(65,327
|
)
|
|
Borrowings on revolving credit facilities
|
|
|
298,308
|
|
|
|
1,273,959
|
|
|
Repayments of borrowings on revolving credit facilities
|
|
|
(278,308
|
)
|
|
|
(1,138,959
|
)
|
|
Payments for debt issuance costs
|
|
|
—
|
|
|
|
(1,906
|
)
|
|
Payment of tax withholdings on equity-based payment arrangements
|
|
|
(1,127
|
)
|
|
|
(933
|
)
|
|
Other, net
|
|
|
(134
|
)
|
|
|
312
|
|
|
Net cash flows from financing activities
|
|
|
13,864
|
|
|
|
67,146
|
|
|
Decrease in cash and cash equivalents
|
|
|
(7,263
|
)
|
|
|
17,391
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
23,001
|
|
|
|
5,610
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
15,738
|
|
|
|
$
|
23,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clearwater Paper Corporation
|
|
Segment Information
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
Segment net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Products
|
|
|
$
|
234,656
|
|
54 |
% |
|
|
$
|
242,131
|
|
57 |
% |
|
|
$
|
941,907
|
|
54 |
% |
|
|
$
|
988,380
|
|
57 |
% |
|
Pulp and Paperboard
|
|
|
202,060
|
|
46 |
% |
|
|
183,437
|
|
43 |
% |
|
|
788,501
|
|
46 |
% |
|
|
746,383
|
|
43 |
% |
|
Total segment net sales
|
|
|
$
|
436,716
|
|
100 |
% |
|
|
$
|
425,568
|
|
100 |
% |
|
|
$
|
1,730,408
|
|
100 |
% |
|
|
$
|
1,734,763
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Products1 |
|
|
$
|
7,457
|
|
28 |
% |
|
|
$
|
13,781
|
|
57 |
% |
|
|
$
|
28,616
|
|
40 |
% |
|
|
$
|
67,916
|
|
61 |
% |
|
Pulp and Paperboard
|
|
|
34,642
|
|
130 |
% |
|
|
27,581
|
|
114 |
% |
|
|
98,508
|
|
136 |
% |
|
|
112,732
|
|
101 |
% |
|
|
|
42,099
|
|
|
|
|
41,362
|
|
|
|
|
127,124
|
|
|
|
|
180,648
|
|
|
|
Corporate2 |
|
|
(15,445
|
)
|
58 |
% |
|
|
(17,252
|
)
|
72 |
% |
|
|
(54,796
|
)
|
76 |
% |
|
|
(69,331
|
)
|
62 |
% |
|
Income from operations
|
|
|
$
|
26,654
|
|
100 |
% |
|
|
$
|
24,110
|
|
100 |
% |
|
|
$
|
72,328
|
|
100 |
% |
|
|
$
|
111,317
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1 |
|
|
Consumer Products operating income for the three and twelve months
ended December 31, 2017 includes $3.6 million and $14.7 million,
respectively, of costs associated with the closure of the Oklahoma
City facility. Consumer Products operating income for the three and
twelve months ended December 31, 2016 includes $1.7 million of costs
associated with the closure of the Oklahoma City facility.
|
| 2 |
|
|
Corporate expenses for the twelve months ended December 31, 2017
include $0.2 million of expenses associated with the December 2016
acquisition of Manchester Industries, as well as $2.7 million of
associated expenses for the three and twelve months ended December
31, 2016. Corporate expenses for the twelve months ended December
31, 2016 also include a $3.5 million settlement accounting charge
associated with a pension lump sum buyout for term-vested
participants.
|
|
|
|
Clearwater Paper Corporation
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
EBITDA and Adjusted EBITDA
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net earnings
|
|
|
$
|
80,924
|
|
|
|
$
|
9,343
|
|
|
|
$
|
97,339
|
|
|
|
$
|
49,554
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net3
|
|
|
7,975
|
|
|
|
8,092
|
|
|
|
31,374
|
|
|
|
30,651
|
|
|
Income tax (benefit) provision
|
|
|
(62,245
|
)
|
|
|
6,675
|
|
|
|
(56,385
|
)
|
|
|
31,112
|
|
|
Depreciation and amortization expense4 |
|
|
25,522
|
|
|
|
25,169
|
|
|
|
104,990
|
|
|
|
91,090
|
|
|
EBITDA1 |
|
|
$
|
52,176
|
|
|
|
$
|
49,279
|
|
|
|
$
|
177,318
|
|
|
|
$
|
202,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors' equity-based compensation (benefit) expense
|
|
|
$
|
(363
|
)
|
|
|
$
|
354
|
|
|
|
$
|
(2,833
|
)
|
|
|
$
|
4,779
|
|
|
Costs associated with Oklahoma City facility closure5 |
|
|
3,649
|
|
|
|
318
|
|
|
|
11,055
|
|
|
|
318
|
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
1,783
|
|
|
|
—
|
|
|
|
2,263
|
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
298
|
|
|
|
460
|
|
|
|
1,443
|
|
|
|
1,891
|
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
2,665
|
|
|
|
220
|
|
|
|
2,665
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
|
—
|
|
|
Costs associated with Neenah paper machines shutdown
|
|
|
—
|
|
|
|
1,049
|
|
|
|
—
|
|
|
|
1,049
|
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,482
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
Adjusted EBITDA2 |
|
|
$
|
57,543
|
|
|
|
$
|
54,125
|
|
|
|
$
|
189,507
|
|
|
|
$
|
214,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
|
Interest expense, net for the three and twelve months ended December
31, 2016 includes debt retirement costs of $0.4 million.
|
| 4 |
|
|
Depreciation and amortization expense for the twelve months ended
December 31, 2017 includes accelerated depreciation of $3.7 million
associated with the Oklahoma City facility closure, $0.6 million
associated with the closed Long Island facility and $0.4 million as
a result of the warehouse automation project. Depreciation and
amortization expense for the three and twelve months ended December
31, 2016 includes $1.3 million of accelerated depreciation
associated with the Oklahoma City facility closure.
|
| 5 |
|
|
Costs associated with the Oklahoma City facility closure for the
three and twelve months ended December 31, 2017 include $3.2
million of expenses associated with the execution of a sublease
for the facility. Costs associated with the Oklahoma City facility
closure for the twelve months ended December 31, 2017 also include
$4.3 million of loss on the write-down 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
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
GAAP net earnings
|
|
|
$
|
80,924
|
|
|
|
$
|
9,343
|
|
|
|
$
|
97,339
|
|
|
|
$
|
49,554
|
|
|
Adjustments, after-tax1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal tax rate change3 |
|
|
(70,055
|
)
|
|
|
—
|
|
|
|
(70,055
|
)
|
|
|
—
|
|
|
Directors' equity-based compensation (benefit) expense
|
|
|
(242
|
)
|
|
|
229
|
|
|
|
(1,881
|
)
|
|
|
3,086
|
|
|
Costs associated with Oklahoma City facility closure
|
|
|
2,434
|
|
|
|
1,073
|
|
|
|
9,741
|
|
|
|
1,073
|
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
1,189
|
|
|
|
—
|
|
|
|
1,506
|
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
199
|
|
|
|
297
|
|
|
|
1,349
|
|
|
|
1,219
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
240
|
|
|
|
—
|
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
2,200
|
|
|
|
146
|
|
|
|
2,200
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
27
|
|
|
|
—
|
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,240
|
|
|
Costs associated with Neenah paper machines shutdown
|
|
|
—
|
|
|
|
678
|
|
|
|
—
|
|
|
|
678
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,129
|
)
|
|
Adjusted net earnings2
|
|
|
$
|
14,449
|
|
|
|
$
|
13,820
|
|
|
|
$
|
38,412
|
|
|
|
$
|
58,921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings per diluted share
|
|
|
$
|
4.88
|
|
|
|
$
|
0.56
|
|
|
|
$
|
5.88
|
|
|
|
$
|
2.90
|
|
|
Adjustments, after-tax1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal tax rate change3 |
|
|
(4.23
|
)
|
|
|
—
|
|
|
|
(4.23
|
)
|
|
|
—
|
|
|
Directors' equity-based compensation (benefit) expense
|
|
|
(0.01
|
)
|
|
|
0.01
|
|
|
|
(0.11
|
)
|
|
|
0.18
|
|
|
Costs associated with Oklahoma City facility closure
|
|
|
0.15
|
|
|
|
0.06
|
|
|
|
0.59
|
|
|
|
0.06
|
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
0.07
|
|
|
|
—
|
|
|
|
0.09
|
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
0.08
|
|
|
|
0.07
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
0.13
|
|
|
|
0.01
|
|
|
|
0.13
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.13
|
|
|
Costs associated with Neenah paper machines shutdown
|
|
|
—
|
|
|
|
0.04
|
|
|
|
—
|
|
|
|
0.04
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.07
|
)
|
|
Adjusted net earnings per diluted share2 |
|
|
$
|
0.87
|
|
|
|
$
|
0.82
|
|
|
|
$
|
2.32
|
|
|
|
$
|
3.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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.
|
| 3 |
|
|
The federal tax rate change in 2017 is primarily due to the
remeasurement of deferred tax liabilities as a result of the Act
signed into law on December 22, 2017. The resulting net tax
benefit is excluded from our adjusted non-GAAP earnings.
|
|
|
|
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
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
| Consumer Products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
234,656
|
|
|
|
$
|
242,131
|
|
|
|
$
|
941,907
|
|
|
|
$
|
988,380
|
|
|
Operating income
|
|
|
7,457
|
|
|
|
13,781
|
|
|
|
28,616
|
|
|
|
67,916
|
|
|
Depreciation and amortization expense5 |
|
|
14,400
|
|
|
|
16,391
|
|
|
|
65,007
|
|
|
|
59,375
|
|
|
Consumer Products EBITDA1 |
|
|
$
|
21,857
|
|
|
|
$
|
30,172
|
|
|
|
$
|
93,623
|
|
|
|
$
|
127,291
|
|
|
Costs associated with Oklahoma City facility closure6 |
|
|
3,649
|
|
|
|
318
|
|
|
|
11,055
|
|
|
|
318
|
|
|
Costs associated with Long Island facility closure
|
|
|
298
|
|
|
|
460
|
|
|
|
1,443
|
|
|
|
1,891
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
|
—
|
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
20
|
|
|
|
—
|
|
|
|
20
|
|
|
|
—
|
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
Costs associated with Neenah paper machines shutdown
|
|
|
—
|
|
|
|
1,049
|
|
|
|
—
|
|
|
|
1,049
|
|
|
Consumer Products Adjusted EBITDA2 |
|
|
$
|
25,824
|
|
|
|
$
|
31,999
|
|
|
|
$
|
106,182
|
|
|
|
$
|
128,794
|
|
|
Consumer Products EBITDA margin3 |
|
|
9.3
|
%
|
|
|
12.5
|
%
|
|
|
9.9
|
%
|
|
|
12.9
|
%
|
|
Consumer Products Adjusted EBITDA margin4 |
|
|
11.0
|
%
|
|
|
13.2
|
%
|
|
|
11.3
|
%
|
|
|
13.0
|
%
|
| Pulp and Paperboard: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
202,060
|
|
|
|
$
|
183,437
|
|
|
|
$
|
788,501
|
|
|
|
$
|
746,383
|
|
|
Operating income
|
|
|
34,642
|
|
|
|
27,581
|
|
|
|
98,508
|
|
|
|
112,732
|
|
|
Depreciation and amortization expense
|
|
|
9,686
|
|
|
|
7,395
|
|
|
|
34,474
|
|
|
|
26,741
|
|
|
Pulp and Paperboard EBITDA1 |
|
|
$
|
44,328
|
|
|
|
$
|
34,976
|
|
|
|
$
|
132,982
|
|
|
|
$
|
139,473
|
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
132
|
|
|
|
—
|
|
|
|
132
|
|
|
|
—
|
|
|
Pulp and Paperboard Adjusted EBITDA2
|
|
|
$
|
44,460
|
|
|
|
$
|
34,976
|
|
|
|
$
|
133,114
|
|
|
|
$
|
139,473
|
|
|
Pulp and Paperboard EBITDA margin3 |
|
|
21.9
|
%
|
|
|
19.1
|
%
|
|
|
16.9
|
%
|
|
|
18.7
|
%
|
|
Pulp and Paperboard Adjusted EBITDA margin4 |
|
|
22.0
|
%
|
|
|
19.1
|
%
|
|
|
16.9
|
%
|
|
|
18.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 twelve months ended December 31, 2017 includes
accelerated depreciation of $3.7 million 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. Consumer Products depreciation and amortization
expense for the three and twelve months ended December 31, 2016
includes $1.3 million of accelerated depreciation associated with
the Oklahoma City facility closure.
|
| 6 |
|
|
Costs associated with the Oklahoma City facility closure for the
three and twelve months ended December 31, 2017 include $3.2
million of expenses associated with the execution of a sublease
for the facility. Costs associated with the Oklahoma City facility
closure for the twelve months ended December 31, 2017 also include
$4.3 million of loss on the write-down of assets to their held for
sale value.
|
|
|
|
Clearwater Paper Corporation
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
Segment Adjusted Operating Income and Operating Margin
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
| Consumer Products: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
234,656
|
|
|
|
$
|
242,131
|
|
|
|
$
|
941,907
|
|
|
|
$
|
988,380
|
|
|
Operating income
|
|
|
7,457
|
|
|
|
13,781
|
|
|
|
28,616
|
|
|
|
67,916
|
|
|
Costs associated with Long Island facility closure3 |
|
|
298
|
|
|
|
460
|
|
|
|
2,034
|
|
|
|
1,891
|
|
|
Costs associated with Oklahoma City facility closure4 |
|
|
3,649
|
|
|
|
1,662
|
|
|
|
14,718
|
|
|
|
1,662
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
361
|
|
|
|
—
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
|
—
|
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
20
|
|
|
|
—
|
|
|
|
20
|
|
|
|
—
|
|
|
Costs associated with Neenah paper machines shutdown
|
|
|
—
|
|
|
|
1,049
|
|
|
|
—
|
|
|
|
1,049
|
|
|
Gain associated with sale of the specialty mills, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,755
|
)
|
|
Consumer Products Adjusted operating income1 |
|
|
$
|
11,424
|
|
|
|
$
|
16,952
|
|
|
|
$
|
45,790
|
|
|
|
$
|
70,763
|
|
|
Consumer Products operating margin
|
|
|
3.2
|
%
|
|
|
5.7
|
%
|
|
|
3.0
|
%
|
|
|
6.9
|
%
|
|
Consumer Products Adjusted operating margin2 |
|
|
4.9
|
%
|
|
|
7.0
|
%
|
|
|
4.9
|
%
|
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pulp and Paperboard: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$
|
202,060
|
|
|
|
$
|
183,437
|
|
|
|
$
|
788,501
|
|
|
|
$
|
746,383
|
|
|
Operating income
|
|
|
34,642
|
|
|
|
27,581
|
|
|
|
98,508
|
|
|
|
112,732
|
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
132
|
|
|
|
—
|
|
|
|
132
|
|
|
|
—
|
|
|
Pulp and Paperboard Adjusted operating income
|
|
|
$
|
34,774
|
|
|
|
$
|
27,581
|
|
|
|
$
|
98,640
|
|
|
|
$
|
112,732
|
|
|
Pulp and Paperboard operating margin
|
|
|
17.1
|
%
|
|
|
15.0
|
%
|
|
|
12.5
|
%
|
|
|
15.1
|
%
|
|
Pulp and Paperboard Adjusted operating margin2 |
|
|
17.2
|
%
|
|
|
15.0
|
%
|
|
|
12.5
|
%
|
|
|
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 closed Long Island facility include $0.6
million of accelerated depreciation for the twelve months ended
December 31, 2017.
|
| 4 |
|
|
Costs associated with the Oklahoma City facility closure for the
three and twelve months ended December 31, 2017 include $3.2
million of expenses associated with the execution of a sublease
for the facility. Costs associated with the Oklahoma City facility
closure for the twelve months ended December 31, 2017 also include
$4.3 million of loss on the write-down of assets to their held for
sale value and $3.7 million of accelerated depreciation.
|
|
|
|
Clearwater Paper Corporation
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
Adjusted Income Tax Provision
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
GAAP income tax benefit (provision)
|
|
|
$
|
62,245
|
|
|
|
$
|
(6,675
|
)
|
|
|
$
|
56,385
|
|
|
|
$
|
(31,112
|
)
|
|
Adjustments, tax impact:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal tax rate change3 |
|
|
(70,055
|
)
|
|
|
—
|
|
|
|
(70,055
|
)
|
|
|
—
|
|
|
Directors' equity-based compensation benefit (expense)
|
|
|
121
|
|
|
|
(125
|
)
|
|
|
952
|
|
|
|
(1,693
|
)
|
|
Costs associated with Oklahoma City facility closure
|
|
|
(1,215
|
)
|
|
|
(589
|
)
|
|
|
(4,977
|
)
|
|
|
(589
|
)
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
|
(594
|
)
|
|
|
—
|
|
|
|
(757
|
)
|
|
|
—
|
|
|
Costs associated with Long Island facility closure
|
|
|
(99
|
)
|
|
|
(163
|
)
|
|
|
(686
|
)
|
|
|
(672
|
)
|
|
Accelerated depreciation of assets as a result of warehouse
automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
(121
|
)
|
|
|
—
|
|
|
Manchester Industries acquisition related expenses
|
|
|
—
|
|
|
|
(465
|
)
|
|
|
(74
|
)
|
|
|
(465
|
)
|
|
Write-off of assets as a result of warehouse automation project
|
|
|
—
|
|
|
|
—
|
|
|
|
(14
|
)
|
|
|
—
|
|
|
Pension settlement expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,242
|
)
|
|
Costs associated with Neenah paper machines shutdown
|
|
|
—
|
|
|
|
(371
|
)
|
|
|
—
|
|
|
|
(371
|
)
|
|
Gain associated with the sale of the specialty mills, net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
626
|
|
|
Adjusted income tax benefit (provision)1 |
|
|
$
|
(9,597
|
)
|
|
|
$
|
(8,388
|
)
|
|
|
$
|
(19,347
|
)
|
|
|
$
|
(35,518
|
)
|
|
Adjusted income tax rate1,2 |
|
|
39.9
|
%
|
|
|
37.8
|
%
|
|
|
33.5
|
%
|
|
|
37.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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)].
|
| 3 |
|
|
The federal tax rate change in 2017 is primarily due to the
remeasurement of deferred tax liabilities as a result of the Act
signed into law on December 22, 2017. The resulting net tax benefit
is excluded from our adjusted non-GAAP earnings.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180205005914/en/
Source: Clearwater Paper Corporation
Clearwater Paper Corporation
(News media)
Shannon Myers,
509.344.5967
or
(Investors)
Robin S. Yim, 509.344.5906