"Our tissue business continues to deliver outstanding performance, and we are expecting a gradual recovery in paperboard market demand in the coming quarters." – Arsen Kitch, President and CEO, Clearwater Paper.
Aug. 6, 2024 - Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the second quarter and six months ended June 30, 2024.
"We completed the acquisition of the Augusta facility in May and our integration is on track. We are pleased with the quality of the assets and are committed to achieving our targeted synergies by the end of 2026," said Arsen Kitch, president and chief executive officer. "Our tissue business continues to deliver outstanding performance, and we are expecting a gradual recovery in paperboard market demand in the coming quarters."
On July 22, 2024, the company announced that it has signed definitive agreements to sell its consumer products division (tissue business) to Sofidel America Corp. for $1.06 billion, subject to customary adjustments. The transaction is subject to regulatory approval other customary closing conditions and is currently expected to close in the fourth quarter of 2024.
"We thoroughly explored strategic options for our tissue business and believe that Sofidel will be well positioned to continue investing in these assets for long-term growth," said Kitch. "This is a transformational time for Clearwater paper, and we are looking forward to the next chapter of value creation as we continue our strategy to scale and grow our paperboard business."
For the second quarter of 2024, Clearwater Paper reported net sales of $586 million compared to net sales of $525 million for the second quarter of 2023. Clearwater Paper reported a net loss for the second quarter of 2024 of $26 million, or $1.55 per diluted share, compared to net income for the second quarter of 2023 of $30 million, or $1.75 per diluted share. Adjusted EBITDA for the second quarter of 2024 was $35 million, compared to the second quarter of 2023 Adjusted EBITDA of $71 million.
For the first six months of 2024, Clearwater Paper reported net sales of $1.1 billion, a 3% increase compared to net sales of $1 billion for the first six months of 2023. Clearwater Paper reported a net loss for the first six months of 2024 of $9 million, or $0.52 per diluted share, compared to net income for the first six months of 2023 of $54 million, or $3.15 per diluted share. Adjusted EBITDA for the first six months of 2024 was $97 million, compared to the first six months of 2023 Adjusted EBITDA of $137 million.
Net sales in the Pulp and Paperboard segment were $334 million for the second quarter of 2024, up 23% compared to second quarter 2023 net sales of $272 million. Segment operating loss for the second quarter of 2024 was $12 million, compared to operating income of $42 million for the second quarter of 2023. Adjusted EBITDA for the segment was $11 million in the second quarter of 2024, compared to $51 million in the second quarter of 2023. The decrease in operating income and Adjusted EBITDA was driven by lower sales prices and the impacts of the company's planned major maintenance outage at its Lewiston, Idaho facility, partially offset by lower wood costs and an insurance recovery realized in the second quarter of 2024 related to a significant weather event at its Lewiston, Idaho facility which occurred in the first quarter of 2024.
Net sales in the Pulp and Paperboard segment were $578 million for the first six months of 2024, up 5% compared to net sales of $551 million in the first six months of 2023. Segment operating income for the first six months of 2024 was $13 million, compared to $99 million for the first six months of 2023. Adjusted EBITDA for the segment was $45 million in the first six months of 2024, compared to $118 million in the first six months of 2023. The decrease in operating income and Adjusted EBITDA was primarily driven by lower sales prices and the impacts of the company's planned major maintenance outage at its Lewiston Idaho facility, partially offset by lower wood costs.
Pulp and Paperboard Sales Volumes and Prices:
Paperboard sales volumes were 272,585 tons in the second quarter of 2024, an increase of 46% compared to 186,160 tons in the second quarter of 2023. Paperboard sales volumes were 459,888 tons in the first six months of 2024, an increase of 22.5% compared to 375,558 tons in the first six months of 2023.
Paperboard average net selling price decreased 14% to $1,216 per ton for the second quarter of 2024, compared to $1,413 per ton in the second quarter of 2023. Paperboard average net selling price decreased 13% to $1,244 per ton for the first six months of 2024, compared to $1,428 per ton in the first six months of 2023.
Net sales in the Consumer Products segment were $253 million for the second quarter of 2024, flat compared to second quarter 2023 net sales of $254 million. Segment operating income for the second quarter of 2024 was $27 million compared to operating income of $25 million in the second quarter of 2023. Adjusted EBITDA for the segment was $41 million in the second quarter of 2024, compared to $40 million in the second quarter of 2023. The increases in operating income and Adjusted EBITDA were driven by higher volumes and lower input costs partially offset by lower sales prices.
Net sales in the Consumer Products segment were $506 million for the first six months of 2024, up 1% compared to net sales of $502 million in the first six months of 2023. Segment operating income for the first six months of 2024 was $59 million compared to operating income of $29 million in the first six months of 2023. Adjusted EBITDA for the segment was $87 million in the first six months of 2024, compared to $59 million in the first six months of 2023. The increase in operating income and Adjusted EBITDA was driven by higher volumes and lower input costs offset by lower sales prices.
Retail Tissue Sales Volumes and Prices:
Retail tissue volumes sold were 81,196 tons in the second quarter of 2024, an increase of 3% compared to 78,672 tons in the second quarter of 2023. Retail tissue volumes sold were 161,125 tons in the first six months of 2024, an increase of 4% compared to 155,520 tons in the first six months of 2023.
Retail tissue average net selling price decreased 3% to $3,104 per ton in the second quarter of 2024, compared to $3,214 per ton in the second quarter of 2023. Retail tissue average net selling price decreased 3% to 3,121 per ton in the first six months of 2024, compared to $3,207 per ton in the first six months of 2023.
"We remain confident in the long-term fundamentals of the paperboard market and expect gradual demand recovery for the balance of 2024 and into 2025. We currently expect to close the sale of our tissue business in the fourth quarter of 2024, subject to customary closing conditions and regulatory approval. Our plan is to use the proceeds to de-lever our balance sheet and continue executing our strategy to grow and diversify our paperboard product portfolio," 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
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