Clearwater Paper Reports Third Quarter Earnings
Oct. 28, 2010 - Clearwater Paper Corp. today reported financial results for the third quarter ended September 30, 2010. Third quarter net sales increased 6.5% to $352.9 million from $331.5 million in the third quarter of 2009. Net earnings for the third quarter of 2010 were $15.0 million, or $1.27 per diluted share compared to net earnings of $46.2 million, or $3.92 per diluted share, for the third quarter of 2009. Third quarter 2009 results included income of $2.52 per diluted share for the alternative fuel mixture tax credit. Excluding the alternative fuel mixture tax credit, third quarter 2009 net earnings would have been $16.5 million or $1.40 per diluted share.
After adjusting for $3.1 million in pre-tax transaction costs related to the pending acquisition of Cellu Tissue Holdings, Inc., third quarter 2010 net earnings were $16.9 million or $1.43 per diluted share. Additionally, the company had scheduled major maintenance costs of $4.0 million in the third quarter of 2010 compared to $1.1 million in the third quarter of 2009, representing an increase of $2.9 million or an estimated after-tax $0.15 per diluted share impact on third quarter results.
"We continued to experience sales growth in our Consumer Products and Pulp and Paperboard businesses and we have made progress on executing our growth initiatives. We recently completed the debt financing in anticipation of the Cellu Tissue acquisition at very attractive borrowing rates, and we continue to make good progress and remain on schedule with the construction of our new facilities in Shelby, North Carolina," said Gordon Jones, chairman, president and chief executive officer.
THIRD QUARTER 2010 SEGMENT PERFORMANCE
Net sales of $144.0 million for the third quarter of 2010 were 2.7% higher than third quarter 2009 net sales of $140.2 million. Operating income for the quarter was $10.8 million, compared with operating income of $32.1 million for the third quarter of 2009.
- The increase in net sales was driven by a 4.3% increase in volume, partially offset by 1.6% lower net selling prices driven by increased customer product promotions.
- Operating income was lower primarily as a result of significantly higher pulp costs.
Pulp and Paperboard
Net sales of $231.5 million for the third quarter of 2010 were up 13.3% compared to third quarter 2009 net sales of $204.2 million. Operating income for the quarter was $28.2 million, compared to operating income of $53.5 million for the third quarter of 2009, which included $47.1 million associated with the alternative fuel mixture tax credit.
- Higher net sales for the quarter were primarily the result of paperboard pricing that increased 12.6%, pulp prices that increased 42.8% and product mix improvements.
- Paperboard shipments decreased 7.0% partially due to scheduled major maintenance downtime during the third quarter of 2010.
- Operating income included $4.0 million in scheduled major maintenance expense at our Arkansas facility in the third quarter of 2010.
The company's effective income tax rate for the third quarter of 2010 was 39.3% compared to 36.9% for the same period last year. The tax rate for the third quarter of 2010 includes interest expense related to our uncertain tax positions primarily related to whether our alternative fuel mixture tax credit is subject to income taxation. The annual estimated effective tax rate for 2010, excluding discrete items, is approximately 34.8%.
SOURCE: Clearwater Paper Corp.