Clearwater Paper Reports First Quarter 2024 Results
FIRST QUARTER HIGHLIGHTS
- Strong performance driven by lower input costs and continued strength in tissue
- Continued strong demand in tissue and improved customer demand in paperboard
-
Severe weather event resulting in significant disruption to production at the
Lewiston site -
Net sales of
$496 million , down 6% from the first quarter of last year -
Net income of
$17 million , or$1.02 per diluted share, down$7 million from the first quarter of last year -
Adjusted net income of
$24 million ,$1 million lower than the first quarter of last year -
Adjusted EBITDA of
$62 million ,$4 million lower than first quarter of last year -
Reduced net debt by
$33 million , repurchased$1 million of outstanding shares with$6 million remaining under program
“Despite the significant weather event that impacted the quarter, we delivered solid results that came in at the higher end of our expectations through strong operational execution,” said
PAPERBOARD FACILITY ACQUISITION UPDATE
Clearwater Paper previously announced that it signed a definitive agreement to acquire from
OVERALL RESULTS
For the first quarter of 2024, Clearwater Paper reported net sales of
Pulp and Paperboard Segment
Net sales in the Pulp and Paperboard segment were
Pulp and Paperboard Sales Volumes and Prices:
- Paperboard sales volumes were 187,303 tons in the first quarter of 2024, a decrease of 1% compared to 189,398 tons in the first quarter of 2023.
-
Paperboard average net selling price decreased 11% to
$1,284 per ton for the first quarter of 2023, compared to$1,441 per ton in the first quarter of 2023.
Consumer Products Segment
Net sales in the Consumer Products segment were
Retail Tissue Sales Volumes and Prices:
- Retail tissue volumes sold were 79,929 tons in the first quarter of 2024, an increase of 5% compared to 76,848 tons in the first quarter of 2023.
-
Retail tissue average net selling price decreased 2% to
$3,138 per ton in the first quarter of 2024, compared to$3,201 per ton in the first quarter of 2023.
COMPANY OUTLOOK
“We expect continued strength in our tissue performance this year and a recovery in paperboard demand as we believe customer de-stocking is now largely behind us. We are also looking forward to completing the
WEBCAST INFORMATION
ABOUT CLEARWATER PAPER
Clearwater Paper is a premier supplier of private brand tissue to major retailers, including grocery, club, mass merchants, and discount stores. In addition, the company produces 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 relationships through quality and service.
USE OF NON-GAAP MEASURES
In this press release, the company presents certain non-GAAP financial information for the first quarter of 2024 and 2023, including adjusted income and Adjusted EBITDA. Because these amounts are not in accordance with GAAP, reconciliations to net income as determined in accordance with GAAP are included in the tables at the end of this press release. The company presents these non-GAAP metrics 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 Adjusted EBITDA: (i) as a factor in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the effectiveness of the company's business strategies, and (iii) because the company's credit agreement and the indentures governing the company's outstanding notes use metrics similar to Adjusted EBITDA to measure the company's compliance with certain covenants.
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 pending acquisition of the paperboard facility and associated business in
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Consolidated Statements of Operations |
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(Unaudited) |
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Quarter Ended
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(In millions, except per-share data) |
|
2024 |
|
|
2023 |
|
|
Net sales |
$ |
496.2 |
|
$ |
525.4 |
|
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Costs and expenses: |
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Cost of sales |
|
421.6 |
|
|
448.5 |
|
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Selling, general and administrative expenses |
|
36.2 |
|
|
36.0 |
|
|
Other operating charges, net 1 |
|
7.9 |
|
|
1.1 |
|
|
Total operating costs and expenses |
|
465.8 |
|
|
485.6 |
|
|
Income from operations |
|
30.4 |
|
|
39.8 |
|
|
Interest expense, net |
|
(6.5 |
) |
|
(7.6 |
) |
|
Other non-operating income |
|
0.3 |
|
|
0.1 |
|
|
Total non-operating expense |
|
(6.2 |
) |
|
(7.5 |
) |
|
Income before income taxes |
|
24.2 |
|
|
32.3 |
|
|
Income tax provision |
|
7.0 |
|
|
8.4 |
|
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Net income |
$ |
17.2 |
|
$ |
23.8 |
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Net income per common share: |
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Basic |
$ |
1.03 |
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$ |
1.42 |
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Diluted |
|
1.02 |
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|
1.40 |
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Average shares outstanding (in thousands): |
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Basic |
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16,607 |
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|
16,834 |
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Diluted |
|
16,895 |
|
|
17,036 |
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1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the |
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Condensed Consolidated Balance Sheets |
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(Unaudited) |
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(In millions) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
55.2 |
|
$ |
42.0 |
|
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Receivables, net |
|
173.1 |
|
|
184.5 |
|
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Inventories |
|
327.8 |
|
|
319.8 |
|
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Other current assets |
|
20.2 |
|
|
17.9 |
|
|
Total current assets |
|
576.2 |
|
|
564.1 |
|
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Property, plant and equipment, net |
|
983.1 |
|
|
990.1 |
|
|
Other assets, net |
|
120.4 |
|
|
117.6 |
|
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Total assets |
$ |
1,679.7 |
|
$ |
1,671.8 |
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Liabilities and stockholders' equity |
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Current liabilities: |
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Current portion of long-term debt |
$ |
0.9 |
|
$ |
0.8 |
|
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Accounts payable and accrued liabilities |
|
300.6 |
|
|
285.1 |
|
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Total current liabilities |
|
301.4 |
|
|
286.0 |
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Long-term debt |
|
442.3 |
|
|
462.3 |
|
|
Liability for pension and other postretirement employee benefits |
|
55.1 |
|
|
55.7 |
|
|
Deferred tax liabilities and other long-term obligations |
|
196.3 |
|
|
199.1 |
|
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Total liabilities |
|
995.2 |
|
|
1,003.0 |
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Stockholders' equity: |
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Common stock |
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— |
|
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— |
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Additional paid-in capital |
|
13.5 |
|
|
14.9 |
|
|
Retained earnings |
|
701.7 |
|
|
684.5 |
|
|
Accumulated other comprehensive loss, net of tax |
|
(30.7 |
) |
|
(30.7 |
) |
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Total stockholders' equity |
|
684.5 |
|
|
668.8 |
|
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Total liabilities and stockholders' equity |
$ |
1,679.7 |
|
$ |
1,671.8 |
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Consolidated Statements of Cash Flows |
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(Unaudited) |
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Quarter Ended
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(In millions) |
|
2024 |
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|
2023 |
|
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Operating activities |
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Net income |
$ |
17.2 |
|
$ |
23.8 |
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Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: |
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Depreciation and amortization |
|
23.2 |
|
|
24.8 |
|
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Equity-based compensation expense |
|
3.3 |
|
|
1.9 |
|
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Deferred taxes |
|
(1.6 |
) |
|
(1.3 |
) |
|
Defined benefit pension and other postretirement employee benefits |
|
(0.9 |
) |
|
(0.5 |
) |
|
Loss on sale or impairment associated with assets |
|
0.2 |
|
|
1.1 |
|
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Increase (decrease) in cash from changes in operating assets and liabilities: |
|
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(Increase) decrease in accounts receivable |
|
7.8 |
|
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(6.4 |
) |
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(Increase) decrease in inventories |
|
(8.2 |
) |
|
(22.3 |
) |
|
(Increase) decrease in other current assets |
|
(2.3 |
) |
|
0.4 |
|
|
Increase (decrease) in accounts payable and accrued liabilities |
|
20.5 |
|
|
(31.7 |
) |
|
Other, net |
|
0.1 |
|
|
1.0 |
|
|
Net cash flows provided by (used in) operating activities |
|
59.2 |
|
|
(9.1 |
) |
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Investing activities |
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Additions to property, plant and equipment, net |
|
(18.5 |
) |
|
(21.5 |
) |
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Net cash flows used in investing activities |
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(18.5 |
) |
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(21.5 |
) |
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Financing activities |
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Borrowings on long-term debt |
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— |
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12.0 |
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Repayments of long-term debt |
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(23.5 |
) |
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(12.2 |
) |
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Taxes paid related to net share settlement of equity awards |
|
(3.1 |
) |
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(4.2 |
) |
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Repurchases of common stock |
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(0.5 |
) |
|
(1.7 |
) |
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Other, net |
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(0.4 |
) |
|
(0.1 |
) |
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Net cash flows used in financing activities |
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(27.6 |
) |
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(6.3 |
) |
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Increase (decrease) in cash, cash equivalents and restricted cash |
|
13.2 |
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(37.0 |
) |
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Cash, cash equivalents and restricted cash at beginning of period |
|
42.0 |
|
|
54.4 |
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Cash, cash equivalents and restricted cash at end of period |
$ |
55.2 |
|
$ |
17.4 |
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Segment Information |
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(Unaudited) |
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Quarter Ended
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(In millions) |
|
2024 |
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2023 |
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Segment net sales: |
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Pulp and Paperboard |
$ |
244.5 |
|
$ |
278.8 |
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Consumer Products |
|
253.1 |
|
|
248.3 |
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Eliminations |
|
(1.4 |
) |
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(1.7 |
) |
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Total segment net sales |
$ |
496.2 |
|
$ |
525.4 |
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Operating income (loss): |
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Pulp and Paperboard |
$ |
25.3 |
|
$ |
57.1 |
|
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Consumer Products |
|
31.5 |
|
|
4.2 |
|
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Corporate and eliminations |
|
(18.5 |
) |
|
(20.4 |
) |
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Other operating charges, net 1 |
|
(7.9 |
) |
|
(1.1 |
) |
|
Income from operations |
$ |
30.4 |
|
$ |
39.8 |
|
|
1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the |
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Reconciliation of Non-GAAP Financial Measures |
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Adjusted EBITDA |
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(Unaudited) |
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Quarter Ended
|
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(In millions) |
|
2024 |
|
|
2023 |
|
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Net income |
$ |
17.2 |
|
$ |
23.8 |
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Add back: |
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Income tax provision |
|
7.0 |
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|
8.4 |
|
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Interest expense, net |
|
6.5 |
|
|
7.6 |
|
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Depreciation and amortization |
|
23.2 |
|
|
24.8 |
|
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Other operating charges, net 1 |
|
7.9 |
|
|
1.1 |
|
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Other non-operating income |
|
(0.3 |
) |
|
(0.1 |
) |
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Adjusted EBITDA |
$ |
61.5 |
|
$ |
65.7 |
|
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Pulp and Paperboard segment income |
$ |
25.3 |
|
$ |
57.1 |
|
|
Depreciation and amortization |
|
8.4 |
|
|
9.1 |
|
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Adjusted EBITDA Pulp and Paperboard |
$ |
33.7 |
|
$ |
66.2 |
|
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Consumer Products segment income |
$ |
31.5 |
|
$ |
4.2 |
|
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Depreciation and amortization |
|
14.2 |
|
|
15.0 |
|
|
Adjusted EBITDA Consumer Products |
$ |
45.7 |
|
$ |
19.2 |
|
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Corporate and other expenses |
$ |
(18.5 |
) |
$ |
(20.4 |
) |
|
Depreciation and amortization |
|
0.6 |
|
|
0.6 |
|
|
Adjusted EBITDA Corporate and other |
$ |
(17.9 |
) |
$ |
(19.8 |
) |
|
|
|
|
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|
Pulp and Paperboard segment |
$ |
33.7 |
|
$ |
66.2 |
|
|
Consumer Products segment |
|
45.7 |
|
|
19.2 |
|
|
Corporate and other |
|
(17.9 |
) |
|
(19.8 |
) |
|
Adjusted EBITDA |
$ |
61.5 |
|
$ |
65.7 |
|
|
1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the |
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Reconciliation of Non-GAAP Financial Measures |
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(Unaudited) |
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|
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|
Quarter Ended
|
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|
(In millions, except per share data) |
2024 |
2023 |
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Adjusted net income: |
|
|
||
|
Net income |
$ |
17.2 |
$ |
23.8 |
|
Add back: |
|
|
||
|
Income tax provision |
|
7.0 |
|
8.4 |
|
Income before income taxes |
|
24.2 |
|
32.3 |
|
|
|
|
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|
Add back: |
|
|
||
|
Other operating charges, net |
|
7.9 |
|
1.1 |
|
Adjusted income before tax |
$ |
32.1 |
$ |
33.4 |
|
Normalized income tax provision |
|
8.0 |
|
8.3 |
|
Adjusted net income |
$ |
24.1 |
$ |
25.0 |
|
|
|
|
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|
Weighted average diluted shares (thousands) |
|
16,895 |
|
17,036 |
|
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|
Adjusted income per diluted share |
$ |
1.43 |
$ |
1.47 |
|
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|
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Calculation of net debt: |
|
|
||
|
Current portion of long-term debt |
$ |
0.9 |
$ |
0.8 |
|
Long-term debt |
|
442.3 |
|
462.3 |
|
Add back: |
|
|
||
|
Unamortized deferred debt costs |
|
4.9 |
|
5.1 |
|
Less: |
|
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|
Cash and cash equivalents |
|
55.2 |
|
42.0 |
|
Net debt |
$ |
392.9 |
$ |
426.3 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240429536422/en/
Investor contact:
509-344-5906
investorinfo@clearwaterpaper.com
Media contact:
509-344-5953
Julia.joy@clearwaterpaper.com
Source:
