Clearwater Paper Reports Third Quarter 2019 ResultsOct. 25, 2019 - Clearwater Paper Corporation (NYSE:CLW) [on Oct. 24] reported financial results for the third quarter of 2019. The company reported net sales of $445.2 million for the third quarter of 2019, which were $18.7 million or 4.4% higher than net sales of $426.5 million for the third quarter of 2018. The increase was due to higher net paperboard and tissue pricing from previously announced price changes and higher retail tissue shipments. These items were partially offset by lower non-retail tissue shipments primarily resulting from the sale of the company's mill in Ladysmith, Wisconsin in August 2018. Net loss determined in accordance with generally accepted accounting principles, or GAAP, for the third quarter of 2019 was $11.0 million, or $0.66 per diluted share, compared to net earnings for the third quarter of 2018 of $34.4 million, or $2.08 per diluted share. The decrease in net earnings was due to planned major maintenance at the company's Lewiston, Idaho mill, higher input costs for pulp and wood fiber and increased depreciation and interest expense. Excluding certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, third quarter 2019 adjusted net loss was $8.3 million, or $0.50 per diluted share, compared to third quarter 2018 adjusted net earnings of $22.3 million, or $1.35 per diluted share. Earnings before interest, taxes, depreciation and amortization, or EBITDA, were $28.1 million for the third quarter of 2019, compared to $71.0 million for the third quarter of 2018. Adjusted EBITDA for the quarter was $30.9 million, compared to third quarter 2018 Adjusted EBITDA of $50.1 million. The decrease was due to the planned major maintenance at the Idaho mill in the third quarter of 2019.
“Compared to our outlook, we performed well during the third quarter, with continued strong pulp and paperboard production and higher retail tissue shipments, which enabled us to achieve solid results,” said Linda Massman, president and chief executive officer. “We successfully completed the major maintenance outage at our Lewiston, Idaho mill and determined we will move into 2020 with no planned major maintenance outages. Our new Shelby, North Carolina facility is meeting all customer quality expectations on ultra and premium grades and we are currently meeting our targeted production volume. We are also happy to report that tissue sales have increased 8% year over year. Our long-term focus remains on improving our operational capabilities to ensure we are well-positioned to generate cash flow to de-lever our balance sheet.” THIRD QUARTER 2019 SEGMENT PERFORMANCEConsumer ProductsNet sales in the Consumer Products segment were $228.5 million for the third quarter of 2019, up 8.0% compared to third quarter 2018 net sales of $211.6 million. This increase was due to higher retail tissue volumes sold, higher average prices for both retail and non-retail tissue products and a favorable mix shift to a higher percentage of retail shipments, partially offset by the impact from the divestiture of the Ladysmith, Wisconsin mill in August 2018. In the third quarter of 2019, converted case shipments reached 13.2 million cases, an increase of 11.6% compared to 11.8 million cases shipped in the third quarter of 2018, due to growth in business with both new and existing customers. Segment operating loss for the third quarter of 2019 was $4.4 million, compared to operating income of $21.7 million in the third quarter of 2018. After adjusting for certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, adjusted operating loss was $4.4 million for the third quarter of 2019, compared to an adjusted operating loss of $1.0 million for the same period in 2018. The increased operating loss was primarily due to higher internal pulp costs due to planned major maintenance at the Idaho mill and higher depreciation expense resulting from the completion of the Shelby mill expansion. Adjusted EBITDA for the segment was $14.6 million in the third quarter of 2019, up from $13.4 million in the third quarter of 2018. The increase was primarily due to improved retail shipment volumes, pricing and mix, partially offset by higher maintenance costs and lower non-retail tissue shipments resulting from the divestiture of the Ladysmith mill. Tissue Sales Volumes and Prices:Total tissue volumes sold were 86,408 tons in the third quarter of 2019, a decrease of 2,452 tons or 2.8% compared to 88,860 tons in the third quarter of 2018. Retail volumes represented 92% of total volumes sold in the third quarter of 2019, up from 79% in the third quarter of 2018. Converted product cases shipped increased 11.6% to 13.2 million in the third quarter of 2019, compared to the 11.8 million cases shipped in the third quarter of 2018. Average tissue net selling prices increased 10.7% to $2,635 per ton in the third quarter of 2019, compared to $2,381 per ton in the third quarter of 2018. The increase was due to a significant reduction in parent roll sales resulting from the divestiture of the Ladysmith mill, previously announced price increases and a higher mix of ultra-quality tissue products. Pulp and PaperboardNet sales in the Pulp and Paperboard segment were $216.6 million for the third quarter of 2019, up 0.9% compared to third quarter 2018 net sales of $214.8 million. The increase was due to higher paperboard prices from previously announced increases, partially offset by lower sales volume. Segment operating income and margin for the third quarter of 2019 were $17.1 million and 7.9%, compared to $38.3 million and 17.8%, respectively, for the third quarter of 2018. Adjusted EBITDA for the segment was $28.3 million in the third quarter of 2019, compared to $47.7 million in the third quarter of 2018. The decrease in operating income and adjusted EBITDA was primarily due to planned major maintenance at the company's Idaho mill, partially offset by higher paperboard prices. Paperboard Sales Volumes and Prices: Paperboard sales volumes were 214,537 tons in the third quarter of 2019, a decrease of 1.6% compared to 218,135 tons in the third quarter of 2018. Paperboard average net selling price increased 1.9% to $1,004 per ton for the third quarter of 2019, compared to $985 per ton in the third quarter of 2018. TaxesThe company's consolidated GAAP tax rate for the third quarter of 2019 was a benefit of 44.3%, compared to a provision of 9.6% in the third quarter of 2018. The tax benefit in the current quarter resulted from the pre-tax loss for the quarter. Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, parent roll tissue, bleached paperboard and pulp at manufacturing facilities across the nation. The company is a premier supplier of private label tissue to major retailers and wholesale distributors, including grocery, drug, 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. To learn more, visit: www.clearwaterpaper.com. SOURCE: Clearwater Paper Corporation |
