Clearwater Paper Corp 8-K, filed Feb 14, 2023
Clearwater Paper Corp (CLW)
8-K
2023-02-14
For: 2023-02-14
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Added on
April 06, 2026
About this 8-K
Clearwater Paper Corp filed this 8-K on February 14, 2023.
Items reported
- Item 2.02: Financial results
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 14, 2023
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(509 ) 344-5900
(Registrant’s telephone number, including area code)
Not Applicable
(Former name of former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchanged on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 14, 2023, Clearwater Paper Corporation (the “Company”) announced its results of operations for the fourth quarter and year ending December 31, 2022. A copy of the press release containing this announcement is furnished as Exhibit 99.1 hereto. In addition, a copy of the Company’s Fourth Quarter 2022 Earnings Release Materials is furnished as Exhibit 99.2 hereto.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), the following are disclosed the attached Adjusted EBITDA which is defined as earnings before interest expense, taxes, depreciation and amortization, other operating credits and charges, net and other non-operating items. Adjusted EBITDA margin, which is calculated by dividing Adjusted EBITDA from continuing operations by net sales and discloses Adjusted income from operations which is calculated by excluding from income from operations, other operating credits and charges, net, and adjusts for a normalized tax rate. Adjusted EBITDA and Adjusted income from operations are not a substitute for the GAAP measure of net income or other GAAP measures of operating performance.
The Company discloses Adjusted EBITDA in the attached because it is used as important supplemental measure of its performance and believes that similarly-titled measures are frequently used by securities analysts, investors and other interested persons in the evaluation of companies in its industry, some of which present similarly-titled measures when reporting their results. The Company uses Adjusted EBITDA to evaluate its performance as compared to other companies in its industry that have different financing and capital structures and/or tax rates. It should be noted that companies calculate similarly-titled measures differently and, therefore, as presented by the Company may not be comparable to similarly-titled measures reported by other companies. In addition, Adjusted EBITDA has material limitations as a performance measure because it excludes interest expense, income tax expense and depreciation and amortization which are necessary to operate the Company's business or which the Company otherwise incurred or experienced in connection with the operation of its business.
The Company believes that Adjusted income from operations, which excludes other operating credits and charges, net, adjusted for a normalized tax rate is a useful measure for evaluating our ability to generate earnings and that providing this measure will allow investors to more readily compare the earnings referred to in the press release to the Company's earnings for past and future periods. The Company believes that this measure is particularly useful where the amounts of the excluded items are not consistent between the periods presented. It should be noted that other companies may present similarly-titled measures differently and, therefore, as presented by the Company may not be comparable to similarly-titled measures reported by other companies. In addition, Adjusted income from operations has material limitations as a performance measure because it excludes items that are actually incurred or experienced in connection with the operations of the Company's business.
Item 9.01. Financial Statements and Exhibits
(d) Exhibit Index
| Exhibit | Description | ||||
| 99.1 | |||||
| 99.2 | |||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: February 14, 2023
CLEARWATER PAPER CORPORATION
| By: | /s/ Rebecca A. Barckley | ||||
| Rebecca A. Barckley, Vice President, Corporate Controller | |||||
| (Principal Accounting Officer) | |||||
Exhibit 99.1
Clearwater Paper Reports Fourth Quarter and Year End 2022 Results
SPOKANE, Wash.--(BUSINESS WIRE)-- February 14, 2023 -- Clearwater Paper Corporation (NYSE:CLW), a premier supplier of quality consumer tissue and bleached paperboard today reported financial results for the fourth quarter and year ended December 31, 2022.
2022 FOURTH QUARTER HIGHLIGHTS
•Operational and weather-related issues impacted paperboard operations
•Completed planned major maintenance at the Lewiston, Idaho facility
•Net loss of $6 million, or $0.34 per diluted share and Adjusted EBITDA of $28 million
•Net sales of $527 million, up 8% compared to the fourth quarter of 2021
2022 FULL YEAR HIGHLIGHTS
•Delivered strong performance due to robust demand for paperboard products
•Net income of $46 million
•Adjusted EBITDA of $227 million
•Net sales of $2.1 billion, up 17% compared to 2021 due to higher pricing and stronger tissue volumes
•Net debt reduction of $108 million in the year, $377 million since 2020
“We had a very good year, with strong results in paperboard and improvements in tissue. We continued to reduce net debt and improved our overall financial flexibility,” said Arsen Kitch, president and chief executive officer. “During the fourth quarter, we were impacted by operational and weather-related issues, which have subsequently been resolved.”
OVERALL RESULTS
For the fourth quarter of 2022, Clearwater Paper reported net sales of $527 million, an 8% increase compared to net sales of $490 million reported in the fourth quarter of 2021. Net loss for the fourth quarter of 2022 was $6 million, or $0.34 per diluted share, compared to net income in the fourth quarter of 2021 of $10 million, or $0.56 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net loss in the fourth quarter of 2022 of $5 million, or $0.30 per diluted share, compared to fourth quarter 2021 adjusted net income of $14 million, or $0.82 per diluted share. Adjusted EBITDA for the quarter was $28 million compared to the fourth quarter of 2021 Adjusted EBITDA of $56 million.
For the full year 2022, Clearwater Paper reported net sales of $2.1 billion, a 17% increase compared to net sales of $1.8 billion for 2021. Net income for the full year was $46 million or $2.68 per diluted share, compared to a net loss for 2021 of $28 million or $1.67 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income for 2022 of $62 million, or $3.63 per diluted share, compared to 2021 adjusted net income of $17 million, or $1.03 per diluted share. Adjusted EBITDA for 2022 was $227 million, compared to 2021 Adjusted EBITDA of $175 million.
Pulp and Paperboard Segment
Net sales in the Pulp and Paperboard segment were $274 million for the fourth quarter of 2022, up 5% compared to fourth quarter 2021 net sales of $261 million. Segment operating income for the fourth quarter of 2022 was $18 million compared to $53 million for the fourth quarter of 2021. Adjusted EBITDA for the segment was $27 million in the fourth quarter of 2022, compared to $62 million in the fourth quarter of 2021. The decrease in operating income and Adjusted EBITDA was driven by planned major maintenance at our Lewiston, Idaho facility, operational issues at both mills and a weather event at our Cypress Bend, Arkansas facility, and higher input costs specifically related to chemicals and energy, partially offset by higher sales prices.
Net sales in the Pulp and Paperboard segment were $1.1 billion for 2022, an increase of 20% compared to 2021 net sales of $946 million. Segment operating income for 2022 was $183 million compared to $126 million for 2021. Adjusted EBITDA for the segment was $220 million for 2022, compared to $161 million for 2021. The increase in operating income and Adjusted EBITDA was driven by higher sales prices, partly offset by higher input costs specifically related to fiber, chemicals,
freight and energy and higher outage costs as well as operational issues.
Pulp and Paperboard Sales Volumes and Prices:
• Paperboard sales volumes were 188,999 tons in the fourth quarter of 2022, a decrease of 11% compared to 211,503 tons in the fourth quarter of 2021. Paperboard sales volumes were 814,556 tons for the year ended 2022 compared to 822,206 tons for the year ended 2021.
• Paperboard average net selling price increased 23% to $1,429 per ton for the fourth quarter of 2022, compared to $1,164 per ton in the fourth quarter of 2021. Paperboard average net selling price increased 25% to $1,356 per ton for the year ended 2022, compared to $1,088 per ton for the year ended 2021.
Consumer Products Segment
Net sales in the Consumer Products segment were $254 million for the fourth quarter of 2022, up 10% compared to the fourth quarter 2021 net sales of $232 million. In the fourth quarter of 2022, retail converted case shipments were 13.0 million cases, a increase of 5% compared to the 12.4 million cases shipped in the fourth quarter of 2021. Segment operating income for the fourth quarter of 2022 was $2 million compared to operating loss of $8 million in the fourth quarter of 2021. Adjusted EBITDA for the segment was $18 million in the fourth quarter of 2022, up from $8 million in the fourth quarter of 2021. The increase in operating income and Adjusted EBITDA was driven by higher sales prices and volumes partially offset by higher input costs, primarily pulp and energy along with general inflation for other input costs.
Net sales in the Consumer Products segment were $950 million for the full year 2022, up 14% compared to 2021 net sales of $835 million. For 2022, retail converted case shipments were 50 million cases, an increase of 10% compared to 46 million cases shipped for 2021. Segment operating income for 2022 was $11 million, compared to operating income of $4 million for 2021. Adjusted EBITDA for the segment was $74 million for 2022, an increase from $69 million for 2021. The increase in operating income and Adjusted EBITDA was driven by higher sales prices and increased volume partially offset by higher input costs, primarily related to pulp, energy and freight.
Retail Tissue Sales Volumes and Prices:
• Retail tissue volumes sold were 80,766 tons in the fourth quarter of 2022, a increase of 2% compared to 79,491 tons in the fourth quarter of 2021. Retail tissue volumes sold were 309,735 tons for the year ended of 2022, a increase of 8% compared to 287,987 tons for 2021.
• Retail tissue average net selling prices increased 9% to $3,095 per ton in the fourth quarter of 2022, compared to $2,831 per ton in the fourth quarter of 2021. Retail tissue average net selling prices increased 9% to $3,010 per ton for 2022, compared to $2,771 per ton for 2021.
COMPANY OUTLOOK
“Our focus in 2023 is on improving our operational performance while continuing to generate strong free cash flows,” said Arsen Kitch, president and chief executive officer. “Our businesses have proven to be economically resilient, and we are well positioned to deliver strong results this year.”
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/investors/events-and-presentations beginning at 5:00 p.m. Pacific Time today.
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 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 relationships through quality and service.
USE OF NON-GAAP MEASURES
In this press release, the company presents certain non-GAAP financial information for the fourth quarter and full year 2022 and 2021, including adjusted net income (loss), adjusted net income (loss) per diluted share and Adjusted EBITDA. Because these amounts are not in accordance with GAAP, reconciliations to net income (loss) as determined in accordance with GAAP are included in the tables at the end of this press release. The company presents these non-GAAP amounts because management believes they assist investors and analysts in comparing the company's performance across reporting periods on a consistent basis by excluding items that the company does not believe are indicative of its core operating performance. In addition, the company uses 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 inflation, our expectations regarding the paperboard and tissue markets, operational and financial performance, cash flow generation and ability to execute into the first quarter and 2023. 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 our products, including as a result of capacity additions, demand reduction and the impact of foreign currency fluctuations on the pricing of products globally; changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate; manufacturing or operating disruptions, including equipment malfunctions and damage to our manufacturing facilities; the loss of, changes in prices in regard to, or reduction in, orders from a significant customer; changes in the cost and availability of wood fiber and wood pulp; changes in energy, chemicals, packaging and freight costs and disruptions in transportation services impacting our ability to receive inputs or ship products to customers; reliance on a limited number of third-party suppliers, vendors and service providers required for the production of our products and our operations; changes in customer product preferences and competitors' product offerings; cyber-security risks; larger competitors having operational, financial and other advantages; consolidation and vertical integration of converting operations in the paperboard industry; our ability to successfully execute capital projects and other activities to operate our assets, including effective maintenance, implement our operational efficiencies and realize higher throughput or lower costs; IT system disruptions and IT system implementation failures; labor disruptions; cyclical industry conditions; changes in expenses, required contributions and potential withdrawal costs associated with our pension plans; environmental liabilities or expenditures and climate change; our ability to attract, motivate, train and retain qualified and key personnel; ability to service our debt obligations and restrictions on our business from debt covenants and terms; changes in our banking relations, or in our customer supply chain financing negative changes in our credit agency ratings; changes in laws, regulations or industry standards affecting our 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, 2022. 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) | |||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
| (In millions, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net sales | $ | 526.7 | $ | 489.8 | $ | 2,080.1 | $ | 1,772.6 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of sales | 491.4 | 429.1 | 1,823.4 | 1,590.0 | |||||||||||||||||||
| Selling, general and administrative expenses | 33.5 | 30.5 | 133.0 | 112.9 | |||||||||||||||||||
| Other operating charges, net | 1.2 | 2.6 | 9.7 | 57.7 | |||||||||||||||||||
| Total operating costs and expenses | 526.1 | 462.2 | 1,966.2 | 1,760.6 | |||||||||||||||||||
| Income from operations | 0.6 | 27.6 | 113.9 | 12.0 | |||||||||||||||||||
| Interest expense, net | (7.3) | (8.9) | (34.6) | (36.4) | |||||||||||||||||||
| Debt retirement costs | — | (0.5) | (0.5) | (1.0) | |||||||||||||||||||
| Other non-operating expense | (1.4) | (2.6) | (5.7) | (10.4) | |||||||||||||||||||
| Total non-operating expense | (8.8) | (12.0) | (40.9) | (47.7) | |||||||||||||||||||
| Income (loss) before income taxes | (8.2) | 15.6 | 73.1 | (35.7) | |||||||||||||||||||
| Income tax provision (benefit) | (2.3) | 6.1 | 27.0 | (7.7) | |||||||||||||||||||
| Net income (loss) | $ | (5.9) | $ | 9.6 | $ | 46.0 | $ | (28.1) | |||||||||||||||
| Net income (loss) per common share: | |||||||||||||||||||||||
| Basic | $ | (0.35) | $ | 0.57 | $ | 2.71 | $ | (1.67) | |||||||||||||||
| Diluted | (0.34) | 0.56 | 2.68 | (1.67) | |||||||||||||||||||
| Average shares outstanding (in thousands): | |||||||||||||||||||||||
| Basic | 16,974 | 16,761 | 16,985 | 16,767 | |||||||||||||||||||
| Diluted | 17,204 | 17,149 | 17,181 | 16,767 | |||||||||||||||||||
| Clearwater Paper Corporation | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| (In millions) | December 31, 2022 | December 31, 2021 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 53.7 | $ | 25.2 | ||||
| Receivables, net | 188.8 | 167.4 | ||||||
| Inventories, net | 324.0 | 277.7 | ||||||
| Other current assets | 19.9 | 16.9 | ||||||
| Total current assets | 586.3 | 487.2 | ||||||
| Property, plant and equipment, net | 1,017.1 | 1,081.8 | ||||||
| Other assets, net | 100.1 | 121.1 | ||||||
| Total Assets | $ | 1,703.5 | $ | 1,690.1 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 0.9 | $ | 1.6 | ||||
| Accounts payable and accrued liabilities | 311.1 | 252.5 | ||||||
| Total current liabilities | 312.0 | 254.1 | ||||||
| Long-term debt | 564.9 | 637.6 | ||||||
| Liability for pension and other postretirement employee benefits | 58.2 | 73.6 | ||||||
| Deferred tax liabilities and other long-term obligations | 196.4 | 213.1 | ||||||
| Total Liabilities | 1,131.5 | 1,178.3 | ||||||
| Common Stock | — | — | ||||||
| Additional paid-in capital | 28.5 | 23.6 | ||||||
| Retained earnings | 576.8 | 530.7 | ||||||
| Accumulated other comprehensive loss, net of tax | (33.3) | (42.6) | ||||||
| Total Stockholders' Equity | 572.1 | 511.7 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 1,703.5 | $ | 1,690.1 | ||||
| Clearwater Paper Corporation | |||||||||||||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
| (In millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Operating Activities | |||||||||||||||||||||||
| Net income (loss) | $ | (5.9) | $ | 9.6 | $ | 46.0 | $ | (28.1) | |||||||||||||||
| Adjustments to reconcile net income (loss) to net cash flows provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 25.9 | 25.4 | 103.3 | 105.0 | |||||||||||||||||||
| Equity-based compensation expense | 3.1 | 2.2 | 12.7 | 9.1 | |||||||||||||||||||
| Deferred taxes | (2.2) | 9.7 | (7.9) | (9.7) | |||||||||||||||||||
| Defined benefit pension and other postretirement employee benefits | 0.8 | 1.9 | 3.0 | 7.2 | |||||||||||||||||||
| Amortization of deferred debt costs and debt retirement | 0.2 | 0.9 | 2.0 | 2.8 | |||||||||||||||||||
(Gain) loss on sale or impairment associated with assets | 0.3 | (1.4) | 6.1 | 35.7 | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| (Increase) decrease in accounts receivable | 0.7 | (5.2) | (16.9) | (5.3) | |||||||||||||||||||
| (Increase) decrease in inventory | 2.8 | 8.1 | (46.3) | (20.2) | |||||||||||||||||||
| Increase in other current assets | (8.0) | (7.0) | (2.4) | (1.7) | |||||||||||||||||||
| Increase (decrease) in accounts payable and accrued liabilities | (0.8) | (11.9) | 49.2 | 1.9 | |||||||||||||||||||
| Other, net | 0.4 | (0.2) | 1.5 | (0.2) | |||||||||||||||||||
| Net cash flows provided by operating activities | 17.4 | 32.1 | 150.2 | 96.4 | |||||||||||||||||||
| Investing Activities | |||||||||||||||||||||||
| Additions to property, plant and equipment | (13.5) | (8.5) | (33.5) | (38.4) | |||||||||||||||||||
| Net proceeds from divested assets | — | 13.3 | — | 13.3 | |||||||||||||||||||
| Net cash flows provided by (used in) investing activities | (13.5) | 4.8 | (33.5) | (25.1) | |||||||||||||||||||
| Financing Activities | |||||||||||||||||||||||
| Repayments of long-term debt | (0.1) | (39.7) | (80.9) | (81.0) | |||||||||||||||||||
| Taxes paid related to net share settlement of equity awards | — | — | (2.5) | (1.7) | |||||||||||||||||||
| Repurchases of common stock | — | — | (5.0) | — | |||||||||||||||||||
| Payments for debt issuance costs | (0.9) | — | (0.9) | — | |||||||||||||||||||
| Other, net | — | 0.2 | 0.8 | 0.7 | |||||||||||||||||||
| Net cash flows used in financing activities | (1.0) | (39.5) | (88.6) | (82.0) | |||||||||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 2.9 | (2.6) | 28.2 | (10.7) | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 51.5 | 28.9 | 26.2 | 36.9 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 54.4 | $ | 26.2 | $ | 54.4 | $ | 26.2 | |||||||||||||||
| Clearwater Paper Corporation | ||||||||||||||||||||||||||||||||
| Segment Information | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||||||
| (In millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||
| Segment net sales: | ||||||||||||||||||||||||||||||||
| Pulp and Paperboard | $ | 273.5 | $ | 261.3 | $ | 1,136.3 | $ | 946.0 | ||||||||||||||||||||||||
| Consumer Products | 254.1 | 231.8 | 950.2 | 835.0 | ||||||||||||||||||||||||||||
| Eliminations | (0.9) | (3.3) | (6.4) | (8.4) | ||||||||||||||||||||||||||||
| Total segment net sales | $ | 526.7 | $ | 489.8 | $ | 2,080.1 | $ | 1,772.6 | ||||||||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||||||||||||||
| Pulp and Paperboard | $ | 17.5 | $ | 53.1 | $ | 183.5 | 125.7 | |||||||||||||||||||||||||
| Consumer Products | 1.6 | $ | (7.5) | 11.3 | 4.0 | |||||||||||||||||||||||||||
| Corporate and eliminations | (17.3) | (15.3) | (71.1) | (60.1) | ||||||||||||||||||||||||||||
Other operating charges, net 1 | $ | (1.2) | (2.6) | (9.7) | (57.7) | |||||||||||||||||||||||||||
| Income from operations | $ | 0.6 | $ | 27.6 | $ | 113.9 | $ | 12.0 | ||||||||||||||||||||||||
1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 8 within Clearwater Paper's Form 10-K filed with the SEC for the year ended December 31, 2022 for the detailed breakout of the annual amount.
| Clearwater Paper Corporation | |||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||
| Adjusted EBITDA | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
| (In millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net income (loss) | $ | (5.9) | $ | 9.6 | $ | 46.0 | $ | (28.1) | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax provision (benefit) | (2.3) | 6.1 | 27.0 | (7.7) | |||||||||||||||||||
| Interest expense, net | 7.3 | 8.9 | 34.6 | 36.4 | |||||||||||||||||||
| Depreciation and amortization expense | 25.9 | 25.4 | 103.3 | 105.0 | |||||||||||||||||||
Other operating charges, net1 | 1.2 | 2.6 | 9.7 | 57.7 | |||||||||||||||||||
| Other non-operating expense | 1.4 | 2.6 | 5.7 | 10.4 | |||||||||||||||||||
| Debt retirement costs | — | 0.5 | 0.5 | 1.0 | |||||||||||||||||||
| Adjusted EBITDA | $ | 27.8 | $ | 55.6 | $ | 226.9 | $ | 174.6 | |||||||||||||||
| Pulp and Paperboard segment income | $ | 17.5 | $ | 53.1 | $ | 183.5 | $ | 125.7 | |||||||||||||||
| Depreciation and amortization expense | 9.2 | 8.8 | 37.0 | 35.7 | |||||||||||||||||||
| Adjusted EBITDA Pulp and Paperboard segment | $ | 26.7 | $ | 61.9 | $ | 220.4 | $ | 161.4 | |||||||||||||||
| Consumer Products segment income (loss) | $ | 1.6 | $ | (7.5) | $ | 11.3 | $ | 4.0 | |||||||||||||||
| Depreciation and amortization expense | 16.0 | 15.5 | 62.9 | 64.9 | |||||||||||||||||||
| Adjusted EBITDA Consumer Products segment | $ | 17.6 | $ | 8.0 | $ | 74.2 | $ | 69.0 | |||||||||||||||
| Corporate and other expenses | $ | (17.3) | $ | (15.3) | $ | (71.1) | $ | (60.1) | |||||||||||||||
| Depreciation and amortization expense | 0.8 | 1.1 | 3.4 | 4.4 | |||||||||||||||||||
| Corporate Adjusted EBITDA | $ | (16.6) | $ | (14.3) | $ | (67.7) | $ | (55.7) | |||||||||||||||
| Pulp and Paperboard segment | $ | 26.7 | $ | 61.9 | $ | 220.4 | $ | 161.4 | |||||||||||||||
| Consumer Products segment | 17.6 | 8.0 | 74.2 | 69.0 | |||||||||||||||||||
| Corporate and other | (16.6) | (14.3) | (67.7) | (55.7) | |||||||||||||||||||
| Adjusted EBITDA | $ | 27.8 | $ | 55.6 | $ | 226.9 | $ | 174.6 | |||||||||||||||
1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 8 within Clearwater Paper's Form 10-K filed with the SEC for the year ended December 31, 2022 for the detailed breakout of the annual amount.
| Clearwater Paper Corporation | |||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||
| Adjusted Net Income | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
| (In millions, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net income (loss) | $ | (5.9) | $ | 9.6 | $ | 46.0 | $ | (28.1) | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax provision (benefit) | (2.3) | 6.1 | 27.0 | (7.7) | |||||||||||||||||||
| Income (loss) before income taxes | (8.2) | 15.6 | 73.1 | (35.7) | |||||||||||||||||||
| Add back: | |||||||||||||||||||||||
| Debt retirement costs | — | 0.5 | 0.5 | 1.0 | |||||||||||||||||||
| Other operating charges, net | 1.2 | 2.6 | 9.7 | 57.7 | |||||||||||||||||||
| Adjusted income (loss) before tax | (6.9) | 18.7 | 83.3 | 22.9 | |||||||||||||||||||
| Normalized income provision (benefit) | (1.7) | 4.7 | 20.8 | 5.7 | |||||||||||||||||||
| Adjusted net income (loss) | $ | (5.2) | $ | 14.1 | $ | 62.5 | $ | 17.2 | |||||||||||||||
| Weighted average diluted shares (in thousands) | 17,204 | 17,149 | 17,181 | 16,767 | |||||||||||||||||||
| Adjusted net income (loss) per share, diluted | $ | (0.30) | $ | 0.82 | $ | 3.63 | $ | 1.03 | |||||||||||||||
| Calculation of net debt: | December 31, 2022 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||
| Current portion of long-term debt | $ | 0.9 | $ | 1.0 | $ | 1.6 | |||||||||||||||||
| Long-term debt | 564.9 | 564.9 | 637.6 | ||||||||||||||||||||
| Add back: | |||||||||||||||||||||||
| Unamortized deferred debt costs | 3.4 | 3.6 | 4.8 | ||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Financing leases | 24.2 | 24.4 | 19.1 | ||||||||||||||||||||
| Cash and cash equivalents | 53.7 | 50.8 | 25.2 | ||||||||||||||||||||
| Net debt | $ | 491.3 | $ | 494.2 | $ | 599.8 | |||||||||||||||||
Clearwater Paper Corporation
Investors contact:
Sloan Bohlen
Solebury Trout
509.344.5906
News media:
Shannon Myers, Sr. Director, Corporate Communications
Phone: 509-344-5967
shannon.myers@clearwaterpaper.com
investorinfo@clearwaterpaper.com
CLEARWATER PAPER CORPORATION FOURTH QUARTER EARNINGS RELEASE MATERIALS FEBRUARY 14, 2023 ARSEN S. KITCH President, Chief Executive Officer And Director MICHAEL J. MURPHY Senior Vice President And Chief Financial Officer
Cautionary Statement Regarding Forward Looking Statements This presentation of supplemental information contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding order patterns; product demand and industry trends; production targets; impact of announced price increases, including expectations of implementation; impact of inflation of raw material, energy and freight costs; assumptions for Q1 2023 and full year 2023, including maintenance outage impacts, operational factors, interest, capital, inflation, depreciation and amortization and income tax; our capital allocation objectives; our strategy, including achieving target level ratio, maintaining liquidity, and prioritizing free cash flow; expectations regarding the paperboard markets and tissue markets; and repurchases under existing share buyback authorization. These forward-looking statements are based on management’s current expectations, estimates, assumptions and projections that are subject to change. Our actual results of operations may differ materially from those expressed or implied by the forward-looking statements contained in this presentation. Important factors that could cause or contribute to such differences include the risks and uncertainties described from time to time in the Company's public filings with the Securities and Exchange Commission, including but not limited to the following: competitive pricing pressures for our products, including as a result of increased capacity as additional manufacturing facilities are operated by our competitors and the impact of foreign currency fluctuations on the pricing of products globally; the loss of, changes in prices in regard to, or reduction in, orders from a significant customer; changes in the cost and availability of wood fiber and wood pulp; changes in transportation costs and disruptions in transportation services; changes in customer product preferences and competitors' product offerings; larger competitors having operational and other advantages; consolidation and vertical integration of converting operations in the paperboard industry; changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate; manufacturing or operating disruptions, including equipment malfunctions and damage to our manufacturing facilities; cyber-security risks; labor disruptions; cyclical industry conditions; changes in expenses, required contributions and potential withdrawal costs associated with our pension plans; environmental liabilities or expenditures and climate change; reliance on a limited number of third-party suppliers for raw materials; our ability to attract, motivate, train and retain qualified and key personnel; ability to service our debt obligations; restrictions on our business from debt covenants and terms; changes in our banking relations; negative changes in our credit agency ratings; and changes in laws, regulations or industry standards affecting our business. Forward- looking statements contained in this presentation present management’s views only as of the date of this presentation. We undertake no obligation to publicly update forward-looking statements or to retract future revisions of management's views based on events or circumstances occurring after the date of this presentation. Non-GAAP Financial Measures This presentation include certain financial measures that are not calculated in accordance with GAAP, including Adjusted EBITDA, Adjusted Income, Adjusted income per diluted share, free cash flow and net debt. The Company’s management believes that the presentation of these financial measures provides useful information to investors because these measures are regularly used by management in assessing the Company’s performance. These financial measures shou ld be considered in addition to results prepared in accordance with GAAP but should not be considered substitutes for or superior to GAAP results. In addition, these non-GAAP financial measures may not be comparable to similarly-titled measures utilized by other companies, since such other companies may not calculate such measure in the same manner as we do. A reconciliation of these measures (Adjusted EBITDA, Adjusted Income, Adjusted income per share, free cash flow and net debt) to the most relevant GAAP measure is available in the appendix of this presentation. FORWARD LOOKING STATEMENTS © Clearwater Paper Corporation 2023 2
Overall • Net sales $527 million for Q4, $2.1 billion for 2022 • Net loss $6 million for Q4, net income $46 million for 2022 • Adjusted net loss $5 million for Q4, adjusted net income $63 million for 2022 • Adjusted EBITDA $28 million for Q4, $227 million for 2022 • Inflation pressures across both businesses Pulp and Paperboard • SBS prices increased, partly offset by inflation • Completion of Lewiston major maintenance ($28 million Adjusted EBITDA impact) Consumer Products • Tissue prices increased, offset by inflation • Demand for private branded products increasing Capital Structure • Reduced net debt by $108 million for 2022 • Continued to maintain strong financial flexibility Q4 2022 AND FULL YEAR 2022 BUSINESS HIGHLIGHTS © Clearwater Paper Corporation 2023 3
Industry • Demand and order backlogs moderated later in the year • While inflation and economic uncertainty exist, end markets tend to be economically resilient • RISI reported market price increases • $250/ton in 2021, $100/ton in Q1 2022, $100/ton in Q2 2022 and $30/ton in Q4 2022 Clearwater Paper • Demand and order backlogs moderated • Continued benefits from previously announced price increases • Inflation across raw materials and energy • Lewiston outage was $5 million above estimates, operational and weather related issues impacted mills • Next Lewiston major maintenance outage anticipated in early 2024 BUSINESS UPDATE – PULP AND PAPERBOARD PRICING OFFSETTING INFLATION, DRIVING STRONG RESULTS © Clearwater Paper Corporation 2023 4
Industry • Consumers shifting to private brands with economic uncertainty and inflation • Private brand market share rising to 35.5%1 Clearwater Paper • Strong demand with Q4 2022 shipments of 13.0 million cases compared to 12.4 million in Q4 2021 • Solid operational performance • Inflation across raw materials and energy • Implementing previously announced price increases BUSINESS UPDATE – CONSUMER PRODUCTS SHIPMENTS STRENGTHEN © Clearwater Paper Corporation 2023 5 1 IRI panel data for dollar share as of January 2023
© Clearwater Paper Corporation 2023 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 2022 2021 Net sales 526.7$ 489.8$ 2,080.1$ 1,772.6$ Cost of sales 491.4 429.1 1,823.4 1,590.0 Selling, general and adminstrative 33.5 30.5 133.0 112.9 Other operating charges, net 1.2 2.6 9.7 57.7 Income from operations 0.6 27.6 113.9 12.0 Non-operating expense (8.8) (12.0) (40.9) (47.7) Income tax provision (benefit) (2.3) 6.1 27.0 (7.7) Net income (loss) (5.9)$ 9.6$ 46.0$ (28.1)$ Diluted income (loss) per share (0.34)$ 0.56$ 2.68$ (1.67)$ Adjusted income (loss) per share (0.30)$ 0.82$ 3.63$ 1.03$ Adjusted EBITDA 27.8$ 55.6$ 226.9$ 174.6$ Quarter Ended Dec. 31, Year Ended Dec. 31, 6
© Clearwater Paper Corporation 2023 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 2022 2021 2022 2021 Net Sales Pulp and Paperboard 273.5$ 261.3$ 1,136.3$ 946.0$ Consumer Products 254.1 231.8 950.2 835.0 Eliminations (0.9) (3.3) (6.4) (8.4) 526.7$ 489.8$ 2,080.1$ 1,772.6$ Operating Income Pulp and Paperboard 17.5$ 53.1$ 183.5$ 125.7$ Consumer Products 1.6 (7.5) 11.3 4.0 Corporate and other (17.3) (15.3) (71.1) (60.1) Other operating charges, net (1.2) (2.6) (9.7) (57.7) 0.6$ 27.6$ 113.9$ 12.0$ Adjusted EBITDA Pulp and Paperboard 26.7$ 61.9$ 220.4$ 161.4$ Consumer Products 17.6 8.0 74.2 69.0 Corporate and other (16.6) (14.3) (67.7) (55.7) 27.8$ 55.6$ 226.9$ 174.6$ Quarter Ended Dec. 31, Year Ended Dec. 31, 7
PULP AND PAPERBOARD Q4 2022 RESULTS Q4 2022 VS. Q4 2021 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 8 SEGMENT INCOME SEGMENT ADJUSTED EBITDA Note: Q4’22 had a major maintenance outage which impacted Adjusted EBITDA by $28 million and we had no major maintenance outages in prior period.
PULP AND PAPERBOARD FULL YEAR 2022 RESULTS 2022 VS. 2021 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 9 SEGMENT INCOME SEGMENT ADJUSTED EBITDA
CONSUMER PRODUCTS Q4 2022 RESULTS Q4 2022 VS. Q4 2021 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 10 SEGMENT INCOME (LOSS) SEGMENT ADJUSTED EBITDA
CONSUMER PRODUCTS FULL YEAR 2022 RESULTS 2022 VS. 2021 SEGMENT RESULTS(1) ($ IN MILLIONS) © Clearwater Paper Corporation 2023 11 SEGMENT INCOME (LOSS) SEGMENT ADJUSTED EBITDA (1) Previously reported quarterly bridges may not agree to full year due to changes in calculations during the period.
© Clearwater Paper Corporation 2023 CAPITAL STRUCTURE AND ALLOCATION Capital structure summary: • Ample liquidity • No material near-term debt maturities • Corporate/Issuer ratings: Ba2/BB- • Net debt to Adjusted EBITDA ratio of 2.27x at year end 2022 $0.0 $0.0 $270.0 $0.0 $0.0 $0.0 2023 2024 2025 2026 2027 2028 Scheduled Debt Maturity Profile ($ in millions)2 Liquidity Profile ($ in millions)1 ABL Availability $267.9 Less Utilization (3.5) Plus Unrestricted Cash 53.7 Liquidity $318.1 1. ABL availability based on borrowing base calculations and consolidated balance sheet as of December 31, 2022, and utilization includes ABL borrowing of $0 million and outstanding letters of credit of $3.5 million. 2. This chart excludes finance leases as of December 31, 2022. Current debt maturities include $270 million of 5.375% notes due 2025 and $275 million of 4.75% notes due 2028. 12
OUTLOOK FOR Q1 AND 2023 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2023 Q1 2023: $65 to $75 million of Adjusted EBITDA • $42 million benefit due to no major maintenance outages and lower impact from operational issues • Previously announced price increases and mix largely offsetting cost inflation • Paperboard volumes higher, tissue volumes flat 2023 Operational Assumptions vs. 2022 • $42 million benefit due to fewer major maintenance outages and better operating performance • Previously announced price increases and mix largely offsetting cost inflation 2023 Other • Interest expense: $27 to $29 million • Depreciation and amortization expense: $98 to $101 million • CAPEX: $70 to $80 million • Taxes: effective rate ~ 25 - 26% 13
CAPITAL ALLOCATION PRIORITIES © Clearwater Paper Corporation 2022 • Invest capital to sustain current asset base • $60 to $70 million per year outside of major projects Sustain the business Preserve financial flexibility Enhance value DISCIPLINED APPROACH TO CAPITAL ALLOCATION 1 2 3 14 • Reduce leverage to increase flexibility • Target net leverage ratio around 2.5x through a cycle • Support financing of future value creating options • Invest capital to improve asset base • Opportunistic acquisitions • Share buybacks to offset dilution and opportunistically add value
APPENDIX © Clearwater Paper Corporation 2022 15
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q4 2022 VS. Q3 2022 SEGMENT RESULTS © Clearwater Paper Corporation 2023 16 SEGMENT INCOME SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Note: Q4’22 had a major maintenance outage which impacted Adjusted EBITDA by $28 million and we had no major maintenance outages in prior period.
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q4 2022 VS. Q3 2022 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 17 SEGMENT INCOME SEGMENT ADJUSTED EBITDA
KEY SEGMENT INFORMATION 1. Includes both retail and away-from-home (AFH) cases. AFH was exited in Q3, 2021. 1.5 million in 2020 and 0.8 million in 2021. 2. Non-retail includes away-from-home and parent rolls. Q4’2020 Q1’2021 Q2’2021 Q3’2021 Q4’2021 Q1’2022 Q2’2022 Q3’2022 Q4’2022 Pulp and Paperboard Sales ($ millions) $220.4 $219.7 $227.4 $237.5 $261.3 $266.2 $295.8 $300.8 $273.5 Adjusted EBITDA ($ millions) $42.8 $34.0 $22.0 $43.5 $61.9 $59.5 $61.2 $73.0 $26.7 Paperboard shipments (short tons) 206.2 206.7 200.6 203.4 211.5 201.4 215.9 208.3 189.0 Paperboard sales price ($/short ton) $ 1,002 $1,028 $1,058 $1,102 $1,164 $1,263 $1,332 $1,405 $1,429 Consumer Products Sales ($ millions) $238.9 $208.4 $180.7 $214.2 $231.8 $223.0 $232.1 $240.9 $254.1 Adjusted EBITDA ($ millions) $44.7 $34.7 $6.7 $19.6 $8.0 $16.2 $19.1 $21.2 $17.6 Shipments Retail (short tons in thousands) 83.3 70.8 61.5 76.2 79.4 75.4 76.6 76.9 80.8 Non-Retail (short tons in thousands) 6.5 9.4 7.4 5.7 6.2 5.1 2.6 2.3 2.2 Converted Products (cases in millions)1 13.9 11.7 10.2 12.3 12.4 12.0 12.6 12.6 13.0 Sales Price ($ per short ton) Retail $ 2,745 $ 2,758 $2,755 $2,732 $2,831 $2,872 $2,984 $3,082 $3,095 Non-Retail2 $ 1,552 $ 1,404 $1,508 $988 $1,054 $1,143 $1,365 $1,333 $1,394 Production Converted Products (cases in millions) 13.9 13.5 9.6 11.4 11.9 12.2 12.1 12.9 12.3 © Clearwater Paper Corporation 2023 18
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) September 30, 2022 2021 2022 2022 2021 Net income $ (5.9) $ 9.6 $ 20.6 $ 46.0 $ (28.1) Income tax provision (benefit) (2.3) 6.1 18.9 27.0 (7.7) Interest expense, net 7.3 8.9 8.0 34.6 36.4 Depreciation and amortization expense 25.9 25.4 26.2 103.3 105.0 Other operating charges, net 1.2 2.6 2.2 9.7 57.7 Other non-operating expense 1.4 2.6 1.4 5.7 10.4 Debt retirement costs - 0.5 - 0.5 1.0 Adjusted EBITDA $ 27.8 $ 55.6 $ 77.3 $ 226.9 $ 174.6 Pulp and Paperboard segment income $ 17.5 $ 53.1 $ 63.7 $ 183.5 $ 125.7 Depreciation and amortization 9.2 8.8 9.3 37.0 35.7 Adjusted EBITDA Paperboard segment $ 26.7 $ 61.9 $ 73.0 $ 220.4 $ 161.4 Consumer Products segment income $ 1.6 $ (7.5) $ 5.2 $ 11.3 $ 4.0 Depreciation and amortization 16.0 15.5 16.0 62.9 64.9 Adjusted EBITDA Consumer Products segment $ 17.6 $ 8.0 $ 21.2 $ 74.2 $ 69.0 Corporate and other expense $ (17.3) $ (15.3) $ (17.8) $ (71.1) $ (60.1) Depreciation and amortization 0.8 1.1 0.9 3.4 4.4 Adjusted EBITDA Corporate and other $ (16.6) $ (14.3) $ (16.9) $ (67.7) $ (55.7) Pulp and Paperboard segment $ 26.7 $ 61.9 $ 73.0 $ 220.4 $ 161.4 Consumer Products segment 17.6 8.0 21.2 74.2 69.0 Corporate and other (16.6) (14.3) (16.9) (67.7) (55.7) Adjusted EBITDA $ 27.8 $ 55.6 $ 77.3 $ 226.9 $ 174.6 December 31, December 31, Year EndedQuarter Ended © Clearwater Paper Corporation 2023 19
© Clearwater Paper Corporation 2023 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 2022 2021 Net income (loss) (5.9)$ 9.6$ 46.0$ (28.1)$ Add back: Income tax provision (benefit) (2.3) 6.1 27.0 (7.7) Income (loss) before income taxes (8.2) 15.6 73.1 (35.7) Add back: Debt retirement costs - 0.5 0.5 1.0 Other operating charges, net 1.2 2.6 9.7 57.7 Adjusted income before tax (6.9) 18.7 83.3 22.9 Normalized income tax provision (benefit) (1.7) 4.7 20.8 5.7 Adjusted income (5.2)$ 14.1$ 62.5$ 17.2$ Weighted average diluted shares (thousands) 17,204 17,149 17,181 16,767 Adjusted income per diluted share (0.30)$ 0.82$ 3.63$ 1.03$ Year Ended December 31,Quarter Ended December 31, 20
ADDITIONAL RECONCILIATIONS Net Debt Mar 31, 2021 June 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 June 30, 2022 Sept 30, 2022 Dec 31, 2022 Cash $ 57.1 $ 60.9 $ 27.8 $ 25.2 $ 36.4 $69.5 $50.8 $53.7 Current debt 1.7 1.7 1.6 1.6 1.6 1.0 1.0 0.9 Long term debt 716.3 716.2 676.5 637.6 617.7 589.9 564.9 564.9 add: Deferred debt costs 6.6 6.4 5.6 4.8 4.4 3.8 3.6 3.4 less: Financing leases (20.4) (20.0) (19.5) (19.1) (18.7) (24.7) (24.4) (24.2) Subtotal 704.2 704.3 664.2 624.9 605.0 570.0 545.1 545.0 Net debt $ 647.1 $ 643.3 $ 636.4 $ 599.8 $568.6 $500.5 $494.2 $491.3 Free Cash Flow Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Cash from operations $ 33.8 $ 14.8 $ 16.3 $ 32.1 $41.1 $78.5 $13.3 $17.4 Additions to property, plant and equipment, net of proceeds from sales (11.1) (10.5) (8.9) 4.8 (7.9) (5.4) (6.7) (13.5) Free cash flow $ 22.7 $ 4.3 $ 7.4 $ 36.9 $33.2 $73.1 $6.6 $3.9 ($ IN MILLIONS) © Clearwater Paper Corporation 2023 21
$2 $10 $22 $4 $20 $17 $5 $7 $28 $30 $24 $27 $5 - $7 $30 - $35 2017 2018 2019 2020 2021 2022 2023e 2024e Q1 Q2 Q3 Q4 Total $34 MAJOR MAINTENANCE SCHEDULE ADJUSTED EBITDA IMPACT ($ IN MILLIONS) 1. This information is based upon management’s current assumptions and estimates. 2. See “Forward-Looking Statements” on page 2. 1,2 © Clearwater Paper Corporation 2023 22 1