CLW 8-K
Clearwater Paper Corp (CLW)
8-K
2024-04-29
For: 2024-04-29
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Added on
April 06, 2026
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): April 29, 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 April 29, 2024 , Clearwater Paper Corporation (the “Company”) announced its results of operations and financial condition for the first quarter ending March 31, 2024. A copy of the press release containing this announcement is furnished as Exhibit 99.1 hereto. In addition, a copy of the Company’s First Quarter Supplemental Information 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 in 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 net income which is calculated by excluding from net income, other operating credits and charges, net, and adjusts for a normalized tax rate. Adjusted EBITDA and Adjusted net income 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 an 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 net income, 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 net income 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.
The information in Item 2.02, including Exhibits 99.1 and 99.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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 : April 29, 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 First Quarter 2024 Results
SPOKANE, Wash.--(BUSINESS WIRE)--April 29, 2024 --Clearwater Paper Corporation (NYSE:CLW), a premier supplier of quality consumer tissue and bleached paperboard today reported financial results for the first quarter ended March 31, 2024.
FIRST QUARTER HIGHLIGHTS
•Strong performance driven by lower input costs and continued strength in tissue
•Continued strong demand in tissue and improved customer demand in paperboard
•Severe weather event resulting in significant disruption to production at the Lewiston site
•Net sales of $496 million, down 6% from the first quarter of last year
•Net income of $17 million, or $1.02 per diluted share, down $7 million from the first quarter of last year
•Adjusted net income of $24 million, $1 million lower than the first quarter of last year
•Adjusted EBITDA of $62 million, $4 million lower than first quarter of last year
•Reduced net debt by $33 million, repurchased $1 million of outstanding shares with $6 million remaining under program
“Despite the significant weather event that impacted the quarter, we delivered solid results that came in at the higher end of our expectations through strong operational execution,” said Arsen Kitch, president and chief executive officer. “Our Lewiston team did a tremendous job repairing damaged equipment under very difficult conditions and resuming operations."
PAPERBOARD FACILITY ACQUISITION UPDATE
Clearwater Paper previously announced that it signed a definitive agreement to acquire from Graphic Packaging International, LLC its Augusta, Georgia bleached paperboard manufacturing facility and associated business for $700 million, subject to adjustments for inventory. The transaction is currently expected to close shortly.
OVERALL RESULTS
For the first quarter of 2024, Clearwater Paper reported net sales of $496 million compared to net sales of $525 million for the first quarter of 2023. Net income for the first quarter of 2024 was $17 million, or $1.02 per diluted share, compared to net income for the first quarter of 2023 of $24 million, or $1.40 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income in the first quarter of 2024 of $24 million, or $1.43 per diluted share, compared to first quarter 2023 adjusted net income of $25 million, or $1.47 per diluted share. Adjusted EBITDA for the first quarter of 2024 was $62 million, compared to the first quarter of 2023 Adjusted EBITDA of $66 million.
Pulp and Paperboard Segment
Net sales in the Pulp and Paperboard segment were $245 million for the first quarter of 2024, down 12% compared to first quarter 2023 net sales of $279 million. Segment operating income for the first quarter of 2024 was $25 million, compared to $57 million for the first quarter of 2023. Adjusted EBITDA for the segment was $34 million in the first quarter of 2024, compared to $66 million in the first quarter of 2023. The decrease in operating income and Adjusted EBITDA were primarily due to lower sales prices and impacts of a severe weather event at our Lewiston Idaho facility, partially offset by lower input costs, specifically in wood, energy and freight.
Pulp and Paperboard Sales Volumes and Prices:
• Paperboard sales volumes were 187,303 tons in the first quarter of 2024, a decrease of 1% compared to 189,398 tons in the first quarter of 2023.
• Paperboard average net selling price decreased 11% to $1,284 per ton for the first quarter of 2023, compared to $1,441 per ton in the first quarter of 2023.
Consumer Products Segment
Net sales in the Consumer Products segment were $253 million for the first quarter of 2024, up 2% compared to first quarter 2023 net sales of $248 million. Segment operating income for the first quarter of 2024 was $32 million compared to operating income of $4 million in the first quarter of 2023. Adjusted EBITDA for the segment was $46 million in the first quarter of 2024, compared to $19 million in the first quarter of 2023. The increases in operating income and Adjusted EBITDA were driven by higher sales volumes, lower input costs and strong operational performance.
Retail Tissue Sales Volumes and Prices:
• Retail tissue volumes sold were 79,929 tons in the first quarter of 2024, an increase of 5% compared to 76,848 tons in the first quarter of 2023.
• Retail tissue average net selling price decreased 2% to $3,138 per ton in the first quarter of 2024, compared to $3,201 per ton in the first quarter of 2023.
COMPANY OUTLOOK
“We expect continued strength in our tissue performance this year and a recovery in paperboard demand as we believe customer de-stocking is now largely behind us. We are also looking forward to completing the Augusta acquisition and personally welcoming the Augusta team to Clearwater Paper,” continued Kitch.
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. A replay of today's conference call will be available on the website 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 first quarter of 2024 and 2023, including adjusted income and Adjusted EBITDA. Because these amounts are not in accordance with GAAP, reconciliations to net income as determined in accordance with GAAP are included in the tables at the end of this press release. The company presents these non-GAAP metrics because management believes they assist investors and analysts in comparing the company's performance across reporting periods on a consistent basis by excluding items that the company does not believe are indicative of its core operating performance. In addition, the company uses Adjusted EBITDA: (i) as a factor in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the effectiveness of the company's business strategies, and (iii) because the company's credit agreement and the indentures governing the company's outstanding notes use metrics similar to Adjusted EBITDA to measure the company's compliance with certain covenants.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding: the pending acquisition of the paperboard facility and associated business in Augusta, Georgia, and our expectations regarding tissue performance and paperboard demand, . 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 press release. Factors that could cause or contribute to such material differences in actual results include, but are not limited to: the expansion of our business through the acquisition of a paperboard manufacturing facility and associated business may not be completed or proceed as anticipated; our inability to realize the expected benefits of the acquisition because of integration difficulties or other challenges; 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 transportation 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; our 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, 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) | ||||||||
| Quarter Ended March 31, | ||||||||
| (In millions, except per-share data) | 2024 | 2023 | ||||||
| Net sales | $ | 496.2 | $ | 525.4 | ||||
| Costs and expenses: | ||||||||
| Cost of sales | 421.6 | 448.5 | ||||||
| Selling, general and administrative expenses | 36.2 | 36.0 | ||||||
Other operating charges, net 1 | 7.9 | 1.1 | ||||||
| Total operating costs and expenses | 465.8 | 485.6 | ||||||
| Income from operations | 30.4 | 39.8 | ||||||
| Interest expense, net | (6.5) | (7.6) | ||||||
| Other non-operating income | 0.3 | 0.1 | ||||||
| Total non-operating expense | (6.2) | (7.5) | ||||||
| Income before income taxes | 24.2 | 32.3 | ||||||
| Income tax provision | 7.0 | 8.4 | ||||||
| Net income | $ | 17.2 | $ | 23.8 | ||||
| Net income per common share: | ||||||||
| Basic | $ | 1.03 | $ | 1.42 | ||||
| Diluted | 1.02 | 1.40 | ||||||
| Average shares outstanding (in thousands): | ||||||||
| Basic | 16,607 | 16,834 | ||||||
| Diluted | 16,895 | 17,036 | ||||||
1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the SEC for the period ended March 31, 2024 for the detailed breakout of this amount.
| Clearwater Paper Corporation | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| (In millions) | March 31, 2024 | December 31, 2023 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 55.2 | $ | 42.0 | ||||
| Receivables, net | 173.1 | 184.5 | ||||||
| Inventories | 327.8 | 319.8 | ||||||
| Other current assets | 20.2 | 17.9 | ||||||
| Total current assets | 576.2 | 564.1 | ||||||
| Property, plant and equipment, net | 983.1 | 990.1 | ||||||
| Other assets, net | 120.4 | 117.6 | ||||||
| Total assets | $ | 1,679.7 | $ | 1,671.8 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 0.9 | $ | 0.8 | ||||
| Accounts payable and accrued liabilities | 300.6 | 285.1 | ||||||
| Total current liabilities | 301.4 | 286.0 | ||||||
| Long-term debt | 442.3 | 462.3 | ||||||
| Liability for pension and other postretirement employee benefits | 55.1 | 55.7 | ||||||
| Deferred tax liabilities and other long-term obligations | 196.3 | 199.1 | ||||||
| Total liabilities | 995.2 | 1,003.0 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | — | — | ||||||
| Additional paid-in capital | 13.5 | 14.9 | ||||||
| Retained earnings | 701.7 | 684.5 | ||||||
| Accumulated other comprehensive loss, net of tax | (30.7) | (30.7) | ||||||
| Total stockholders' equity | 684.5 | 668.8 | ||||||
| Total liabilities and stockholders' equity | $ | 1,679.7 | $ | 1,671.8 | ||||
| Clearwater Paper Corporation | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| Quarter Ended March 31, | ||||||||
| (In millions) | 2024 | 2023 | ||||||
| Operating activities | ||||||||
| Net income | $ | 17.2 | $ | 23.8 | ||||
| Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 23.2 | 24.8 | ||||||
| Equity-based compensation expense | 3.3 | 1.9 | ||||||
| Deferred taxes | (1.6) | (1.3) | ||||||
| Defined benefit pension and other postretirement employee benefits | (0.9) | (0.5) | ||||||
| Loss on sale or impairment associated with assets | 0.2 | 1.1 | ||||||
| Increase (decrease) in cash from changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in accounts receivable | 7.8 | (6.4) | ||||||
| (Increase) decrease in inventories | (8.2) | (22.3) | ||||||
| (Increase) decrease in other current assets | (2.3) | 0.4 | ||||||
| Increase (decrease) in accounts payable and accrued liabilities | 20.5 | (31.7) | ||||||
| Other, net | 0.1 | 1.0 | ||||||
| Net cash flows provided by (used in) operating activities | 59.2 | (9.1) | ||||||
| Investing activities | ||||||||
| Additions to property, plant and equipment, net | (18.5) | (21.5) | ||||||
| Net cash flows used in investing activities | (18.5) | (21.5) | ||||||
| Financing activities | ||||||||
| Borrowings on long-term debt | — | 12.0 | ||||||
| Repayments of long-term debt | (23.5) | (12.2) | ||||||
| Taxes paid related to net share settlement of equity awards | (3.1) | (4.2) | ||||||
| Repurchases of common stock | (0.5) | (1.7) | ||||||
| Other, net | (0.4) | (0.1) | ||||||
| Net cash flows used in financing activities | (27.6) | (6.3) | ||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 13.2 | (37.0) | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 42.0 | 54.4 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 55.2 | $ | 17.4 | ||||
| Clearwater Paper Corporation | ||||||||
| Segment Information | ||||||||
| (Unaudited) | ||||||||
| Quarter Ended March 31, | ||||||||
| (In millions) | 2024 | 2023 | ||||||
| Segment net sales: | ||||||||
| Pulp and Paperboard | $ | 244.5 | $ | 278.8 | ||||
| Consumer Products | 253.1 | 248.3 | ||||||
| Eliminations | (1.4) | (1.7) | ||||||
| Total segment net sales | $ | 496.2 | $ | 525.4 | ||||
| Operating income (loss): | ||||||||
| Pulp and Paperboard | $ | 25.3 | $ | 57.1 | ||||
| Consumer Products | 31.5 | 4.2 | ||||||
| Corporate and eliminations | (18.5) | (20.4) | ||||||
Other operating charges, net 1 | (7.9) | (1.1) | ||||||
| Income from operations | $ | 30.4 | $ | 39.8 | ||||
1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the SEC for the period ended March 31, 2024 for the detailed breakout of this amount.
| Clearwater Paper Corporation | ||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||
| Adjusted EBITDA | ||||||||
| (Unaudited) | ||||||||
| Quarter Ended March 31, | ||||||||
| (In millions) | 2024 | 2023 | ||||||
| Net income | $ | 17.2 | $ | 23.8 | ||||
| Add back: | ||||||||
| Income tax provision | 7.0 | 8.4 | ||||||
| Interest expense, net | 6.5 | 7.6 | ||||||
| Depreciation and amortization | 23.2 | 24.8 | ||||||
Other operating charges, net 1 | 7.9 | 1.1 | ||||||
| Other non-operating income | (0.3) | (0.1) | ||||||
| Adjusted EBITDA | $ | 61.5 | $ | 65.7 | ||||
| Pulp and Paperboard segment income | $ | 25.3 | $ | 57.1 | ||||
| Depreciation and amortization | 8.4 | 9.1 | ||||||
| Adjusted EBITDA Pulp and Paperboard | $ | 33.7 | $ | 66.2 | ||||
| Consumer Products segment income | $ | 31.5 | $ | 4.2 | ||||
| Depreciation and amortization | 14.2 | 15.0 | ||||||
| Adjusted EBITDA Consumer Products | $ | 45.7 | $ | 19.2 | ||||
| Corporate and other expenses | $ | (18.5) | $ | (20.4) | ||||
| Depreciation and amortization | 0.6 | 0.6 | ||||||
| Adjusted EBITDA Corporate and other | $ | (17.9) | $ | (19.8) | ||||
| Pulp and Paperboard segment | $ | 33.7 | $ | 66.2 | ||||
| Consumer Products segment | 45.7 | 19.2 | ||||||
| Corporate and other | (17.9) | (19.8) | ||||||
| Adjusted EBITDA | $ | 61.5 | $ | 65.7 | ||||
1 Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the SEC for the period ended March 31, 2024 for the detailed breakout of this amount.
| Clearwater Paper Corporation | ||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||
| (Unaudited) | ||||||||
| Quarter Ended March 31, | ||||||||
| (In millions, except per share data) | 2024 | 2023 | ||||||
| Adjusted net income: | ||||||||
| Net income | $ | 17.2 | $ | 23.8 | ||||
| Add back: | ||||||||
| Income tax provision | 7.0 | 8.4 | ||||||
| Income before income taxes | 24.2 | 32.3 | ||||||
| Add back: | ||||||||
| Other operating charges, net | 7.9 | 1.1 | ||||||
| Adjusted income before tax | $ | 32.1 | $ | 33.4 | ||||
| Normalized income tax provision | 8.0 | 8.3 | ||||||
| Adjusted net income | $ | 24.1 | $ | 25.0 | ||||
| Weighted average diluted shares (thousands) | 16,895 | 17,036 | ||||||
| Adjusted income per diluted share | $ | 1.43 | $ | 1.47 | ||||
| March 31, 2024 | December 31, 2023 | |||||||
| Calculation of net debt: | ||||||||
| Current portion of long-term debt | $ | 0.9 | $ | 0.8 | ||||
| Long-term debt | 442.3 | 462.3 | ||||||
| Add back: | ||||||||
| Unamortized deferred debt costs | 4.9 | 5.1 | ||||||
| Less: | ||||||||
| Cash and cash equivalents | 55.2 | 42.0 | ||||||
| Net debt | $ | 392.9 | $ | 426.3 | ||||
Clearwater Paper Corporation
Investors contact:
Sloan Bohlen
Solebury Strategic Communications
509-344-5906
News media:
Jules Joy, Director, Corporate Communications
509-344-5967
CLEARWATER PAPER CORPORATION FIRST QUARTER EARNINGS RELEASE MATERIALS APRIL 29, 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 acquisition of the paperboard manufacturing facility and associated business in Augusta, Georgia; 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 Q2 2024 and full year 2024, 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: the expansion of our business through the acquisition of a paperboard manufacturing facility and associated business may not be completed or proceed as anticipated; our inability to realize the expected benefits of the acquisition because of integration difficulties or other challenges; 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; our 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
Overall • Net sales $496 million, down 6% versus Q1 2023 • Net income $17 million, down $7 million versus Q1 2023 • Adjusted net income $24 million, down $1 million versus Q1 2023 • Adjusted EBITDA $62 million, down $4 million versus Q1 2023 • $15 to $17 million impact from the extreme weather event at the Lewiston mill, primarily impacting paperboard Pulp and Paperboard • SBS prices down 11% versus Q1 2023, 1% lower versus Q4 2023 • Improved order entry and backlogs versus Q4 2023 • Planning for the Augusta mill acquisition in Q2 2024 Consumer Products • Tissue prices down 2% versus Q1 2023, 2% lower than Q4 2023 • Demand for private branded products remained strong • Strong operational performance and reduced input costs Capital Structure • Continued to maintain strong financial flexibility • Repurchased $1 million of stock to offset dilution, with $6 million remaining authorized under our stock repurchase program Q1 2024 BUSINESS HIGHLIGHTS © Clearwater Paper Corporation 2024 3
Industry (SBS) • Shipments, production, and operating rates increased in Q1 2024 versus Q4 2023 based on AF&PA data • Shipments (in tons) improved 7.1% from Q4 2023 • Production improved 10.5% from Q4 2023 • Operating rates increased to 88.3% in Q1 2024 from 79.3% in Q4 2023 • RISI reported $40/ton price decrease in February, for a total of $120/ton since Q3 of 2023 • RISI projecting demand recovery in 2024/2025 Clearwater Paper • Price down by 11% in Q1 2024 versus Q1 2023, down 1% versus Q4 2023 • Production impacted by extreme weather event at the Lewiston, Idaho mill during the quarter • Operated paper machines at full capacity utilization outside of unplanned downtime • Order entry and backlogs improved during Q1 BUSINESS UPDATE – PULP AND PAPERBOARD IMPROVING DEMAND AND HIGHER CAPACITY UTILIZATION © Clearwater Paper Corporation 2024 4
Industry • Consumers shifting to private brands with economic uncertainty and inflation • Private brand market share remained at 36%1 • Nearly 96% capacity utilization YTD February 2024 based on RISI data Clearwater Paper • Strong demand with Q1 2024 shipments of 13.1 million cases compared to 12.7 million cases in Q1 2023 and 13.5 million in Q4 2023 • Outstanding operational performance continued • Strong service levels with high on-time performance rates • Lower input costs in pulp, energy and freight as compared to Q1 2023, with moderating costs between Q4 2023 and Q1 2024 BUSINESS UPDATE – CONSUMER PRODUCTS SHIPMENTS STRENGTHENED; DEMAND REMAINED STRONG © Clearwater Paper Corporation 2024 5 1 Circana panel data for dollar share as of March 2024
© Clearwater Paper Corporation 2024 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 6 December 31, 2024 2023 2023 Net sales 496.2$ 525.4$ 512.8$ Cost of sales 421.6 448.5 437.4 Selling, general and adminstrative 36.2 36.0 36.8 Other operating charges, net 7.9 1.1 2.9 Income from operations 30.4 39.8 35.7 Non-operating expense (6.2) (7.5) (11.3) Income tax provision 7.0 8.4 6.8 Net income (loss) 17.2$ 23.8$ 17.6$ Diluted income per share 1.02$ 1.40$ 1.04$ Adjusted income per share 1.43$ 1.47$ 1.35$ Adjusted EBITDA 61.5$ 65.7$ 63.3$ March 31, Quarter Ended
© Clearwater Paper Corporation 2024 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) December 31, 2024 2023 2023 Net Sales Pulp and Paperboard 244.5$ 278.8$ 251.3$ Consumer Products 253.1 248.3 262.0 Eliminations (1.4) (1.7) (0.5) 496.2$ 525.4$ 512.8$ Operating Income Pulp and Paperboard 25.3$ 57.1$ 27.3$ Consumer Products 31.5 4.2 31.1 Corporate and other (18.5) (20.4) (19.8) Other operating charges, net (7.9) (1.1) (2.9) 30.4$ 39.8$ 35.7$ Adjusted EBITDA Pulp and Paperboard 33.7$ 66.2$ 36.8$ Consumer Products 45.7 19.2 45.7 Corporate and other (17.9) (19.8) (19.2) 61.5$ 65.7$ 63.3$ March 31, Quarter Ended 7
PULP AND PAPERBOARD Q1 2024 RESULTS Q1 2023 VS. Q1 2024 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 8 Lower pricing Lower input costs offset by higher repair and maintenance due to weather event Impact of weather event resulting in lower production and sales
CONSUMER PRODUCTS Q1 2024 RESULTS Q1 2023 VS. Q1 2024 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 9 Lower pulp, energy and freight costs Higher mix of conventional products and lower cost index driven pricing Higher production and shipments
© 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 12,900 shares at an average price of $40.71 per share in Q1 2024 • Reduced net debt by $33 million from Q4 2023 • Leverage ratio as of March 2024 is 1.38x $0.0 $0.0 $0.0 $0.0 $425.0 2024 2025 2026 2027 2028 Scheduled Debt Maturity Profile ($ in millions)2 Liquidity Profile ($ in millions)1 ABL Availability $260.2 Less Utilization (3.7) Plus Unrestricted Cash 55.2 Liquidity $311.7 1. ABL availability based on borrowing base calculations and consolidated balance sheet as of March 31, 2024, maximum capacity is $275 million 2. This chart excludes finance leases as of March 31, 2024. Current debt maturities include $275 million of 4.75% notes and $150 million Term Loan due 2028 10
OUTLOOK FOR Q2’24 AND 2024 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2024 Q2 2024: $23 to $33 million1 of adjusted EBITDA • Increasing paperboard demand and production volumes • Continued strong performance in tissue, offset by higher pulp costs • Impact of $40/ton price decrease in paperboard as reported by RISI in February • $35 - $40 million planned maintenance outage at Lewiston and additional maintenance at other sites • Partial insurance recovery for the Q1 2024 severe weather event in Lewiston FY 2024 operational assumptions vs. FY 2023 • Maintaining tissue margin improvement achieved in 2023 • $30 - $35 million planned major maintenance outage at Lewiston site • $40 - $50 million lower paperboard pricing offset by lower input costs • $15 - $25 million improved paperboard demand in second half of year 2024 other assumptions • Interest expense: $28 to $30 million • Depreciation and amortization expense: $97 to $100 million • CAPEX: $90 to $100 million • Taxes: effective rate ~25 to 26% Q2 and FY 2024 assumptions do not include impacts from planned Augusta acquisition 11 1 As there is uncertainty in connection with calculating the adjustments necessary to prepare reconciliations from Adjusted EBITDA to the comparable GAAP financial measure, the Company is unable to reconcile the Adjusted EBITDA projections without unreasonable efforts. Therefore, no reconciliation is being provided at this time. These items could result in significant adjustments from the most comparable GAAP measure.
APPENDIX © Clearwater Paper Corporation 2024 12
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q4 2023 VS. Q1 2024 ADJUSTED EBITDA © Clearwater Paper Corporation 2024 13 ($ IN MILLIONS) Lower pricing Lower maintenance offset by higher wages
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q4 2023 VS. Q1 2024 ADJUSTED EBITDA ($ IN MILLIONS) © Clearwater Paper Corporation 2024 14 Lower cost index driven pricing Higher energy costs
KEY SEGMENT INFORMATION Q1’2022 Q2’2022 Q3’2022 Q4’2022 Q1’2023 Q2’2023 Q3’2023 Q4’2023 Q1’2024 Pulp and Paperboard Sales ($ millions) $266.2 $295.8 $300.8 $273.5 $278.8 $272.3 $261.4 $251.3 $244.5 Adjusted EBITDA ($ millions) $59.5 $61.2 $73.0 $26.7 $66.2 $51.3 $53.1 $36.8 $33.7 Paperboard shipments (short tons) 201.4 215.9 208.3 189.0 189.4 186.2 187.9 188.0 187.3 Paperboard sales price ($/short ton) $1,263 $1,332 $1,405 $1,429 $1,441 $1,413 $1,350 $1,297 $1,284 Consumer Products Sales ($ millions) $223.0 $232.1 $240.9 $254.1 $248.3 $253.6 $259.3 $262.0 $253.1 Adjusted EBITDA ($ millions) $16.2 $19.1 $21.2 $17.6 $19.2 $39.7 $45.8 $45.7 $45.7 Shipments Retail (short tons in thousands) 75.4 76.6 76.9 80.8 76.8 78.7 80.5 81.5 79.9 Non-Retail (short tons in thousands) 5.1 2.6 2.3 2.2 1.0 0.1 1.4 2.3 2.3 Converted Products (cases in millions) 12.0 12.6 12.6 13.0 12.7 12.8 13.0 13.5 13.1 Sales Price ($ per short ton) Retail $2,872 $2,984 $3,082 $3,095 $3,201 $3,214 $3,198 $3,187 $3,138 Production Converted Products (cases in millions) 12.2 12.1 12.9 12.3 12.7 12.6 12.9 13.0 13.3 © Clearwater Paper Corporation 2024 15
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) December 31, 2024 2023 2023 Net income (loss) $ 17.2 $ 23.8 $ 17.6 Income tax provision 7.0 8.4 6.8 Interest expense, net 6.5 7.6 8.0 Depreciation and amortization expense 23.2 24.8 24.7 Other operating charges, net 7.9 1.1 2.9 Other non-operating expense (0.3) (0.1) 0.2 Debt retirement costs - - 3.1 Adjusted EBITDA $ 61.5 $ 65.7 $ 63.3 Pulp and Paperboard segment income $ 25.3 $ 57.1 $ 27.3 Depreciation and amortization 8.4 9.1 9.5 Adjusted EBITDA Paperboard segment $ 33.7 $ 66.2 $ 36.8 Consumer Products segment income $ 31.5 $ 4.2 $ 31.1 Depreciation and amortization 14.2 15.0 14.6 Adjusted EBITDA Consumer Products segment $ 45.7 $ 19.2 $ 45.7 Corporate and other expense $ (18.5) $ (20.4) $ (19.8) Depreciation and amortization 0.6 0.6 0.6 Adjusted EBITDA Corporate and other $ (17.9) $ (19.8) $ (19.2) Pulp and Paperboard segment $ 33.7 $ 66.2 $ 36.8 Consumer Products segment 45.7 19.2 45.7 Corporate and other (17.9) (19.8) (19.2) Adjusted EBITDA $ 61.5 $ 65.7 $ 63.3 March 31, Quarter Ended © Clearwater Paper Corporation 2024 16
© Clearwater Paper Corporation 2024 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) December 31, 2024 2023 2023 Net income 17.2$ 23.8$ 17.6$ Add back: Income tax provision 7.0 8.4 6.8 Income before income taxes 24.2 32.2 24.4 Add back: Debt retirement costs - 3.1 Other operating charges, net 7.9 1.1 2.9 Adjusted income before tax 32.1 33.4 30.4 Normalized income tax provision 8.0 8.3 7.6 Adjusted income 24.1$ 25.0$ 22.8$ Weighted average diluted shares (thousands) 16,895 17,036 16,867 Adjusted income per diluted share 1.43$ 1.47$ 1.35$ March 31, Quarter Ended 17
ADDITIONAL RECONCILIATIONS Net Debt Mar 31 ‘22 Jun 30 ‘22 Sep 30 ‘22 Dec 31 ‘22 Mar 31 ’23 Jun 30 ‘23 Sep 30 ‘23 Dec 31 ‘23 Mar 31‘24 Cash $ 36.4 $69.5 $50.8 $53.7 $16.7 $41.7 $110.2 $42.0 $55.2 Current debt 1.6 1.0 1.0 0.9 0.9 0.9 0.9 0.8 0.9 Long term debt 617.7 589.9 564.9 564.9 564.9 564.8 564.6 462.3 442.3 add: Deferred debt costs 4.4 3.8 3.6 3.4 3.2 3.0 3.0 5.1 4.9 Subtotal 623.7 594.7 569.5 569.2 569.0 568.7 568.5 468.3 448.1 Net debt $587.3 $525.2 $518.7 $515.5 $552.3 $527.0 $458.3 $426.3 $392.9 Free Cash Flow Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Cash from operations $41.1 $78.5 $13.3 $17.4 $(9.1) $46.0 $88.2 $65.6 $59.2 Additions to property, plant and equipment, net of proceeds from sales (7.9) (5.4) (6.7) (13.5) (21.5) (12.8) (14.2) (25.2) (18.5) Free cash flow $33.2 $73.1 $6.6 $3.9 $(30.6) $33.2 $74.0 $40.4 $40.7 ($ IN MILLIONS) © Clearwater Paper Corporation 2024 18
$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 19 1,2 $30 - $35 2025 or 2026 expected