Clearwater Paper Reports First Quarter 2024 Results

"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." – Arsen Kitch, President and CEO, Clearwater Paper.

April 30, 2024 - Clearwater Paper Corporation (NYSE:CLW) [on April 29] 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.

Clearwater Paper is a premier supplier of private brand tissue to major retailers, including grocery, club, mass merchants, and discount stores. In addition, the company produces paperboard used by quality-conscious printers and packaging converters, and offers services that include custom sheeting, slitting, and cutting.

SOURCE: Clearwater Paper Corporation