SPOKANE, Wash.--(BUSINESS WIRE)--Nov. 8, 2018--
Clearwater Paper Corporation (NYSE:CLW) today reported financial
results for the third quarter of 2018.
The company reported net sales of $426.5 million for the third quarter
of 2018, which was flat with net sales for the third quarter of 2017.
Net earnings determined in accordance with generally accepted accounting
principles, or GAAP, for the third quarter of 2018 were $34.4 million,
or $2.08 per diluted share, compared to net earnings for the third
quarter of 2017 of $0.9 million, or $0.05 per diluted share. The
increase in net earnings was due primarily to a $22.9 million gain on
the sale of the company's Ladysmith, Wisconsin manufacturing facility
along with higher pricing and record shipment volumes in paperboard,
improved operating efficiencies and lower selling, general and
administrative expenses. Excluding certain non-core items identified in
the attached Reconciliation of Non-GAAP Financial Measures, third
quarter 2018 adjusted net earnings were $22.3 million, or $1.35 per
diluted share, compared to third quarter 2017 adjusted net earnings of
$5.3 million, or $0.32 per diluted share.
Earnings before interest, taxes, depreciation and amortization, or
EBITDA, were $71.0 million for the third quarter of 2018, compared to
$31.3 million for the third quarter of 2017. Adjusted EBITDA for the
quarter was $48.9 million, up 29.9% compared to third quarter 2017
Adjusted EBITDA of $37.6 million.
“We exceeded our expectations for the third quarter due to record
paperboard shipments and strong customer demand for paperboard,” said
Linda K. Massman, president and chief executive officer. “We are also
seeing positive results from the operating model improvements for our
tissue business, resulting in lower transportation and warehousing
costs.”
“For the remainder of 2018, we are in the home stretch to complete our
new paper machine, converting lines, and warehouse at our Shelby, North
Carolina facility. We are also keenly focused on generating cash to pay
down debt and optimizing our network of tissue assets to streamline
costs and better meet the needs of our customers.”
THIRD QUARTER2018SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $211.6 million for the
third quarter of 2018, down 9.1% compared to third quarter 2017 net
sales of $232.9 million. This decrease was due to lower retail volumes
and prices, the divestiture of the Ladysmith facility, and weaker
product mix as reflected in a 7.4% reduction in retail converted case
shipment volumes, partially offset by a 43.0% increase in non-retail
parent roll shipments as the company works to replace lost converted
case business in the second half of 2018.
Operating income and margin for the third quarter of 2018 were $21.7
million and 10.2%, an increase of $17.2 million compared to operating
income and margin of $4.5 million and 1.9% respectively, in the third
quarter of 2017, that was primarily due to the gain on sale of the
Ladysmith facility. After adjusting for certain non-core items
identified in the attached Reconciliation of Non-GAAP Financial
Measures, including the gain on the sale of Ladysmith, an adjusted
operating loss of $1.0 million for the third quarter of 2018 was down
from $10.3 million and 4.4% of adjusted operating income and margin,
respectively, for the same period in 2017. Adjusted EBITDA for the
segment was $13.4 million in the third quarter of 2018, down from $26.0
million in the third quarter of 2017. Those decreases were primarily due
to lower average selling prices, the absorption of fixed costs over
lower volumes of retail shipments, higher pulp costs and the divestiture
of Ladysmith.
Tissue Sales Volumes and Prices:
• Total tissue volumes sold were 88,860 tons in the third quarter of
2018, a decrease of 1.8% compared to 90,502 tons in the third quarter of
2017. Converted product cases shipped were 11.8 million in the third
quarter of 2018, 7.4% lower than the 12.7 million cases shipped in the
third quarter of 2017.
• Average tissue net selling prices decreased 7.5%, to $2,381 per ton in
the third quarter of 2018, compared to $2,574 per ton in the third
quarter of 2017, primarily due to the increased volume and percentage of
non-retail parent rolls in the product mix.
Pulp and Paperboard
Net sales in the Pulp and Paperboard segment were $214.8 million for the
third quarter of 2018, up 11.0% compared to third quarter 2017 net sales
of $193.6 million. The increase was due to record shipment volumes and
higher paperboard prices.
Operating income and margin for the third quarter of 2018 were $38.3
million and 17.8%, compared to $14.7 million and 7.6%, respectively, for
the third quarter of 2017. Adjusted EBITDA for the segment was $47.7
million in the third quarter of 2018, compared to $23.1 million in the
third quarter of 2017. The improvement was primarily due to higher
average selling prices and the absence of $21 million in major
maintenance expense incurred in the third quarter of 2017, which more
than offset increased costs for wood fiber in the Pacific Northwest and
higher transportation costs.
Paperboard Sales Volumes and Prices:
• Paperboard sales volumes were 218,135 tons in the third quarter of
2018, an increase of 8.8% compared to 200,569 tons in the third quarter
of 2017.
• Paperboard net selling prices increased 2.1% to $985 per ton for the
third quarter of 2018, compared to $965 per ton in the third quarter of
2017.
Taxes
The company's consolidated GAAP tax rate and adjusted tax rate for the
third quarter of 2018 were a provision of 9.6% and a benefit of 39.5%,
respectively. That compares to GAAP and adjusted tax rate benefits of
138.7% and 17.9% in the third quarter of 2017. The tax rate for the
third quarter of 2018 included a tax benefit of $10 million associated
with an alternative energy production tax credit recorded in the
quarter. The tax rate for 2017 reflected $2 million of similar
alternative energy credits in addition to a tax benefit due to a pre-tax
loss in the third quarter of 2017.
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 2018 and 2017, including adjusted
net earnings, adjusted net earnings per diluted share, EBITDA, adjusted
EBITDA, adjusted operating income, adjusted operating margin and
adjusted income tax rate provision and benefit. Because these amounts
are not in accordance with GAAP, reconciliations to net earnings, net
earnings per diluted share, operating income and income tax rate
provision and benefit 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 our business
strategies, and (iii) because our credit agreement and the indentures
governing our outstanding notes use metrics similar to EBITDA to measure
our 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
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 network optimization of tissue
assets, transportation and warehousing costs, completion of the Shelby,
North Carolina expansion, cash generation, debt repayment and the
replacement of lost converted tissue case sales. 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, changes in prices in
regards to, or a reduction in orders from, 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, including related
capital projects; the company's ability to achieve the expected
operational or financial results of its capital projects, including from
the continuous digester at the Lewiston facility; the company's ability
to complete construction of its new tissue manufacturing and converting
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 produced by the expanded Shelby,
North Carolina operations when 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 malfunctions 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 ability 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,
2017. 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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Net sales
|
|
$
|
426,460
|
|
100 |
% |
|
|
$
|
426,504
|
|
100 |
% |
|
|
$
|
1,295,511
|
|
100 |
% |
|
|
$
|
1,293,692
|
|
100 |
% |
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales1 |
|
(376,221
|
)
|
88 |
% |
|
|
(386,762
|
)
|
91 |
% |
|
|
(1,155,808
|
)
|
89 |
% |
|
|
(1,154,883
|
)
|
89 |
% |
|
Selling, general and administrative expenses1 |
|
(26,283
|
)
|
6 |
% |
|
|
(34,582
|
)
|
8 |
% |
|
|
(85,827
|
)
|
7 |
% |
|
|
(93,991
|
)
|
7 |
% |
|
Gain on divested assets, net
|
|
22,944
|
|
5 |
% |
|
|
—
|
|
— |
% |
|
|
22,944
|
|
2 |
% |
|
|
—
|
|
— |
% |
|
Total operating costs and expenses
|
|
(379,560
|
)
|
89 |
% |
|
|
(421,344
|
)
|
99 |
% |
|
|
(1,218,691
|
)
|
94 |
% |
|
|
(1,248,874
|
)
|
97 |
% |
|
Income from operations
|
|
46,900
|
|
11 |
% |
|
|
5,160
|
|
1 |
% |
|
|
76,820
|
|
6 |
% |
|
|
44,818
|
|
3 |
% |
|
Interest expense, net
|
|
(7,547
|
)
|
2 |
% |
|
|
(7,683
|
)
|
2 |
% |
|
|
(23,290
|
)
|
2 |
% |
|
|
(23,399
|
)
|
2 |
% |
|
Non-operating pension and other postretirement benefit (costs) income1 |
|
(1,234
|
)
|
— |
% |
|
|
291
|
|
— |
% |
|
|
(3,700
|
)
|
— |
% |
|
|
856
|
|
— |
% |
|
Earnings (loss) before income taxes
|
|
38,119
|
|
9 |
% |
|
|
(2,232
|
)
|
1 |
% |
|
|
49,830
|
|
4 |
% |
|
|
22,275
|
|
2 |
% |
|
Income tax (provision) benefit
|
|
(3,675
|
)
|
1 |
% |
|
|
3,095
|
|
1 |
% |
|
|
(5,825
|
)
|
— |
% |
|
|
(5,860
|
)
|
— |
% |
|
Net earnings
|
|
$
|
34,444
|
|
8 |
% |
|
|
$
|
863
|
|
— |
% |
|
|
$
|
44,005
|
|
3 |
% |
|
|
$
|
16,415
|
|
1 |
% |
|
Net earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.09
|
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
2.67
|
|
|
|
|
$
|
1.00
|
|
|
|
Diluted
|
|
2.08
|
|
|
|
|
0.05
|
|
|
|
|
2.66
|
|
|
|
|
0.99
|
|
|
|
Average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
16,487
|
|
|
|
|
16,458
|
|
|
|
|
16,493
|
|
|
|
|
16,466
|
|
|
|
Diluted
|
|
16,564
|
|
|
|
|
16,567
|
|
|
|
|
16,573
|
|
|
|
|
16,573
|
|
|
| 1 |
|
In the first quarter of 2018, the Company adopted a new accounting
standard that resulted in a change in the presentation of pension
and postretirement benefit (costs) income other than service costs
on a line outside of “Income from operations.” The corresponding
prior period amounts have been reclassified to conform with the
current period presentation.
|
|
|
|
Clearwater Paper Corporation
|
|
Condensed Consolidated Balance Sheets
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
76,150
|
|
|
|
$
|
15,738
|
|
Restricted cash
|
|
1,080
|
|
|
|
—
|
|
Receivables, net
|
|
139,170
|
|
|
|
142,065
|
|
Taxes receivable
|
|
6,748
|
|
|
|
20,282
|
|
Inventories
|
|
263,274
|
|
|
|
266,043
|
|
Other current assets
|
|
6,105
|
|
|
|
8,661
|
|
Total current assets
|
|
492,527
|
|
|
|
452,789
|
|
Property, plant and equipment, net
|
|
1,206,168
|
|
|
|
1,050,982
|
|
Goodwill
|
|
230,153
|
|
|
|
244,161
|
|
Intangible assets, net
|
|
25,865
|
|
|
|
32,542
|
|
Other assets, net
|
|
25,382
|
|
|
|
21,778
|
|
TOTAL ASSETS
|
|
$
|
1,980,095
|
|
|
|
$
|
1,802,252
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Borrowings under revolving credit facilities
|
|
$
|
100,000
|
|
|
|
$
|
155,000
|
|
Accounts payable and accrued liabilities
|
|
341,075
|
|
|
|
256,621
|
|
Current liability for pensions and other postretirement employee
benefits
|
|
7,631
|
|
|
|
7,631
|
|
Total current liabilities
|
|
448,706
|
|
|
|
419,252
|
|
Long-term debt
|
|
671,100
|
|
|
|
570,524
|
|
Liability for pensions and other postretirement employee benefits
|
|
67,759
|
|
|
|
72,469
|
|
Other long-term obligations
|
|
37,788
|
|
|
|
43,275
|
|
Accrued taxes
|
|
2,839
|
|
|
|
2,770
|
|
Deferred tax liabilities
|
|
123,778
|
|
|
|
118,528
|
|
TOTAL LIABILITIES
|
|
1,351,970
|
|
|
|
1,226,818
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
628,125
|
|
|
|
575,434
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
1,980,095
|
|
|
|
$
|
1,802,252
|
|
|
|
|
|
|
|
|
|
|
|
|
Clearwater Paper Corporation
|
|
Consolidated Statements of Cash Flows
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
Nine Months Ended
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net earnings
|
|
$
|
44,005
|
|
|
|
$
|
16,415
|
|
|
Adjustments to reconcile net earnings to net cash flows from
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
75,686
|
|
|
|
79,468
|
|
|
Equity-based compensation expense
|
|
2,845
|
|
|
|
2,523
|
|
|
Deferred taxes
|
|
3,930
|
|
|
|
14,602
|
|
|
Employee benefit plans
|
|
102
|
|
|
|
(2,999
|
)
|
|
Gain on divested assets
|
|
(25,510
|
)
|
|
|
—
|
|
|
Disposal of plant and equipment, net
|
|
128
|
|
|
|
3,755
|
|
|
Other non-cash adjustments, net
|
|
899
|
|
|
|
874
|
|
|
Changes in working capital, net
|
|
7,402
|
|
|
|
43,846
|
|
|
Changes in taxes receivable, net
|
|
13,534
|
|
|
|
(4,869
|
)
|
|
Other, net
|
|
(1,922
|
)
|
|
|
(1,439
|
)
|
|
Net cash flows from operating activities
|
|
121,099
|
|
|
|
152,176
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
(174,034
|
)
|
|
|
(136,650
|
)
|
|
Proceeds from divested assets
|
|
70,930
|
|
|
|
—
|
|
|
Other, net
|
|
807
|
|
|
|
753
|
|
|
Net cash flows from investing activities
|
|
(102,297
|
)
|
|
|
(135,897
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
Purchase of treasury stock
|
|
—
|
|
|
|
(4,875
|
)
|
|
Borrowings on revolving credit facilities
|
|
322,454
|
|
|
|
185,000
|
|
|
Repayments of borrowings on revolving credit facilities
|
|
(277,454
|
)
|
|
|
(210,000
|
)
|
|
Other, net
|
|
(853
|
)
|
|
|
(927
|
)
|
|
Net cash flows from financing activities
|
|
44,147
|
|
|
|
(30,802
|
)
|
|
Increase (decrease) in cash, cash equivalents, and restricted cash
|
|
62,949
|
|
|
|
(14,523
|
)
|
|
Cash, cash equivalents, and restricted cash at beginning of period
|
|
16,738
|
|
|
|
23,001
|
|
|
Cash, cash equivalents, and restricted cash at end of period
|
|
$
|
79,687
|
|
|
|
$
|
8,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clearwater Paper Corporation
|
|
Segment Information
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Segment net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Products
|
|
$
|
211,642
|
|
50 |
% |
|
|
$
|
232,916
|
|
55 |
% |
|
|
$
|
672,069
|
|
52 |
% |
|
|
$
|
707,251
|
|
55 |
% |
|
Pulp and Paperboard
|
|
214,818
|
|
50 |
% |
|
|
193,588
|
|
45 |
% |
|
|
623,442
|
|
48 |
% |
|
|
586,441
|
|
45 |
% |
|
Total segment net sales
|
|
$
|
426,460
|
|
100 |
% |
|
|
$
|
426,504
|
|
100 |
% |
|
|
$
|
1,295,511
|
|
100 |
% |
|
|
$
|
1,293,692
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Products1 |
|
$
|
(1,269
|
)
|
3 |
% |
|
|
$
|
4,525
|
|
88 |
% |
|
|
$
|
(3,244
|
)
|
4 |
% |
|
|
$
|
21,427
|
|
48 |
% |
|
Gain on divested assets
|
|
22,944
|
|
49 |
% |
|
|
—
|
|
— |
% |
|
|
22,944
|
|
30 |
% |
|
|
—
|
|
— |
% |
|
Pulp and Paperboard1 |
|
38,280
|
|
82 |
% |
|
|
14,735
|
|
286 |
% |
|
|
98,626
|
|
128 |
% |
|
|
63,006
|
|
141 |
% |
|
|
59,955
|
|
|
|
|
19,260
|
|
|
|
|
118,326
|
|
|
|
|
84,433
|
|
|
|
Corporate1 |
|
(13,055
|
)
|
28 |
% |
|
|
(14,100
|
)
|
273 |
% |
|
|
(41,506
|
)
|
54 |
% |
|
|
(39,615
|
)
|
88 |
% |
|
Income from operations
|
|
$
|
46,900
|
|
100 |
% |
|
|
$
|
5,160
|
|
100 |
% |
|
|
$
|
76,820
|
|
100 |
% |
|
|
$
|
44,818
|
|
100 |
% |
| 1 |
|
In the first quarter of 2018, the Company adopted a new accounting
standard that resulted in a change in the presentation of pension
and postretirement benefit (costs) income other than service costs
on a line outside of “Income from operations.” The corresponding
prior period amounts have been reclassified to conform with the
current period presentation.
|
|
|
|
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,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Net earnings
|
|
$
|
34,444
|
|
|
$
|
863
|
|
|
$
|
44,005
|
|
|
$
|
16,415
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
7,547
|
|
|
7,683
|
|
|
23,290
|
|
|
23,399
|
|
|
Income tax provision (benefit)
|
|
3,675
|
|
|
(3,095
|
)
|
|
5,825
|
|
|
5,860
|
|
|
Depreciation and amortization expense3 |
|
25,342
|
|
|
25,856
|
|
|
75,686
|
|
|
79,468
|
|
|
EBITDA1 |
|
$
|
71,008
|
|
|
$
|
31,307
|
|
|
$
|
148,806
|
|
|
$
|
125,142
|
|
|
|
|
|
|
|
|
|
|
|
Gain on divested assets, net
|
|
$
|
(22,944
|
)
|
|
$
|
—
|
|
|
$
|
(22,944
|
)
|
|
$
|
—
|
|
|
Directors' equity-based compensation expense (benefit)
|
|
769
|
|
|
463
|
|
|
(1,930
|
)
|
|
(2,470
|
)
|
|
Reorganization related expenses associated with SG&A cost control
measures
|
|
210
|
|
|
480
|
|
|
6,390
|
|
|
480
|
|
|
Consumer products reorganization related expenses
|
|
158
|
|
|
—
|
|
|
950
|
|
|
—
|
|
|
Other
|
|
(338
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure4 |
|
—
|
|
|
5,057
|
|
|
—
|
|
|
7,406
|
|
|
Costs associated with Long Island facility closure
|
|
—
|
|
|
314
|
|
|
—
|
|
|
1,145
|
|
|
Manchester Industries acquisition related expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
220
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
Adjusted EBITDA2 |
|
$
|
48,863
|
|
|
$
|
37,621
|
|
|
$
|
131,272
|
|
|
$
|
131,964
|
|
| 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, 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 |
|
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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
GAAP net earnings
|
|
$
|
34,444
|
|
|
|
$
|
863
|
|
|
|
$
|
44,005
|
|
|
|
$
|
16,415
|
|
|
Adjustments, after-tax1:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on divested assets, net
|
|
(12,680
|
)
|
|
|
—
|
|
|
|
(12,680
|
)
|
|
|
—
|
|
|
Directors' equity-based compensation expense (benefit)
|
|
524
|
|
|
|
306
|
|
|
|
(1,480
|
)
|
|
|
(1,639
|
)
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
143
|
|
|
|
317
|
|
|
|
4,767
|
|
|
|
317
|
|
|
Consumer products reorganization related expenses
|
|
108
|
|
|
|
—
|
|
|
|
694
|
|
|
|
—
|
|
|
Other
|
|
(250
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Impact of state tax rate changes
|
|
—
|
|
|
|
—
|
|
|
|
(676
|
)
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure
|
|
—
|
|
|
|
3,338
|
|
|
|
—
|
|
|
|
7,307
|
|
|
Costs associated with Long Island facility closure
|
|
—
|
|
|
|
402
|
|
|
|
—
|
|
|
|
1,150
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
—
|
|
|
|
79
|
|
|
|
—
|
|
|
|
240
|
|
|
Manchester Industries acquisition related expenses
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
146
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
27
|
|
|
Adjusted net earnings2 |
|
$
|
22,289
|
|
|
|
$
|
5,305
|
|
|
|
$
|
34,630
|
|
|
|
$
|
23,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net earnings per diluted share
|
|
$
|
2.08
|
|
|
|
$
|
0.05
|
|
|
|
$
|
2.66
|
|
|
|
$
|
0.99
|
|
|
Adjustments, after-tax1:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on divested assets, net
|
|
(0.76
|
)
|
|
|
—
|
|
|
|
(0.78
|
)
|
|
|
—
|
|
|
Directors' equity-based compensation expense (benefit)
|
|
0.03
|
|
|
|
0.02
|
|
|
|
(0.09
|
)
|
|
|
(0.10
|
)
|
|
Reorganization expenses associated with SG&A cost control measures
|
|
0.01
|
|
|
|
0.02
|
|
|
|
0.29
|
|
|
|
0.02
|
|
|
Consumer products reorganization related expenses
|
|
0.01
|
|
|
|
—
|
|
|
|
0.04
|
|
|
|
—
|
|
|
Other
|
|
(0.02
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Impact of state tax rate changes
|
|
—
|
|
|
|
—
|
|
|
|
(0.04
|
)
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure
|
|
—
|
|
|
|
0.20
|
|
|
|
—
|
|
|
|
0.44
|
|
|
Costs associated with Long Island facility closure
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
|
|
0.07
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.02
|
|
|
Manchester Industries acquisition related expenses
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
|
Adjusted net earnings per diluted share2 |
|
$
|
1.35
|
|
|
|
$
|
0.32
|
|
|
|
$
|
2.09
|
|
|
|
$
|
1.45
|
|
| 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 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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
| Consumer Products: |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
211,642
|
|
|
|
$
|
232,916
|
|
|
|
$
|
672,069
|
|
|
|
$
|
707,251
|
|
|
Operating income5 |
|
21,675
|
|
|
|
4,525
|
|
|
|
19,700
|
|
|
|
21,427
|
|
|
Depreciation and amortization expense6 |
|
14,447
|
|
|
|
16,073
|
|
|
|
42,964
|
|
|
|
50,607
|
|
|
Consumer Products EBITDA1,5 |
|
$
|
36,122
|
|
|
|
$
|
20,598
|
|
|
|
$
|
62,664
|
|
|
|
$
|
72,034
|
|
|
Gain on divested assets, net
|
|
(22,944
|
)
|
|
|
—
|
|
|
|
(22,944
|
)
|
|
|
—
|
|
|
Reorganization related expenses associated with SG&A cost control
measures
|
|
87
|
|
|
|
—
|
|
|
|
1,746
|
|
|
|
—
|
|
|
Consumer products reorganization related expenses
|
|
158
|
|
|
|
—
|
|
|
|
950
|
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure7 |
|
—
|
|
|
|
5,057
|
|
|
|
—
|
|
|
|
7,406
|
|
|
Costs associated with Long Island facility closure
|
|
—
|
|
|
|
314
|
|
|
|
—
|
|
|
|
1,145
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
Consumer Products Adjusted EBITDA2,5 |
|
$
|
13,423
|
|
|
|
$
|
25,969
|
|
|
|
$
|
42,416
|
|
|
|
$
|
80,626
|
|
|
Consumer Products EBITDA margin3 |
|
17.1
|
%
|
|
|
8.8
|
%
|
|
|
9.3
|
%
|
|
|
10.2
|
%
|
|
Consumer Products Adjusted EBITDA margin4 |
|
6.3
|
%
|
|
|
11.1
|
%
|
|
|
6.3
|
%
|
|
|
11.4
|
%
|
| Pulp and Paperboard |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
214,818
|
|
|
|
$
|
193,588
|
|
|
|
$
|
623,442
|
|
|
|
$
|
586,441
|
|
|
Operating income5 |
|
38,280
|
|
|
|
14,735
|
|
|
|
98,626
|
|
|
|
63,006
|
|
|
Depreciation and amortization expense
|
|
9,316
|
|
|
|
8,328
|
|
|
|
28,106
|
|
|
|
24,789
|
|
|
Pulp and Paperboard EBITDA1,5 |
|
$
|
47,596
|
|
|
|
$
|
23,063
|
|
|
|
$
|
126,732
|
|
|
|
$
|
87,795
|
|
|
Reorganization related expenses associated with SG&A cost control
measures
|
|
71
|
|
|
|
—
|
|
|
|
454
|
|
|
|
—
|
|
|
Pulp and Paperboard Adjusted EBITDA2,5 |
|
$
|
47,667
|
|
|
|
$
|
23,063
|
|
|
|
$
|
127,186
|
|
|
|
$
|
87,795
|
|
|
Pulp and Paperboard EBITDA margin3 |
|
22.2
|
%
|
|
|
11.9
|
%
|
|
|
20.3
|
%
|
|
|
15.0
|
%
|
|
Pulp and Paperboard Adjusted EBITDA margin4 |
|
22.2
|
%
|
|
|
11.9
|
%
|
|
|
20.4
|
%
|
|
|
15.0
|
%
|
| 1 |
|
Segment EBITDA is segment operating 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.
|
| 5 |
|
In the first quarter of 2018, the Company adopted a new accounting
standard that resulted in a change in the presentation of pension
and postretirement benefit (costs) income other than service costs
on a line outside of “Income from operations.” The corresponding
prior period amounts have been reclassified to conform with the
current period presentation.
|
| 6 |
|
Consumer Products depreciation and amortization expense for the
three months ended September 30, 2017 includes accelerated
depreciation of $0.3 million associated with the 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.
|
|
7
|
|
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
|
|
Segment Adjusted Operating Income and Operating Margin
|
|
Unaudited (Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
| Consumer Products: |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
211,642
|
|
|
|
$
|
232,916
|
|
|
|
$
|
672,069
|
|
|
|
$
|
707,251
|
|
|
Operating income3 |
|
21,675
|
|
|
|
4,525
|
|
|
|
19,700
|
|
|
|
21,427
|
|
|
Gain on Divested Assets, net
|
|
(22,944
|
)
|
|
|
—
|
|
|
|
(22,944
|
)
|
|
|
—
|
|
|
Reorganization related expenses associated with SG&A cost control
measures
|
|
87
|
|
|
|
—
|
|
|
|
1,746
|
|
|
|
—
|
|
|
Consumer products reorganization related expenses
|
|
158
|
|
|
|
—
|
|
|
|
950
|
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure 4 |
|
—
|
|
|
|
5,057
|
|
|
|
—
|
|
|
|
11,069
|
|
|
Costs associated with Long Island facility closure5 |
|
—
|
|
|
|
610
|
|
|
|
—
|
|
|
|
1,736
|
|
|
Accelerated depreciation of assets as a result of Warehouse
Automation project
|
|
—
|
|
|
|
120
|
|
|
|
—
|
|
|
|
361
|
|
|
Write-off of assets as a result of Warehouse Automation project
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
41
|
|
|
Consumer Products Adjusted operating (loss) income1,3 |
|
$
|
(1,024
|
)
|
|
|
$
|
10,312
|
|
|
|
$
|
(548
|
)
|
|
|
$
|
34,634
|
|
|
Consumer Products operating margin
|
|
10.2
|
%
|
|
|
1.9
|
%
|
|
|
2.9
|
%
|
|
|
3.0
|
%
|
|
Consumer Products Adjusted operating margin2 |
|
(0.5
|
)%
|
|
|
4.4
|
%
|
|
|
(0.1
|
)%
|
|
|
4.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pulp and Paperboard: |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
214,818
|
|
|
|
$
|
193,588
|
|
|
|
$
|
623,442
|
|
|
|
$
|
586,441
|
|
|
Operating income3 |
|
38,280
|
|
|
|
14,735
|
|
|
|
98,626
|
|
|
|
63,006
|
|
|
Reorganization related expenses associated with SG&A cost control
measures
|
|
71
|
|
|
|
—
|
|
|
|
454
|
|
|
|
—
|
|
|
Pulp and Paperboard Adjusted operating income1,3
|
|
$
|
38,351
|
|
|
|
$
|
14,735
|
|
|
|
$
|
99,080
|
|
|
|
$
|
63,006
|
|
|
Pulp and Paperboard operating margin
|
|
17.8
|
%
|
|
|
7.6
|
%
|
|
|
15.8
|
%
|
|
|
10.7
|
%
|
|
Pulp and Paperboard Adjusted operating margin2 |
|
17.9
|
%
|
|
|
7.6
|
%
|
|
|
15.9
|
%
|
|
|
10.7
|
%
|
| 1 |
|
Segment Adjusted operating 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 income divided by Segment Net sales.
|
| 3 |
|
In the first quarter of 2018, the Company adopted a new accounting
standard that resulted in a change in the presentation of pension
and postretirement benefit (costs) income other than service costs
on a line outside of “Income from operations.” The corresponding
prior period amounts have been reclassified to conform with the
current period presentation.
|
| 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 |
|
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.
|
|
|
|
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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
GAAP income tax (provision) benefit
|
|
$
|
(3,675
|
)
|
|
|
$
|
3,095
|
|
|
|
$
|
(5,825
|
)
|
|
|
$
|
(5,860
|
)
|
|
Adjustments, tax impact:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on divested assets, net
|
|
10,264
|
|
|
|
—
|
|
|
|
10,264
|
|
|
|
—
|
|
|
Directors' equity-based compensation (expense) benefit
|
|
(245
|
)
|
|
|
(157
|
)
|
|
|
450
|
|
|
|
831
|
|
|
Reorganization related expenses associated with SG&A cost control
measures
|
|
(67
|
)
|
|
|
(163
|
)
|
|
|
(1,623
|
)
|
|
|
(163
|
)
|
|
Consumer products reorganization related expenses
|
|
(50
|
)
|
|
|
—
|
|
|
|
(256
|
)
|
|
|
—
|
|
|
Other
|
|
88
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Impact of state tax reform
|
|
—
|
|
|
|
—
|
|
|
|
(676
|
)
|
|
|
—
|
|
|
Costs associated with Oklahoma City facility closure
|
|
—
|
|
|
|
(1,719
|
)
|
|
|
—
|
|
|
|
(3,762
|
)
|
|
Manchester Industries acquisition related expenses
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(74
|
)
|
|
Costs associated with Long Island facility closure
|
|
—
|
|
|
|
(208
|
)
|
|
|
—
|
|
|
|
(586
|
)
|
|
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 |
|
$
|
6,315
|
|
|
|
$
|
807
|
|
|
|
$
|
2,334
|
|
|
|
$
|
(9,749
|
)
|
|
Adjusted income tax rate1,2 |
|
39.5
|
%
|
|
|
17.9
|
%
|
|
|
7.2
|
%
|
|
|
28.9
|
%
|
| 1 |
|
Adjusted income tax benefit (provision) and Adjusted income tax
rate exclude the impact of the items listed that the Company
does not believe are indicative of its core operating performance.
|
| 2 |
|
The Adjusted income tax rate is defined as [Adjusted income
tax benefit (provision)/(Adjusted income tax benefit (provision) +
Adjusted net earnings)].
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181108005821/en/
Source: Clearwater Paper Corporation
Clearwater Paper Corporation
(News media)
Shannon Myers,
509-344-5967
or
(Investors)
Robin S. Yim, 509-344-5906
Vice
President, Investor Relations