Clearwater Paper Posts Fourth Quarter 2010 Earnings
March 3, 2011 - Clearwater Paper Corporation reported financial results for the fourth quarter ended December 31, 2010. Net earnings for the fourth quarter of 2010, were $37.8 million, or $3.19 per diluted common share, compared to net earnings of $47.2 million, or $4.01 per diluted common share, for the fourth quarter of 2009.
Clearwater Paper acquired Cellu Tissue Holdings, Inc. on December 27, 2010. The company’s fourth quarter 2010 results included four days of Cellu Tissue’s operating results and acquisition related expenses.
Excluding $10.5 million in after-tax charges related to the Cellu Tissue acquisition and a $27.1 million benefit related to a Cellulosic Biofuel Producer Credit, fourth quarter 2010 earnings were $21.2 million or $1.79 per diluted common share. Fourth quarter 2009 results included a $29.7 million benefit, or $2.53 per diluted common share, related to the Alternative Fuel Mixture Tax Credit. Excluding the Alternative Fuel Mixture Tax Credit, fourth quarter 2009 earnings were $17.4 million, or $1.48 per diluted common share.
"We had a solid finish to a year in which we had very strong operational execution while also making significant strides on the strategic front,” said Gordon Jones, chairman, president and chief executive officer. “In the last week of the year we closed the Cellu Tissue acquisition, which significantly enhances our ability to supply existing and new customers and provides us a nationwide manufacturing footprint.”
“Throughout the year we also made great progress in the construction of our new facility in North Carolina, which will provide more premium products to our customers. We believe these accomplishments put us in a very strong competitive position for the future,” concluded Jones.
FOURTH QUARTER 2010 SEGMENT PERFORMANCE
Net sales in the consumer products segment were $142.9 million for the fourth quarter of 2010, an increase of 3.3% over fourth quarter 2009 net sales of $138.3 million. Operating income for the quarter was $7.3 million, compared with operating income of $28.7 million for the fourth quarter of 2009.
- The slight increase in net sales was primarily a result of the inclusion of Cellu Tissue’s operating results for the last four days of the quarter.
- Volume increased by 6.6% in the fourth quarter of 2010 compared to 2009, partially offset by net selling prices that were 3.2% lower in the quarter.
- Operating income for the 2010 fourth quarter was lower primarily due to significantly higher pulp costs and $6.4 million of acquisition related expenses reflected in segment results.
Pulp and Paperboard
Net sales of $222.5 million for the fourth quarter of 2010 were up 16.5% compared to fourth quarter 2009 net sales of $191.1 million. Operating income for the quarter was $33.1 million, compared to operating income of $52.9 million for the fourth quarter of 2009, which included $47.1 million pre-tax associated with the Alternative Fuel Mixture Tax Credit.
- Higher net sales for the quarter were primarily the result of a 9.0% increase in paperboard pricing and a 24.8% increase in pulp prices compared to fourth quarter 2009.
- Pulp shipments were up 81.2% over the 2009 fourth quarter, while paperboard shipments were flat compared to fourth quarter 2009.
The company recorded a net benefit of $25.7 million in the fourth quarter of 2010 primarily related to the Cellulosic Biofuel Producer Credit. The effective tax rate for 2010, excluding discrete items, was approximately 33%.
Note Regarding Use of Non-GAAP Financial Measures
In this press release, the company presents its results for the fourth quarter of 2009, excluding income from the Alternative Fuel Mixture Tax Credit, and its results for the fourth quarter of 2010 excluding Cellu Tissue acquisition related expenses, Patient Protection and Affordable Care Act and the Cellulosic Biofuel Producer Credit. These amounts are not in accordance with generally accepted accounting principles (GAAP) and accordingly reconciliations of these amounts to net earnings determined in accordance with GAAP are included at the end of this press release.
Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, parent roll tissue, machine glazed tissue, bleached paperboard, pulp and wood products at 14 manufacturing locations in the U.S. and Canada. The company is a premier supplier of private label tissue to major retailers and wholesale distributors. This includes grocery, drug, mass merchants and discount stores. The company also produces bleached paperboard used by quality-conscious printers and packaging converters.
SOURCE: Clearwater Paper Corp