Clearwater Paper Corp 8-K, filed Feb 20, 2024
Clearwater Paper Corp (CLW)
8-K
2024-02-20
For: 2024-02-20
View Original
Added on
April 06, 2026
About this 8-K
Clearwater Paper Corp filed this 8-K on February 20, 2024.
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 20, 2024
(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 20, 2024 , Clearwater Paper Corporation (the “Company”) announced its results of operations for the fourth quarter and year ending December 31, 2023. 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 2023 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 20, 2024
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 2023 Results; Strategic Update
SPOKANE, Wash.--(BUSINESS WIRE)-- February 20, 2024 -- 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, 2023.
2023 FOURTH QUARTER HIGHLIGHTS
•Strong performance driven by solid operational results and continued strength in tissue
•Natural gas disruption impacted Lewiston mill operations in November
•Net income of $18 million, or $1.04 per diluted share and Adjusted EBITDA of $63 million
•Net sales of $513 million, down 3% compared to the fourth quarter of 2022
•Reduced net debt by $32 million, repurchased $3 million of outstanding shares, with $7 million remaining under program
2023 FULL YEAR HIGHLIGHTS
•Outstanding year driven by performance improvement in tissue
•Net income of $108 million, or $6.30 per diluted share and Adjusted EBITDA of $281 million, up $54 million versus 2022
•Net sales of $2.1 billion, flat compared with 2022, strong tissue demand offset softness in paperboard
•Net debt reduction of $89 million, more than $450 million since 2020; completed refinancing of 2014 Notes
•Repurchased $18 million of outstanding shares
STRATEGIC UPDATES
Clearwater Paper announced today that it has signed a definitive agreement to acquire from Graphic Packaging its Augusta, Georgia bleached paperboard manufacturing facility for $700 million, subject to customary adjustments. The facility is a well-invested site with approximately 600 thousand tons of bleached paperboard annual capacity. Clearwater Paper expects this acquisition to contribute $140-150 million1 in Adjusted EBITDA annually by the end of 2026, including through volume and cost synergies. The transaction is subject to regulatory approvals and other customary conditions and is currently expected to close in the second quarter of 2024.
“After a thorough strategic review, we’ve determined that the Augusta acquisition will be a great fit for Clearwater Paper, as it will add scale and growth capacity to improve our position as a premier, independent supplier of paperboard to North American converters,” said Arsen Kitch, president and chief executive officer. “We remain optimistic about the long-term prospects for paperboard as consumers look for sustainable solutions in packaging and food service. With this acquisition, Clearwater Paper will be well positioned to service customers with high quality paperboard capacity and a great manufacturing footprint across North America,” concluded Kitch.
The company will explore strategic options for its tissue business as it intends to focus on growth in paperboard.
FOURTH QUARTER AND FULL YEAR RESULTS
“We had a great year, driven by a significant improvement in our tissue margins and strong operational execution across both businesses. Tissue demand remained strong, and we benefited from favorable input costs. Paperboard demand was soft, but our team did a great job of balancing supply with demand to manage inventories," said Arsen Kitch, president and chief executive officer. “We maintained our focus on cash flow generation, and have reduced our net debt by more than $450 million since 2020.”
1 As there is uncertainty in connection with calculating the adjustments necessary to prepare reconciliations from Adjusted EBITDA to the comparable GAAP financial measure, the Company is unable to reconcile the Adjusted EBITDA projections without unreasonable efforts. Therefore, no reconciliation is being provided at this time. These items could result in significant adjustments from the most comparable GAAP measure.
For the fourth quarter of 2023, Clearwater Paper reported net sales of $513 million, a 3% decrease compared to net sales of $527 million reported in the fourth quarter of 2022. Net income for the fourth quarter of 2023 was $18 million, or $1.04 per diluted share, compared to a net loss in the fourth quarter of 2022 of $6 million, or $0.34 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income in the fourth quarter of 2023 of $23 million, or $1.35 per diluted share, compared to fourth quarter 2022 adjusted net loss of $5 million, or $0.30 per diluted share. Adjusted EBITDA for the quarter was $63 million compared to the fourth quarter of 2022 Adjusted EBITDA of $28 million.
For the full year 2023, Clearwater Paper reported net sales of $2.1 billion, flat as compared to net sales of $2.1 billion for 2022. Net income for the full year was $108 million or $6.30 per diluted share, compared to net income for 2022 of $46 million or $2.68 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income for 2023 of $114 million, or $6.69 per diluted share, compared to 2022 adjusted net income of $62 million, or $3.63 per diluted share. Adjusted EBITDA for 2023 was $281 million, compared to 2022 Adjusted EBITDA of $227 million.
Pulp and Paperboard Segment
Net sales in the Pulp and Paperboard segment were $251 million for the fourth quarter of 2023, down 8% compared to fourth quarter 2022 net sales of $274 million. Segment operating income for the fourth quarter of 2023 was $27 million compared to $18 million for the fourth quarter of 2022. Adjusted EBITDA for the segment was $37 million in the fourth quarter of 2023, compared to $27 million in the fourth quarter of 2022. The increase in operating income and Adjusted EBITDA was driven by the absence of planned major maintenance at our Lewiston, Idaho facility and a weather event at our Cypress Bend, Arkansas facility that occurred in the fourth quarter of 2022, offset by lower sales prices.
Net sales in the Pulp and Paperboard segment were $1.1 billion for 2023, a decrease of 6% compared to 2022 net sales of $1.1 billion. Segment operating income for 2023 was $169 million compared to $183 million for 2022. Adjusted EBITDA for the segment was $206 million for 2023, compared to $220 million for 2022. The decrease in operating income and Adjusted EBITDA was driven by lower sales volumes and planned production downtime to manage inventory partially offset by lower input costs due to deflation and absence of planned major maintenance.
Pulp and Paperboard Sales Volumes and Prices:
• Paperboard sales volumes were 188,018 tons in the fourth quarter of 2023, a decrease of 1% compared to 188,999 tons in the fourth quarter of 2022. Paperboard sales volumes were 751,520 tons for the year ended 2023 compared to 814,556 tons for the year ended 2022.
• Paperboard average net selling price decreased 9% to $1,297 per ton for the fourth quarter of 2023, compared to $1,429 per ton in the fourth quarter of 2022. Paperboard average net selling price increased 1% to $1,375 per ton for the year ended 2023, compared to $1,356 per ton for the year ended 2022.
Consumer Products Segment
Net sales in the Consumer Products segment were $262 million for the fourth quarter of 2023, up 3% compared to the fourth quarter 2022 net sales of $254 million. In the fourth quarter of 2023, retail converted case shipments were 13.5 million cases, an increase of 4% compared to the 13.0 million cases shipped in the fourth quarter of 2022. Segment operating income for the fourth quarter of 2023 was $31 million compared to operating income of $2 million in the fourth quarter of 2022. Adjusted EBITDA for the segment was $46 million in the fourth quarter of 2023, up from $18 million in the fourth quarter of 2022. The increase in operating income and Adjusted EBITDA was driven by higher sales prices, sales volume and lower input costs, specifically pulp, energy and freight, partially offset by higher chemical costs.
Net sales in the Consumer Products segment were $1.0 billion for the full year 2023, up 8% compared to 2022 net sales of $950 million. For 2023, retail converted case shipments were 52 million cases, a increase of 4% compared to 50 million cases shipped for 2022. Segment operating income for 2023 was $92 million, compared to operating income of $11 million for 2022. Adjusted EBITDA for the segment was $150 million for 2023, an increase from $74 million for 2022. The increase in operating income and Adjusted EBITDA was driven by higher sales prices and volume and lower input costs, specifically freight.
Retail Tissue Sales Volumes and Prices:
• Retail tissue volumes sold were 81,475 tons in the fourth quarter of 2023, an increase of 1% compared to 80,766 tons in the fourth quarter of 2022. Retail tissue volumes sold were 317,582 tons for the year ended of 2023, an increase of 3% compared to 309,735 tons for 2022.
• Retail tissue average net selling prices increased 3% to $3,187 per ton in the fourth quarter of 2023, compared to $3,095 per ton in the fourth quarter of 2022. Retail tissue average net selling prices increased 6% to $3,200 per ton for 2023, compared to $3,010 per ton for 2022.
COMPANY OUTLOOK
“We anticipate continued strength in our tissue business in 2024 and believe that paperboard demand will recover in the second half of the year. We also look forward to completing the Augusta acquisition in the second quarter of this year and welcoming the Augusta team to Clearwater Paper. Together we will be well positioned to grow with our customers by offering outstanding service, quality, and product innovation,” concluded Kitch.
Clearwater Paper Corporation will discuss these results during an earnings conference call that begins at 2:00 p.m. Pacific Time on Wednesday, February 21, 2024. A live webcast and accompanying supplemental information will be available on the company's website. A replay of the conference call will be available on the website beginning at 5:00 p.m. Pacific Time the same day.
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 2023 and 2022, 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 proposed transaction between Graphic Packaging and the company; the expected timing and structure of the proposed transaction; the ability of the parties to complete the proposed transaction considering the various closing conditions; product demand; cost structure improvements; the company’s expectations regarding the paperboard and tissue markets; operational and financial performance; the redemption of the company’s notes; the company’s financial flexibility; the company’s continued investment in its business; the company’s exploration and ability to take advantage of strategic opportunities as they arise, and the company’s focus on cash flow generation and inventory management. These forward-looking statements are based on management’s current expectations, estimates, assumptions and projections that are subject to change. The company’s actual results of operations may differ materially from those expressed or implied by the forward-looking statements contained in this press release. Factors that could cause or contribute to such material differences in actual results include, but are not limited to: competitive pricing pressures for the company’s 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; cyclical industry conditions; manufacturing or operating disruptions, including equipment malfunctions and damage to the company’s 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 transportation costs and disruptions in transportation services impacting the company’s 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 the company’s products and the company’s operations; changes in customer product preferences and competitors’ product offerings; labor disruptions; cyber-security risks; larger competitors having operational, financial and other advantages; consolidation and vertical integration of converting operations in the paperboard industry; the company’s ability to execute on the company’s growth and expansion strategies; the company’s ability to successfully execute capital projects and other activities to operate the company’s assets, including effective maintenance, implement the company’s operational efficiencies and realize higher throughput or lower costs; IT system disruptions and IT system implementation failures; changes in expenses, required contributions and potential withdrawal costs associated with the company’s pension plans; environmental liabilities or expenditures and climate change; the company’s ability to attract, motivate, train and retain qualified and key personnel; the company’s ability to service the company’s debt obligations and restrictions on the company’s business from debt covenants and terms; changes in the company’s banking relations, or in the company’s customer supply chain financing; negative changes in the company’s credit agency ratings; 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, 2023. 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) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Net sales | $ | 512.8 | $ | 526.7 | $ | 2,082.8 | $ | 2,080.1 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of sales | 437.4 | 491.4 | 1,752.0 | 1,823.4 | |||||||||||||||||||
| Selling, general and administrative expenses | 36.8 | 33.5 | 148.3 | 133.0 | |||||||||||||||||||
| Other operating charges, net | 2.9 | 1.2 | 5.3 | 9.7 | |||||||||||||||||||
| Total operating costs and expenses | 477.2 | 526.1 | 1,905.7 | 1,966.2 | |||||||||||||||||||
| Income from operations | 35.7 | 0.6 | 177.1 | 113.9 | |||||||||||||||||||
| Interest expense, net | (8.0) | (7.3) | (30.0) | (34.6) | |||||||||||||||||||
| Debt retirement costs | (3.1) | — | (3.1) | (0.5) | |||||||||||||||||||
| Other non-operating expense (income) | (0.2) | (1.4) | 0.1 | (5.7) | |||||||||||||||||||
| Total non-operating expense | (11.3) | (8.8) | (33.0) | (40.9) | |||||||||||||||||||
| Income (loss) before income taxes | 24.4 | (8.2) | 144.2 | 73.1 | |||||||||||||||||||
| Income tax provision (benefit) | 6.8 | (2.3) | 36.4 | 27.0 | |||||||||||||||||||
| Net income (loss) | $ | 17.6 | $ | (5.9) | $ | 107.7 | $ | 46.0 | |||||||||||||||
| Net income (loss) per common share: | |||||||||||||||||||||||
| Basic | $ | 1.06 | $ | (0.35) | $ | 6.39 | $ | 2.71 | |||||||||||||||
| Diluted | 1.04 | (0.34) | 6.30 | 2.68 | |||||||||||||||||||
| Average shares outstanding (in thousands): | |||||||||||||||||||||||
| Basic | 16,638 | 16,974 | 16,863 | 16,985 | |||||||||||||||||||
| Diluted | 16,867 | 17,204 | 17,091 | 17,181 | |||||||||||||||||||
| Clearwater Paper Corporation | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| (In millions) | December 31, 2023 | December 31, 2022 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 42.0 | $ | 53.7 | ||||
| Receivables, net | 184.5 | 188.8 | ||||||
| Inventories, net | 319.8 | 324.0 | ||||||
| Other current assets | 17.9 | 19.9 | ||||||
| Total current assets | 564.1 | 586.3 | ||||||
| Property, plant and equipment, net | 990.1 | 1,017.1 | ||||||
| Other assets, net | 117.6 | 100.1 | ||||||
| Total Assets | $ | 1,671.8 | $ | 1,703.5 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 0.8 | $ | 0.9 | ||||
| Accounts payable and accrued liabilities | 285.1 | 311.1 | ||||||
| Total current liabilities | 286.0 | 312.0 | ||||||
| Long-term debt | 462.3 | 564.9 | ||||||
| Liability for pension and other postretirement employee benefits | 55.7 | 58.2 | ||||||
| Deferred tax liabilities and other long-term obligations | 199.1 | 196.4 | ||||||
| Total Liabilities | 1,003.0 | 1,131.5 | ||||||
| Common Stock | — | — | ||||||
| Additional paid-in capital | 14.9 | 28.5 | ||||||
| Retained earnings | 684.5 | 576.8 | ||||||
| Accumulated other comprehensive loss, net of tax | (30.7) | (33.3) | ||||||
| Total Stockholders' Equity | 668.8 | 572.1 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 1,671.8 | $ | 1,703.5 | ||||
| Clearwater Paper Corporation | |||||||||||||||||||||||
| Consolidated Statements of Cash Flows | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Operating Activities | |||||||||||||||||||||||
| Net income (loss) | $ | 17.6 | $ | (5.9) | $ | 107.7 | $ | 46.0 | |||||||||||||||
| Adjustments to reconcile net income (loss) to net cash flows provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 24.7 | 25.9 | 98.6 | 103.3 | |||||||||||||||||||
| Equity-based compensation expense | 3.0 | 3.1 | 9.9 | 12.7 | |||||||||||||||||||
| Deferred taxes | (7.6) | (2.2) | (14.9) | (7.9) | |||||||||||||||||||
| Defined benefit pension and other postretirement employee benefits | (0.5) | 0.8 | (2.0) | 3.0 | |||||||||||||||||||
| Amortization of deferred debt costs and debt retirement | 3.4 | 0.2 | 4.4 | 2.0 | |||||||||||||||||||
Loss on sale or impairment associated with assets | 0.7 | 0.3 | 2.1 | 6.1 | |||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||
| (Increase) decrease in accounts receivable | (9.2) | 0.7 | (1.3) | (16.9) | |||||||||||||||||||
| (Increase) decrease in inventory | 14.1 | 2.8 | 4.0 | (46.3) | |||||||||||||||||||
| (Increase) decrease in other current assets | (7.8) | (8.0) | 0.8 | (2.4) | |||||||||||||||||||
| Increase (decrease) in accounts payable and accrued liabilities | 25.6 | (0.8) | (21.3) | 49.2 | |||||||||||||||||||
| Other, net | 1.5 | 0.4 | 2.6 | 1.5 | |||||||||||||||||||
| Net cash flows provided by operating activities | 65.6 | 17.4 | 190.7 | 150.2 | |||||||||||||||||||
| Investing Activities | |||||||||||||||||||||||
| Additions to property, plant and equipment | (25.2) | (13.5) | (73.7) | (33.5) | |||||||||||||||||||
| Net cash flows used in investing activities | (25.2) | (13.5) | (73.7) | (33.5) | |||||||||||||||||||
| Financing Activities | |||||||||||||||||||||||
| Borrowings on long-term debt | 210.0 | — | 222.0 | — | |||||||||||||||||||
| Repayments of long-term debt | (312.9) | (0.1) | (325.6) | (80.9) | |||||||||||||||||||
| Taxes paid related to net share settlement of equity awards | — | — | (4.7) | (2.5) | |||||||||||||||||||
| Repurchases of common stock | (2.8) | — | (17.9) | (5.0) | |||||||||||||||||||
| Payments for debt issuance costs | (2.9) | (0.9) | (3.1) | (0.9) | |||||||||||||||||||
| Other, net | — | — | — | 0.8 | |||||||||||||||||||
| Net cash flows used in financing activities | (108.6) | (1.0) | (129.4) | (88.6) | |||||||||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | (68.3) | 2.9 | (12.4) | 28.2 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 110.2 | 51.5 | 54.4 | 26.2 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 42.0 | $ | 54.4 | $ | 42.0 | $ | 54.4 | |||||||||||||||
| Clearwater Paper Corporation | ||||||||||||||||||||||||||||||||
| Segment Information | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||||||
| (In millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
| Segment net sales: | ||||||||||||||||||||||||||||||||
| Pulp and Paperboard | $ | 251.3 | $ | 273.5 | $ | 1,063.7 | $ | 1,136.3 | ||||||||||||||||||||||||
| Consumer Products | 262.0 | 254.1 | 1,023.4 | 950.2 | ||||||||||||||||||||||||||||
| Eliminations | (0.5) | (0.9) | (4.3) | (6.4) | ||||||||||||||||||||||||||||
| Total segment net sales | $ | 512.8 | $ | 526.7 | $ | 2,082.8 | $ | 2,080.1 | ||||||||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||||||||||||||
| Pulp and Paperboard | $ | 27.3 | $ | 17.5 | $ | 169.1 | 183.5 | |||||||||||||||||||||||||
| Consumer Products | 31.1 | $ | 1.6 | 91.7 | 11.3 | |||||||||||||||||||||||||||
| Corporate and eliminations | (19.8) | (17.3) | (78.3) | (71.1) | ||||||||||||||||||||||||||||
Other operating charges, net 1 | (2.9) | (1.2) | (5.3) | (9.7) | ||||||||||||||||||||||||||||
| Income from operations | $ | 35.7 | $ | 0.6 | $ | 177.1 | $ | 113.9 | ||||||||||||||||||||||||
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, 2023 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) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Net income (loss) | $ | 17.6 | $ | (5.9) | $ | 107.7 | $ | 46.0 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax provision (benefit) | 6.8 | (2.3) | 36.4 | 27.0 | |||||||||||||||||||
| Interest expense, net | 8.0 | 7.3 | 30.0 | 34.6 | |||||||||||||||||||
| Depreciation and amortization expense | 24.7 | 25.9 | 98.6 | 103.3 | |||||||||||||||||||
Other operating charges, net1 | 2.9 | 1.2 | 5.3 | 9.7 | |||||||||||||||||||
| Other non-operating expense (income) | 0.2 | 1.4 | (0.1) | 5.7 | |||||||||||||||||||
| Debt retirement costs | 3.1 | — | 3.1 | 0.5 | |||||||||||||||||||
| Adjusted EBITDA | $ | 63.3 | $ | 27.8 | $ | 281.0 | $ | 226.9 | |||||||||||||||
| Pulp and Paperboard segment income | $ | 27.3 | $ | 17.5 | $ | 169.1 | $ | 183.5 | |||||||||||||||
| Depreciation and amortization expense | 9.5 | 9.2 | 37.4 | 37.0 | |||||||||||||||||||
| Adjusted EBITDA Pulp and Paperboard segment | $ | 36.8 | $ | 26.7 | $ | 206.4 | $ | 220.4 | |||||||||||||||
| Consumer Products segment income | $ | 31.1 | $ | 1.6 | $ | 91.7 | $ | 11.3 | |||||||||||||||
| Depreciation and amortization expense | 14.6 | 16.0 | 58.8 | 62.9 | |||||||||||||||||||
| Adjusted EBITDA Consumer Products segment | $ | 45.7 | $ | 17.6 | $ | 150.5 | $ | 74.2 | |||||||||||||||
| Corporate and other expenses | $ | (19.8) | $ | (17.3) | $ | (78.3) | $ | (71.1) | |||||||||||||||
| Depreciation and amortization expense | 0.6 | 0.8 | 2.4 | 3.4 | |||||||||||||||||||
| Corporate Adjusted EBITDA | $ | (19.2) | $ | (16.6) | $ | (75.9) | $ | (67.7) | |||||||||||||||
| Pulp and Paperboard segment | $ | 36.8 | $ | 26.7 | $ | 206.4 | $ | 220.4 | |||||||||||||||
| Consumer Products segment | 45.7 | 17.6 | 150.5 | 74.2 | |||||||||||||||||||
| Corporate and other | (19.2) | (16.6) | (75.9) | (67.7) | |||||||||||||||||||
| Adjusted EBITDA | $ | 63.3 | $ | 27.8 | $ | 281.0 | $ | 226.9 | |||||||||||||||
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, 2023 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) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Net income (loss) | $ | 17.6 | $ | (5.9) | $ | 107.7 | $ | 46.0 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax provision (benefit) | 6.8 | (2.3) | 36.4 | 27.0 | |||||||||||||||||||
| Income (loss) before income taxes | 24.4 | (8.2) | 144.2 | 73.1 | |||||||||||||||||||
| Add back: | |||||||||||||||||||||||
| Debt retirement costs | 3.1 | — | 3.1 | 0.5 | |||||||||||||||||||
| Other operating charges, net | 2.9 | 1.2 | 5.3 | 9.7 | |||||||||||||||||||
| Adjusted income (loss) before tax | 30.4 | (6.9) | 152.5 | 83.3 | |||||||||||||||||||
| Normalized income provision (benefit) | 7.6 | (1.7) | 38.1 | 20.8 | |||||||||||||||||||
| Adjusted net income (loss) | $ | 22.8 | $ | (5.2) | $ | 114.4 | $ | 62.5 | |||||||||||||||
| Weighted average diluted shares (in thousands) | 16,867 | 17,204 | 17,091 | 17,181 | |||||||||||||||||||
| Adjusted net income (loss) per share, diluted | $ | 1.35 | $ | (0.30) | $ | 6.69 | $ | 3.63 | |||||||||||||||
| Calculation of net debt: | December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||||
| Current portion of long-term debt | $ | 0.8 | $ | 0.9 | $ | 0.9 | |||||||||||||||||
| Long-term debt | 462.3 | 564.8 | 564.9 | ||||||||||||||||||||
| Add back: | |||||||||||||||||||||||
| Unamortized deferred debt costs | 5.1 | 2.8 | 3.4 | ||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Cash and cash equivalents | 42.0 | 110.2 | 53.7 | ||||||||||||||||||||
| Net debt | $ | 426.3 | $ | 458.3 | $ | 515.5 | |||||||||||||||||
Clearwater Paper Corporation
Investors contact:
Sloan Bohlen
Solebury Strategic Communications
509-344-5906
investorinfo@clearwaterpaper.com
News media:
Jules Joy, Director, Corporate Communications
509-344-5967
Julia.joy@clearwaterpaper.com
CLEARWATER PAPER CORPORATION STRATEGIC UPDATES AND FOURTH QUARTER EARNINGS RELEASE MATERIALS FEBRUARY 20, 2024 ARSEN KITCH President, Chief Executive Officer and Director SHERRI BAKER 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 as amended, including statements regarding the proposed Augusta manufacturing facility acquisition; the expected timing and impact of the proposed acquisition; the expected benefits and opportunities resulting from the proposed acquisition; the Company’s intention to explore strategic options for its tissue business and focus on growth in paperboard; order patterns; product demand and industry trends; production targets; impact of inflation of raw material and energy; assumptions for Q4 2023 and full year 2023, including maintenance outage impacts, operational factors, interest, capital, lower input costs, depreciation and amortization and income tax; our capital allocation priorities; our strategy, including achieving target leverage ratio and maintaining liquidity; expectations regarding the paperboard and tissue markets; inventory management; the redemption of our notes; our financial flexibility; 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 capacity additions, demand reduction 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 energy, chemicals, packaging and freight costs and disruptions in transportation services impacting our ability to receive inputs or ship products to customers; changes in customer product preferences and competitors' product offerings; larger competitors having operational, financial 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; 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; reliance on a limited number of third-party suppliers, vendors and service providers required for the production of our products and our operations; 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; 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 includes 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 should 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 diluted 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 2024 2
STRATEGIC UPDATES © Clearwater Paper Corporation 2024 3
AUGUSTA MANUFACTURING FACILITY ACQUISITION – STRATEGIC RATIONALE © Clearwater Paper Corporation 2024 Our strategy is to strengthen our position as a premier, independent supplier of paperboard products to North American converters • ~10 million ton North America paperboard market, growing and well positioned to capitalize on sustainable consumer packaging trends • With the pending Augusta facility acquisition, Clearwater Paper will be well positioned to serve customers with improved scale and cost structure, delivering quality, service, and product innovation • We will continue to look at other growth opportunities to support this strategy, including additional substrates that add to our customer value proposition Adjusted EBITDA and cash flow accretion • The Augusta manufacturing facility is projected to be Adjusted EBITDA accretive in the first 12 months following the completion of the acquisition • Targeting to increase Adjusted EBITDA annual run rate by $40 to $50 million by end of 2026 through volume and cost synergies Our balance sheet is well positioned for this growth opportunity • $450 million of debt reduction since 2020, net debt to Adjusted EBITDA leverage ratio ~1.5x at year end • Proven track record of cash flow generation and ability to de-leverage We’ll evaluate strategic options for our tissue business as we grow in paperboard • Well run tissue business that generated >$1 billion in sales and $150 million in adjusted EBITDA in 2023 • We believe increased scale is needed for companies in the industry to remain competitive in long-run 4
AUGUSTA MANUFACTURING FACILITY – KEY TAKEAWAYS © Clearwater Paper Corporation 2024 Improved scale in paperboard • $700 million intended acquisition of a high quality, well invested SBS facility • ~600 thousand tons of capacity, projected to be ~70 to 80% utilized in 2024 • Increases Clearwater Paper’s paperboard capacity by ~70% to 1.4 million tons ~600,000 tons of capacity $100M Adjusted EBITDA Value creation 5 Accretion • Acquisition based on ~$100 million of 2023 proforma Adjusted EBITDA • We expect the acquisition to be Adjusted EBITDA accretive in the first year • Expectation of $140 to $150 million1 of annualized Adjusted EBITDA by end of 2026 Value creation opportunity • Purchase price at a pre-synergy multiple of approximately ~7x Adjusted EBITDA • Advantaged cost structure with volume upside and synergy opportunities • Expecting post synergy multiple to approach ~4.5x by end of 2026 1 As there is uncertainty in connection with calculating the adjustments necessary to prepare reconciliations from Adjusted EBITDA to the comparable GAAP financial measure, the Company is unable to reconcile the Adjusted EBITDA projections without unreasonable efforts. Therefore, no reconciliation is being provided at this time. These items could result in significant adjustments from the most comparable GAAP measure.”
FOURTH QUARTER EARNINGS RELEASE MATERIALS © Clearwater Paper Corporation 2024 6
Overall • Net sales $513 million for Q4, $2.1 billion for 2023 • Net income $18 million for Q4, $108 million for 2023 • Adjusted net income $23 million for Q4, $114 million for 2023 • Adjusted EBITDA $63 million for Q4 • Adjusted EBITDA $281 million for 2023, up $54 million versus 2022 Pulp and Paperboard • SBS prices down versus Q4 2022, slightly higher for full year • Soft demand from continued de-stocking • Balanced supply and demand resulting in lower production Consumer Products • Tissue prices increased • Strong operational performance and reduced input costs • Demand for private branded products remained strong Capital Structure • Continued to maintain strong financial flexibility • Repurchased $3 million of stock, $23 million since 2022, with $7 million remaining authorized under our stock repurchase program • Reduced net debt $89 million in 2023, $450 million since 2020 Q4 2023 AND FULL YEAR 2023 BUSINESS HIGHLIGHTS © Clearwater Paper Corporation 2024 7
Industry (SBS) • Shipments, production, and operating rates decreased 2023 versus 2022 based on AF&PA data • Shipments (in tons) decreased 15.5%, with a 15.1% decline in in the fourth quarter • Production decreased 13.7%, with a decline of 16.2% in the fourth quarter • Operating rates decreased 93.4% to 83.5%, 79.3% in the fourth quarter • RISI reported price decreases of $80/ton between Q3 and Q4 2023, another $40/ton in Feb 2024 • RISI projecting demand recovery in 2024/2025 Clearwater Paper • Demand and order backlogs continued to be soft during Q4 • Solid operational performance as we managed supply to meet demand • Approximately 85% capacity utilization in the quarter to manage inventories • Unplanned disruption during the quarter due to natural gas pipeline damage in Idaho • Price slightly higher for full year 2023 versus 2022, decline in Q4 2023 versus Q3 2023 and Q4 2022 BUSINESS UPDATE – PULP AND PAPERBOARD SOFT DEMAND LEADING TO REDUCED OPERATING RATES, LOWER INDUSTRY PRICING © Clearwater Paper Corporation 2024 8
Industry • Consumers shifting to private brands with economic uncertainty and inflation • Private brand market share remained at 36%1 Clearwater Paper • Strong demand with Q4 2023 shipments of 13.5 million cases compared to 13 million cases in Q4 2022 and Q3 2023 • Outstanding operational performance continued • Strong service levels with high on-time performance rates • Moderating input costs in pulp, energy and freight as compared to Q3 2023 • Continued to benefit from previously announced price increases BUSINESS UPDATE – CONSUMER PRODUCTS SHIPMENTS STRENGTHENED, PRICES INCREASED © Clearwater Paper Corporation 2024 9 1 Circana panel data for dollar share as of December 2023
© Clearwater Paper Corporation 2024 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 10 2023 2022 2023 2022 Net sales 512.8$ 526.7$ 2,082.8$ 2,080.1$ Cost of sales 437.4 491.4 1,752.0 1,823.4 Selling, general and adminstrative 36.8 33.5 148.3 133.0 Other operating charges, net 2.9 1.2 5.3 9.7 Income from operations 35.7 0.6 177.1 113.9 Non-operating expense (11.3) (8.8) (33.0) (40.9) Income tax provision 6.8 (2.3) 36.4 27.0 Net income (loss) 17.6$ (5.9)$ 107.7$ 46.0$ Diluted income per share 1.04$ (0.34)$ 6.30$ 2.68$ Adjusted income per share 1.35$ (0.30)$ 6.69$ 3.63$ Adjusted EBITDA 63.3$ 55.6$ 281.0$ 226.9$ Quarter Ended December 31, Year Ended December 31,
© Clearwater Paper Corporation 2024 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 2023 2022 2023 2022 Net Sales Pulp and Paperboard 251.3$ 273.5$ 1,063.7$ 1,136.3$ Consumer Products 262.0 254.1 1,023.4 950.2 Eliminations (0.5) (0.9) (4.3) (6.4) 512.8$ 526.7$ 2,082.8$ 2,080.1$ Operating Income Pulp and Paperboard 27.3$ 17.5$ 169.1$ 183.5$ Consumer Products 31.1 1.6 91.7 11.3 Corporate and other (20.0) (17.3) (78.3) (71.1) Other operating charges, net (2.9) (1.2) (5.3) (9.7) 35.4$ 0.6$ 177.1$ 113.9$ Adjusted EBITDA Pulp and Paperboard 36.8$ 26.7$ 206.4$ 220.4$ Consumer Products 45.7 17.6 150.5 74.2 Corporate and other (19.4) (16.6) (75.9) (67.7) 63.3$ 27.8$ 281.0$ 226.9$ Quarter Ended December 31, Year Ended December 31, 11
PULP AND PAPERBOARD Q4 2023 RESULTS Q4 2022 VS. Q4 2023 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 12 Lower industry pricing as reported by RISI Absence of planned major maintenance, and lower energy costs
PULP AND PAPERBOARD 2023 RESULTS 2022 VS. 2023 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 13 Reduced operating schedules and lower shipments Cost deflation related to freight and energy Higher pricing on paperboard offset by unfavorable mix, lower pulp pricing
CONSUMER PRODUCTS Q4 2023 RESULTS Q4 2022 VS. Q4 2023 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 14 Lower pulp, energy and freight, offset by higher chemical costs Benefits from previously announced price increases
CONSUMER PRODUCTS 2023 RESULTS 2022 VS. 2023 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 15 Lower freight costs Benefits from previously announced price increases Higher shipments and increased absorption
© Clearwater Paper Corporation 2024 CAPITAL STRUCTURE AND ALLOCATION Capital structure summary • Ample liquidity • No material near-term debt maturities • Corporate/Issuer ratings: Ba2/BB- Capital allocation • Repurchased 78,793 shares at an average price of $35.69 per share in Q4 2023 • Reduced net debt by $32 million from Q3 2023 • Leverage ratio as of December 2023 is 1.47x • Redeemed 2025 notes $0.0 $0.0 $0.0 $20.0 $425.0 2024 2025 2026 2027 2028 Scheduled Debt Maturity Profile ($ in millions)2 Liquidity Profile ($ in millions)1 ABL Availability $259.0 Less Utilization (23.7) Plus Unrestricted Cash 42.0 Liquidity $277.3 1. ABL availability based on borrowing base calculations and consolidated balance sheet as of December 31, 2023, maximum capacity is $275 million 2. This chart excludes finance leases as of December 31, 2023. Current debt maturities include $20 million ABL due in 2027 and $275 million of 4.75% notes and $150 million Term Loan due 2028 16
OUTLOOK FOR Q1’24 AND 2024 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2024 Q1 2024: $53 to $63 million1 of adjusted EBITDA • Weather related impact at Lewiston site • Increasing paperboard demand and production volumes • Continued strong performance in tissue FY 2024 operational assumptions vs. FY 2023 • Maintaining strong tissue margins • $15 - $25 million positive volume impact, improved paperboard demand in second half of year • $30 - $35 million negative impact from major maintenance outage at Lewiston site • $40 - $50 million negative price/cost impact, lower input costs partly offsetting lower paperboard pricing 2024 other assumptions • Interest expense: $28 to $30 million • Depreciation and amortization expense: $97 to $100 million • CAPEX: $90 to $100 million • Taxes: effective rate ~25 to 26% 2024 assumptions do not include impacts from Augusta acquisition 17 1 As there is uncertainty in connection with calculating the adjustments necessary to prepare reconciliations from Adjusted EBITDA to the comparable GAAP financial measure, the Company is unable to reconcile the Adjusted EBITDA projections without unreasonable efforts. Therefore, no reconciliation is being provided at this time. These items could result in significant adjustments from the most comparable GAAP measure.”
APPENDIX © Clearwater Paper Corporation 2024 18
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q3 2023 VS. Q4 2023 ADJUSTED EBITDA © Clearwater Paper Corporation 2024 19 ($ IN MILLIONS) Lower industry pricing as reported by RISI Higher fiber, chemicals partially offset by lower energy
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q3 2023 VS. Q4 2023 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 20 Lower pricing due to index pricing Lower cost due to lower pulp, freight and energy costs
KEY SEGMENT INFORMATION Q4’2021 Q1’2022 Q2’2022 Q3’2022 Q4’2022 Q1’2023 Q2’2023 Q3’2023 Q4’2023 Pulp and Paperboard Sales ($ millions) $261.3 $266.2 $295.8 $300.8 $273.5 $278.8 $272.3 $261.4 $251.3 Adjusted EBITDA ($ millions) $61.9 $59.5 $61.2 $73.0 $26.7 $66.2 $51.3 $53.1 $36.8 Paperboard shipments (short tons) 211.5 201.4 215.9 208.3 189.0 189.4 186.2 187.9 188.0 Paperboard sales price ($/short ton) $1,164 $1,263 $1,332 $1,405 $1,429 $1,441 $1,413 $1,350 $1,297 Consumer Products Sales ($ millions) $231.8 $223.0 $232.1 $240.9 $254.1 $248.3 $253.6 $259.3 $262.0 Adjusted EBITDA ($ millions) $8.0 $16.2 $19.1 $21.2 $17.6 $19.2 $39.7 $45.8 $45.7 Shipments Retail (short tons in thousands) 79.4 75.4 76.6 76.9 80.8 76.8 78.7 80.5 81.5 Non-Retail (short tons in thousands) 6.2 5.1 2.6 2.3 2.2 1.0 0.1 1.4 2.3 Converted Products (cases in millions)1 12.4 12.0 12.6 12.6 13.0 12.7 12.8 13.0 13.5 Sales Price ($ per short ton) Retail $2,831 $2,872 $2,984 $3,082 $3,095 $3,201 $3,214 $3,198 $3,187 Production Converted Products (cases in millions) 11.9 12.2 12.1 12.9 12.3 12.7 12.6 12.9 13.0 © Clearwater Paper Corporation 2024 21
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) Sept 30, 2023 2022 2023 2023 2022 Net income (loss) $ 17.6 $ (5.9) $ 36.6 $ 107.7 $ 46.0 Income tax provision 6.8 (2.3) 11.0 36.4 27.0 Interest expense, net 8.0 7.3 6.9 30.0 34.6 Depreciation and amortization expense 24.7 25.9 24.4 98.6 103.3 Other operating charges, net 2.9 1.2 1.8 5.3 9.7 Other non-operating expense 0.2 1.4 (0.1) (0.1) 5.7 Debt retirement costs 3.1 - - 3.1 0.5 Adjusted EBITDA $ 63.3 $ 27.8 $ 80.6 $ 281.0 $ 226.9 Pulp and Paperboard segment income $ 27.3 $ 17.5 $ 42.7 $ 169.1 $ 183.5 Depreciation and amortization 9.5 9.2 9.4 37.4 37.0 Adjusted EBITDA Paperboard segment $ 36.8 $ 26.7 $ 52.1 $ 206.4 $ 220.4 Consumer Products segment income $ 31.1 $ 1.6 $ 31.4 $ 91.7 $ 11.3 Depreciation and amortization 14.6 16.0 14.4 58.8 62.9 Adjusted EBITDA Consumer Products segment $ 45.7 $ 17.6 $ 45.8 $ 150.5 $ 74.2 Corporate and other expense $ (20.0) $ (17.3) $ (18.0) $ (78.3) $ (71.1) Depreciation and amortization 0.6 0.8 0.6 2.4 3.4 Adjusted EBITDA Corporate and other $ (19.4) $ (16.6) $ (17.4) $ (75.9) $ (67.7) Pulp and Paperboard segment $ 36.8 $ 26.7 $ 52.1 $ 206.4 $ 220.4 Consumer Products segment 45.7 17.6 45.8 150.5 74.2 Corporate and other (19.4) (16.6) (17.4) (75.9) (67.7) Adjusted EBITDA $ 63.3 $ 27.8 $ 80.6 $ 281.0 $ 226.9 December 31, December 31, Year EndedQuarter Ended © Clearwater Paper Corporation 2024 22
© Clearwater Paper Corporation 2024 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2023 2022 2023 2022 Net income 17.6$ (5.9)$ 107.7$ 46.0$ Add back: Income tax provision 6.8 (2.3) 36.4 27.0 Income before income taxes 24.4 (8.2) 144.2 73.1 Add back: Debt retirement costs 3.1 - 3.1 0.5 Other operating charges, net 2.9 1.2 5.3 9.7 Adjusted income before tax 30.4 (6.9) 152.5 83.3 Normalized income tax provision 7.6 (1.7) 38.1 20.8 Adjusted income 22.8$ (5.2)$ 114.4$ 62.5$ Weighted average diluted shares (thousands) 16,867 17,204 17,091 17,181 Adjusted income per diluted share 1.35$ (0.30)$ 6.69$ 3.63$ Year Ended December 31,Quarter Ended December 31, 23
ADDITIONAL RECONCILIATIONS Net Debt Dec 31 ‘21 Mar 31 ‘22 Jun 30 ‘22 Sep 30 ‘22 Dec 31 ‘22 Mar 31 ’23 Jun 30 ‘23 Sep 30 ‘23 Dec 31 ‘23 Cash $ 25.2 $ 36.4 $69.5 $50.8 $53.7 $16.7 $41.7 $110.2 $42.0 Current debt 1.6 1.6 1.0 1.0 0.9 0.9 0.9 0.9 0.8 Long term debt 637.6 617.7 589.9 564.9 564.9 564.9 564.8 564.6 462.3 add: Deferred debt costs 4.8 4.4 3.8 3.6 3.4 3.2 3.0 3.0 5.1 Subtotal 642.4 623.7 594.7 569.5 569.2 569.0 568.7 568.5 468.3 Net debt $ 617.2 $587.3 $525.2 $518.7 $515.5 $552.3 $527.0 $458.3 $426.3 Free Cash Flow Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Cash from operations $ 32.1 $41.1 $78.5 $13.3 $17.4 $(9.1) $46.0 $88.2 $65.6 Additions to property, plant and equipment, net of proceeds from sales 4.8 (7.9) (5.4) (6.7) (13.5) (21.5) (12.8) (14.2) (25.2) Free cash flow $ 36.9 $33.2 $73.1 $6.6 $3.9 $(30.6) $33.2 $74.0 $40.4 ($ IN MILLIONS) © Clearwater Paper Corporation 2024 24
$2 $10 $22 $4 $20 $17 $5 $7 $28 $30 $24 $27 $6 $30 - $35 2017 2018 2019 2020 2021 2022 2023 2024e 2025e 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 2024 25 1,2 $30 - $35 2025 or 2026 expected