Clearwater Paper Corporation (NYSE:CLW), a premier
independent supplier of bleached paperboard to North American
converters, today reported financial results for the fourth quarter
and year ended December 31, 2024.
With the completion of the sale of our tissue business on
November 1, 2024, all periods presented include our former tissue
segment as discontinued operations and the paperboard segment plus
corporate expenses as continuing operations. Total operations
includes both continuing and discontinued operations.
2024 FULL YEAR HIGHLIGHTS
- Acquired Augusta, Georgia paperboard facility on May 1, 2024;
sold tissue business on November 1, 2024
- Net sales from continuing operations of $1.4 billion, up 22%
compared to 2023, primarily due to incremental volume from our
Augusta acquisition
- Net sales from total operations of $2.2 billion, up 6% compared
to 2023
- Net loss from continuing operations of $74 million, or 4.41 per
diluted share compared to net income from continuing operations of
$49 million, or $2.85 per diluted share in the last year
- Net income from total operations of $196 million or $11.70 per
diluted share, which includes the gain on sale of our tissue
operations of $307 million ($219 million after tax or $13.11 per
diluted share) compared to $108 million, or $6.30 per diluted share
in last year
- Adjusted EBITDA from total operations of $182 million compared
to $281 million last year, down primarily due to lower paperboard
pricing
- Reduced net debt by $199 million, repurchased $10 million of
outstanding shares
“2024 was a transformational year for Clearwater Paper. We took
significant steps to focus our strategy on becoming a paperboard
packaging company. We acquired a high-quality manufacturing
facility in Augusta, Georgia, increasing our paperboard capacity by
nearly 75% and improving our geographic footprint in North
America,” said Arsen Kitch, president and chief executive officer.
“We also divested our tissue business for $1.06 billion at closing
and used the proceeds to de-lever our balance sheet and position
the company for future growth in paperboard.”
OVERALL FOURTH QUARTER AND FULL YEAR RESULTS
Net sales from total operations were $483 million for the fourth
quarter of 2024, down 6% compared to fourth quarter 2023 net sales
of $513 million. Net income from total operations for the fourth
quarter of 2024 was $199 million, or $11.91 per diluted share which
includes $307 million of gain on sale of the tissue division ($219
million after tax) compared to $18 million for the fourth quarter
of 2023, or $1.06 per diluted per share. Adjusted EBITDA from total
operations was $21 million in the fourth quarter of 2024, compared
to $63 million in the fourth quarter of 2023. The increase in net
income was driven by the gain on the sale of our tissue operation,
offset by lower sales prices and the planned major maintenance at
our Augusta, Georgia facility. The decrease in our total company
Adjusted EBITDA was driven by the planned major maintenance at our
Augusta, Georgia facility, lower sales prices and the divestiture
of our tissue operations on November 1, 2024.
Net sales from total operations were $2.2 billion for 2024, an
increase of 6% compared to 2023 net sales of $2.1 billion. Net
income for 2024 was $196 million, or $11.70 per diluted share,
compared to $108 million for 2023, or $6.30 per diluted share.
Adjusted EBITDA from total operations was $182 million for 2024,
compared to $281 million for 2023. The increase in net income was
driven by the gain on the sale of our tissue operation, offset by
lower sales prices. The decrease in our total company Adjusted
EBITDA was driven by lower sales prices and higher maintenance
costs partially offset by higher sales and production volume due to
our acquisition of the Augusta facility.
Sales Volumes and Prices:
- Sales volumes were 306,692 tons in the fourth quarter of 2024,
an increase of 63% compared to 188,018 tons in the fourth quarter
of 2023. Sales volumes were 1,080,898 tons for the year ended 2024
compared to 751,520 tons for the year ended 2023.
- Paperboard average net selling price decreased 9% to $1,177 per
ton for the fourth quarter of 2024, compared to $1,297 per ton in
the fourth quarter of 2023. Paperboard average net selling price
decreased 12% to $1,210 per ton for the year ended 2024, compared
to $1,375 per ton for the year ended 2023.
COMPANY OUTLOOK
“We continue to experience challenging SBS industry conditions,
with supply exceeding demand, but we remain optimistic about the
future growth prospects of paperboard packaging. We are taking
actions to address the resulting near term margin pressure by
reducing fixed costs, including eliminating more than 10% of all
positions across the company. These combined actions should deliver
$30 to $40 million in cost savings in 2025. While our industry is
currently in a down cycle, we continue to invest in our assets to
ensure that they remain competitive in the long-run,” concluded
Kitch.
WEBCAST INFORMATION
Clearwater Paper Corporation will discuss these results during
an earnings conference call that begins at 2:00 p.m. Pacific Time
on February 13, 2025. A live webcast and accompanying supplemental
information will be available on the company's website. A replay of
the conference call will be available on the website beginning at
5:00 p.m. Pacific Time the same day.
ABOUT CLEARWATER PAPER CORPORATION
Clearwater Paper is a premier independent supplier of paperboard
packaging products to North American converters. Headquartered in
Spokane, Washington, our team produces high-quality paperboard that
provides sustainable packaging solutions for consumer goods and
food service applications. For additional information, please visit
our website at www.clearwaterpaper.com.
USE OF NON-GAAP MEASURES
In this press release, the company presents certain non-GAAP
financial information for the quarter and years ended December 31,
2024 and 2023, including Adjusted EBITDA from total operations
which includes both continuing and discontinued operations and net
sales from total operations which includes both continuing and
discontinued. Because these amounts are not in accordance with
GAAP, reconciliations to net income as determined in accordance
with GAAP are included in the tables at the end of this press
release. The company presents these non-GAAP metrics because
management believes they assist investors and analysts in comparing
the company's performance across reporting periods on a consistent
basis by excluding items that the company does not believe are
indicative of its core operating performance. In addition, the
company uses Adjusted EBITDA from total operations: (i) as a factor
in evaluating management’s performance when determining incentive
compensation, (ii) to evaluate the effectiveness of the company's
business strategies, and (iii) because the company's credit
agreement and the indentures governing the company's outstanding
notes use metrics similar to Adjusted EBITDA from total operations
to measure the company's compliance with certain covenants.
FORWARD-LOOKING STATEMENTS
This press release contains certain “forward-looking” statements
within the meaning of Section 27A of Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended by the Private Securities Litigation Reform Act of 1995 as
amended, including statements regarding: the recent sale of the
company’s consumer products division (tissue business); the
company’s expectations regarding paperboard demand; the company’s
paperboard strategy, including the company’s plans to grow the
company’s paperboard business; the company’s expectation that
paperboard represents the best opportunity for steady and
sustainable value creation; cost structure improvements and cost
saving initiatives; the company’s continued investment in the
company’s business; and the company’s ability to take advantage of
strategic opportunities as they arise. These forward-looking
statements are based on management’s current expectations,
estimates, assumptions and projections that are subject to change.
The company’s actual results of operations may differ materially
from those expressed or implied by the forward-looking statements
contained in this press release. Factors that could cause or
contribute to such material differences in actual results include,
but are not limited to: there may be unexpected costs, charges or
expenses resulting from the recent tissue business sale
transaction, including purchase price adjustments; competitive
responses to the recent tissue business sale transaction;
achievement of anticipated financial results and other benefits of
the recent tissue business sale transaction; potential risks
associated with operating without the tissue business, including
less diversification in products offered; changes in the company’s
capital structure; there may be stockholder litigation in
connection with the recent tissue business sale transaction or the
acquisition of the Augusta, Georgia paperboard manufacturing
facility or other settlements; the company’s inability to realize
the expected benefits of the Augusta, Georgia paperboard
manufacturing facility acquisition because of integration
difficulties or other challenges; risks relating to the integration
of the Augusta, Georgia paperboard manufacturing facility and
achievement of anticipated financial results and other benefits of
the acquisition; competitive pricing pressures for the company’s
products, including as a result of capacity additions, demand
reduction and the impact of foreign currency fluctuations on the
pricing of products globally; changes in the U.S. and international
economies and in general economic conditions in the regions and
industries in which we operate; cyclical industry conditions;
manufacturing or operating disruptions, including equipment
malfunctions and damage to the company’s manufacturing facilities;
the loss of, changes in prices in regard to, or reduction in,
orders from a significant customer; changes in the cost and
availability of wood fiber and wood pulp; changes in energy,
chemicals, packaging and transportation costs and disruptions in
transportation services impacting the company’s ability to receive
inputs or ship products to customers; reliance on a limited number
of third- party suppliers, vendors and service providers required
for the production of the company’s products and the company’s
operations; changes in customer product preferences and
competitors’ product offerings; labor disruptions; cyber-security
risks; larger competitors having operational, financial and other
advantages; consolidation and vertical integration of converting
operations in the paperboard industry; the company’s ability to
execute on the company’s growth and expansion strategies; the
company’s ability to successfully execute capital projects and
other activities to operate the company’s assets, including
effective maintenance, implement the company’s operational
efficiencies and realize higher throughput or lower costs; IT
system disruptions and IT system implementation failures; changes
in expenses, required contributions and potential withdrawal costs
associated with the company’s pension plans; environmental
liabilities or expenditures and climate change; the company’s
ability to attract, motivate, train and retain qualified and key
personnel; the company’s ability to service the company’s debt
obligations and restrictions on the company’s business from debt
covenants and terms; changes in the company’s banking relations, or
in the company’s customer supply chain financing; negative changes
in the company’s credit agency ratings; changes in laws,
regulations or industry standards affecting the company’s business;
and other risks and uncertainties described from time to time in
the company’s public filings with the Securities and Exchange
Commission, including the company’s Annual Report on Form 10-K for
the year ended December 31, 2023. The forward-looking statements
are made as of the date of this press release and the company does
not undertake to update any forward-looking statements based on new
developments or changes in the company’s expectations after the
date of this press release.
Clearwater Paper
Corporation
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(In millions, except per share
data)
2024
2023
2024
2023
Net sales
$
387.1
$
268.6
$
1,383.6
$
1,136.0
Costs and expenses:
Cost of sales
372.4
232.7
1,307.5
935.3
Selling, general and administrative
expenses
26.7
31.4
116.7
119.4
Other operating charges, net
3.7
2.1
24.0
3.2
Total operating costs and expenses
402.8
266.2
1,448.1
1,057.9
Income (loss) from operations
(15.7
)
2.5
(64.5
)
78.1
Interest expense, net
(5.3
)
(1.6
)
(29.2
)
(9.5
)
Debt retirement costs
(9.1
)
(3.1
)
(9.1
)
(3.1
)
Other non-operating expense (income)
0.7
(0.2
)
1.8
0.1
Total non-operating expense
(13.6
)
(4.8
)
(36.6
)
(12.5
)
Income (loss) from continuing operations
before income taxes
(29.3
)
(2.3
)
(101.1
)
65.6
Income tax provision (benefit)
(9.7
)
0.2
(27.1
)
16.9
Income (loss) from continuing
operations
(19.6
)
(2.5
)
(74.0
)
48.7
Income from discontinued operations
4.4
26.9
73.3
78.6
Gain on sale - discontinued operations
307.2
—
307.2
—
Income from discontinued operations before
income taxes
311.6
26.9
380.6
78.6
Income tax provision
92.8
6.7
110.2
19.6
Income from discontinued operations
218.8
20.2
270.3
59.0
Net income
$
199.1
$
17.6
$
196.3
$
107.7
Net income per common share:
Income (loss) per share from continuing
operations - basic
$
(1.17
)
$
(0.15
)
$
(4.41
)
$
2.89
Income per share from discontinued
operations - basic
13.08
1.21
16.11
3.50
Net income per share - basic
11.91
1.06
11.70
6.39
Income (loss) per share from continuing
operations - diluted
(1.17
)
(0.15
)
(4.41
)
2.85
Income per share from discontinued
operations - diluted
13.08
1.21
16.11
3.45
Net income per share - diluted
$
11.91
$
1.06
$
11.70
$
6.30
Average shares outstanding (in
thousands):
Basic
16,724
16,638
16,781
16,863
Diluted
16,724
16,638
16,781
17,091
Clearwater Paper
Corporation
Condensed Consolidated Balance
Sheets
(Unaudited)
(In millions)
December 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
79.6
$
42.0
Receivables, net
188.7
96.1
Inventories, net
258.0
161.2
Other current assets
19.1
17.4
Current assets of discontinued
operations
—
247.5
Total current assets
545.4
564.1
Property, plant and equipment
2,328.4
1,608.6
Accumulated depreciation and
amortization
(1,305.4
)
(1,247.9
)
Property, plant and equipment, net
1,023.1
360.7
Goodwill and intangible assets, net
52.9
41.5
Other assets, net
57.9
47.6
Long term assets of discontinued
operations
—
657.9
Total Assets
$
1,679.2
$
1,671.8
Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of long-term debt
$
0.6
$
—
Accounts payable and accrued
liabilities
319.7
195.5
Current liabilities of discontinued
operations
—
90.5
Total current liabilities
320.4
286.0
Long-term debt
281.6
439.9
Liability for pension and other
postretirement employee benefits
52.5
54.5
Deferred tax liabilities and other
long-term obligations
170.2
84.6
Long term liabilities of discontinued
operations
—
138.1
Total Liabilities
824.7
1,003.0
Common stock
—
—
Additional paid-in capital
11.5
14.9
Treasury stock
(3.3
)
—
Retained earnings
880.8
684.5
Accumulated other comprehensive loss, net
of tax
(34.5
)
(30.7
)
Total Stockholders' Equity
854.6
668.8
Total Liabilities and Stockholders'
Equity
$
1,679.2
$
1,671.8
Clearwater Paper
Corporation
Consolidated Statements of
Cash Flows
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(In millions)
2024
2023
2024
2023
Operating Activities
Net income
$
199.1
$
17.6
$
196.3
$
107.7
Adjustments to reconcile net income to net
cash flows provided by (used in) operating activities:
Depreciation and amortization
21.5
24.7
99.8
98.6
Equity-based compensation expense
(1.6
)
3.0
5.6
9.9
Deferred taxes
49.0
(7.6
)
39.0
(14.9
)
Defined benefit pension and other
postretirement employee benefits
(1.0
)
(0.5
)
(4.2
)
(2.0
)
Gain on sale of business
(307.2
)
—
(307.2
)
—
Amortization of deferred debt costs and
debt retirement
9.8
3.4
11.8
4.4
Loss on sale or impairment associated with
assets
0.3
0.7
1.9
2.1
Changes in operating assets and
liabilities, net of acquisitions and divestitures:
(Increase) decrease in accounts
receivable
4.2
(9.2
)
(58.1
)
(1.3
)
(Increase) decrease in inventories
18.0
14.1
12.4
4.0
(Increase) decrease in other current
assets
(6.0
)
(7.8
)
(2.5
)
0.8
Increase (decrease) in accounts payable
and accrued liabilities
(19.6
)
25.6
70.2
(21.3
)
Other, net
(1.1
)
1.5
(3.0
)
2.6
Net cash flows provided by (used in)
operating activities
(34.7
)
65.6
61.8
190.7
Investing Activities
Additions to property, plant and
equipment, net
(33.0
)
(25.2
)
(116.6
)
(73.7
)
Acquisition of business
(0.4
)
—
(708.6
)
—
Proceeds from business divestiture
992.5
—
992.5
—
Net cash flows provided by (used in)
investing activities
959.1
(25.2
)
167.3
(73.7
)
Financing Activities
Borrowings on long-term debt
—
210.0
753.4
222.0
Repayments of long-term debt
(880.2
)
(312.9
)
(931.1
)
(325.6
)
Taxes paid related to net share settlement
of equity awards
—
—
(4.1
)
(4.7
)
Repurchases of common stock
(3.9
)
(2.8
)
(10.0
)
(17.9
)
Payments for debt issuance costs
(0.7
)
(2.9
)
(5.6
)
(3.1
)
Other, net
4.6
—
5.9
—
Net cash flows used in financing
activities
(880.3
)
(108.6
)
(191.4
)
(129.3
)
Increase (decrease) in cash, cash
equivalents and restricted cash
44.1
(68.2
)
37.7
(12.4
)
Cash and cash equivalents at beginning of
period
35.5
110.2
42.0
54.4
Cash and cash equivalents at end of
period
$
79.6
$
42.0
$
79.6
$
42.0
Clearwater Paper
Corporation
Reconciliation of Non-GAAP
Financial Measures - Total Statement of Operations
(Unaudited)
Quarter Ended December 31,
2024
(In millions)
As reported
Discontinued
operations
Adjustments
Total Operations
Net sales
$
387.1
$
102.1
$
(6.4
)
a
$
482.8
Costs and expenses:
Cost of sales
372.4
86.9
(6.4
)
a
452.9
Selling, general and administrative
expenses
26.7
3.4
30.1
Other operating charges, net
3.7
3.7
7.3
Gain on sale of discontinued
operations
—
(307.2
)
(307.2
)
Total operating costs and expenses
402.8
(213.2
)
183.1
Total income (loss) from operations
(15.7
)
315.3
299.7
Total non-operating expense
(13.6
)
(3.7
)
(17.3
)
Total income (loss) from operations before
income taxes
(29.3
)
311.6
282.3
Income tax provision (benefit)
(9.7
)
92.8
83.2
Total income (loss) from operations
(19.6
)
$
218.8
Income from discontinued operations, net
of tax
218.8
Net income
$
199.1
$
199.1
Quarter Ended December 31,
2023
(In millions)
As reported
Discontinued
operations
Adjustments
Total Operations
Net sales
$
268.6
$
262.1
$
(17.8
)
a
$
512.9
Costs and expenses:
Cost of sales
232.7
223.7
(18.9
)
a
437.5
Selling, general and administrative
expenses
31.4
5.5
36.9
Other operating charges, net
2.1
0.8
2.9
Total operating costs and expenses
266.2
228.9
477.3
Total income from operations
2.5
33.2
35.6
Total non-operating expense
(4.8
)
(6.4
)
(11.2
)
Total income (loss) from operations before
income taxes
(2.3
)
26.8
24.4
Income tax provision (benefit)
0.2
6.6
6.8
Total income (loss) from operations
(2.5
)
$
20.2
Income from discontinued operations, net
of tax
20.2
Net income
$
17.6
$
17.6
a - Represents intercompany transactions
between the consumer products division and our remaining entity
which under discontinued operations reporting requirements are
shown as sales.
Clearwater Paper
Corporation
Reconciliation of Non-GAAP
Financial Measures - Total Statement of Operations
(Unaudited)
Twelve Months Ended December
31, 2024
(In millions)
As reported
Discontinued
operations
Adjustments
Total Operations
Net sales
$
1,383.6
$
870.3
$
(44.6
)
a
$
2,209.4
Costs and expenses:
Cost of sales
1,307.5
733.0
(44.5
)
a
1,996.0
Selling, general and administrative
expenses
116.7
26.2
142.8
Other operating charges, net
24.0
14.4
38.4
Gain on sale
—
(307.2
)
(307.2
)
Total operating costs and expenses
1,448.1
466.4
1,870.0
Total income (loss) from operations
(64.5
)
404.0
339.4
Total non-operating expense
(36.6
)
(23.4
)
(60.0
)
Total income (loss) from operations before
income taxes
(101.1
)
380.6
279.4
Income tax provision (benefit)
(27.1
)
110.2
83.1
Total income (loss) from operations
(74.0
)
$
270.3
Income from discontinued operations, net
of tax
270.3
Net income
$
196.3
$
196.3
Twelve Months Ended December
31, 2023
(In millions)
As reported
Discontinued
operations
Adjustments
Total Operations
Net sales
$
1,136.0
$
1,023.4
$
(76.6
)
a
$
2,082.8
Costs and expenses:
Cost of sales
935.3
892.6
(76.6
)
a
1,751.3
Selling, general and administrative
expenses
119.4
29.4
148.8
Other operating charges, net
3.2
2.4
5.6
Total operating costs and expenses
1,057.9
924.3
1,905.6
Total income from operations
78.1
99.1
177.2
Total non-operating expense
(12.5
)
(20.5
)
(33.0
)
Total income from operations before income
taxes
65.6
78.6
144.2
Income tax provision
16.9
19.6
36.5
Total income from operations
48.7
$
59.0
Income from discontinued operations, net
of tax
59.0
Net income
$
107.7
$
107.7
Clearwater Paper
Corporation
Reconciliation of Non-GAAP
Financial Measures
Adjusted EBITDA
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(In millions)
2024
2023
2024
2023
Net income (loss)
$
199.1
$
17.6
$
196.3
$
107.7
Add (deduct):
Less: Income from discontinued operations,
net of tax
218.8
20.2
270.3
59.0
Income from continuing operations
(19.6
)
(2.5
)
(74.0
)
48.7
Income tax provision (benefit)
(9.7
)
0.2
(27.1
)
16.9
Interest expense, net
5.3
1.6
29.2
9.5
Depreciation and amortization expense
21.5
10.3
69.8
40.6
Inventory revaluation on acquired
business
—
—
6.8
—
Other operating charges, net1
3.7
2.1
24.0
3.2
Other non-operating expense (income)
(0.7
)
0.2
(1.8
)
(0.1
)
Debt retirement costs
9.1
3.1
9.1
3.1
Adjusted EBITDA from continuing
operations
$
9.5
$
14.9
$
36.0
$
121.9
Income from discontinued operations
218.8
20.2
270.3
59.0
Depreciation and amortization included in
discontinued operations
—
14.3
30.0
57.9
Other operating charges, net included in
discontinued operations
3.7
0.8
14.4
2.4
Inventory adjustment
—
—
4.3
—
Gain on sale of discontinued
operations
(307.2
)
—
(307.2
)
—
Income tax provision included in
discontinued operations
92.8
6.7
110.2
19.6
Non-operating expenses included in
discontinued operations
3.7
6.4
23.4
20.3
Adjusted EBITDA from total operations
$
21.2
$
63.3
$
181.5
$
281.0
1
Other operating charges, net consist of amounts unrelated to
ongoing core operating activities. Please refer to Note 10 within
Clearwater Paper's Form 10-K filed with the SEC for the year ended
December 31, 2024 for the detailed breakout of the annual amount.
Clearwater Paper
Corporation
Reconciliation of Non-GAAP
Financial Measures
(Unaudited)
December 31, 2024
September 30, 2024
December 31, 2023
Calculation of net debt:
Current portion of long-term debt
$
0.6
$
7.4
$
—
Long-term debt
281.6
1,143.3
439.9
Add back:
Unamortized deferred debt costs
1.8
7.4
5.1
Less:
Cash and cash equivalents
79.6
35.5
42.0
Net debt
$
204.4
$
1,122.6
$
403.0
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250213278274/en/
Clearwater Paper Corporation Investors contact: Sloan
Bohlen Solebury Strategic Communications 509-344-5906
investorinfo@clearwaterpaper.com News media: Virginia Aulin,
Vice President, Public Affairs 509-344-5967
Virginia.Aulin@clearwaterpaper.com
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