Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q4 2021 Earnings Presentation
23 slides from Clearwater Paper's earnings presentation, Feb 15, 2022
Slide 1: Fourth Quarter Earnings Release Materials
CLEARWATER PAPER CORPORATION FOURTH QUARTER EARNINGS RELEASE MATERIALS FEBRUARY 15, 2022 ARSEN S. KITCH President, Chief Executive Officer And Director MICHAEL J. MURPHY Senior Vice President And Chief Financial Officer
Slide 2: Cautionary Statement Regarding Forward Looking Statements
Cautionary Statement Regarding Forward Looking Statements This presentation of supplemental information contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the i
Slide 3: Q4 and Full Year 2021 Business Highlights
Overall • Net income $9 million for Q4, net loss of $28 million for 2021 • Adjusted net income $14 million for Q4, $17 million for 2021 • Adjusted EBITDA $56 million for Q4, $175 million for 2021 • Net proceeds on asset sales of $13 million Pulp and Paperboard • Continued strong customer demand • SB
Slide 4: Business Update – Pulp and Paperboard
Industry • Order backlogs remain strong • Fastmarkets RISI reported market price increases of $250/ton in 2021 • Folding carton: Q1’21 $20/ton, Q2’21 $100/ton, Q3’21 $80/ton and Q4’21 $50/ton • Cup stock and food service: Q2’21 $100/ton, Q3’21 $100/ton and Q4’21 $50/ton • Fastmarkets RISI reported a
Slide 5: Pulp and Paperboard – Sustainable Products
• Sustainable forest certifications for fiber supply in place for over a decade • Recent launch of products with recycled fiber content • ReMagine with up to 30% recycled content for folding carton applications • NuVo with up to 35% recycled content for cup applications • Focus on developing more su
Slide 6: Business Update – Consumer Products
Industry • COVID has led to demand and inventory distortions in 2020 and 2021 • Per RISI in 2020, US demand ~10.6 million tons • ~1 to 2% annual growth, slightly greater than population growth • ~70% at home (pre-COVID ~2/3 at home) • At home: ~ 7.6 million ton demand with ~2/3 branded and ~1/3 priv
Slide 7: Financial Performance
© Clearwater Paper Corporation 2022 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 1. Includes impairment and other costs associated with the Neenah, Wisconsin facility closure and other items. Refer to Clearwater Paper 10-K filed with the SEC on February 15, 2022 for further detail
Slide 8: Segment Profit and Loss and Adjusted EBITDA
© Clearwater Paper Corporation 2022 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 1. Includes impairment and other costs associated with Neenah, Wisconsin and other items. Refer to Clearwater Paper 10-K filed with the SEC on February 15, 2022, for further details. 2021 2020 2021 2020 N
Slide 9: Pulp and Paperboard Results Q4 2021 vs. Q4 2020
PULP AND PAPERBOARD RESULTS Q4 2021 VS. Q4 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher pricing with favorable mix Higher input costs including energy, chemicals and transportation © Clearwater Paper Corporation 2022 9
Slide 10: Pulp and Paperboard Results 2021 vs. 2020
PULP AND PAPERBOARD RESULTS 2021 VS. 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher pricing with favorable mix Higher input costs and planned major maintenance1 © Clearwater Paper Corporation 2022 10 1 Estimated impact of planned major maintenance outage was $27 million
Slide 11: Consumer Products Results Q4 2021 vs. Q4 2020
CONSUMER PRODUCTS RESULTS Q4 2021 VS. Q4 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Lower sales and production volumes Higher input costs partially offset by benefits from Neenah consolidation © Clearwater Paper Corporation 2022 11 Favorable mix with targeted price increases
Slide 12: Consumer Products Results 2021 vs. 2020
CONSUMER PRODUCTS RESULTS 2021 VS. 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Lower sales and production volumes Higher input costs partially offset by benefits from Neenah closure © Clearwater Paper Corporation 2022 12 Favorable mix
Slide 13: Capital Structure and Allocation
© Clearwater Paper Corporation 2022 CAPITAL STRUCTURE AND ALLOCATION Capital structure: supportive and stable • Ample liquidity • No material near-term debt maturities • Corporate/Issuer ratings: Ba2/BB- Capital allocation objectives: • Utilize free cash flow to reduce debt • Target net debt to Adju
Slide 14: Outlook for Q1 and 2022
OUTLOOK FOR Q1 AND 2022 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2022 Q1 2022: $48 to $56 million of Adjusted EBITDA • Positive impact of previously announced price increases in paperboard and tissue • Raw material inflation impacting Adjusted EBITDA by $5 to $7 million relative to Q4 2021
Slide 15: Summary: Segment Positioning and Near-Term Strategy
Pulp and Paperboard • Diversified range of end-market products, well-invested national footprint • Focused on non-integrated customers with strong service and quality commitment • Well positioned for trends towards sustainable packaging and food service products Consumer Products • Leading private-b
Slide 16: Appendix
APPENDIX © Clearwater Paper Corporation 2022 16
Slide 17: Pulp and Paperboard Sequential Quarter Results
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q4 2021 VS. Q3 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Lower major maintenance outages offset by higher input costs Favorable mix and higher pricing © Clearwater Paper Corporation 2022 18
Slide 18: Consumer Products Sequential Quarter Results
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q4 2021 VS. Q3 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Improved production and demand Higher input costs in pulp, transportation and energy © Clearwater Paper Corporation 2022 19 Favorable mix with targeted price increases
Slide 19: Key Segment Information
KEY SEGMENT INFORMATION 1. Includes both retail and away-from-home (AFH) cases. AFH was exited in Q3, 2021. AFH cases totaled 2.0 million in 2019, 1.5 million in 2020 and 0.8 million in 2021. 2. Non-retail includes away-from-home and parent rolls. Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2
Slide 20: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) Sept 30, 2021 2020 2021 2021 2020 Net income (loss) $ 9.6 $ 22.6 $ 1.9 $ (28.1) $ 77.1 Income tax provision (benefit) 6.1 7.0 (0.3) (7.7) 21.1 Interest expense, net 8.9 9.5 8.9 36.4 46.5 Depreciation and amortization expense 25.4 27.5 25.9 105.0 111.
Slide 21: Reconciliation of Adjusted Income
© Clearwater Paper Corporation 2022 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2021 2020 2021 2020 Net income (loss) 9.6$ 22.6$ (28.1)$ 77.1$ Add back: Income tax provision (benefit) 6.1 7.0 (7.7) 21.1 Income (loss) before income taxes 15.6 29.5 (35.7) 98.2 Add back:
Slide 22: Additional Reconciliations
ADDITIONAL RECONCILIATIONS Net Debt Mar 31, 2020 June 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 June 30, 2021 Sept 30, 2021 Dec 31, 2021 Cash $ 60.8 $ 48.2 $ 47.5 $ 35.9 $ 57.1 $ 60.9 $ 27.8 $ 25.2 Current debt 58.1 1.6 1.7 1.7 1.7 1.7 1.6 1.6 Long term debt 883.9 827.9 785.5 716.4 716.3 716.
Slide 23: Major Maintenance Schedule
MAJOR MAINTENANCE SCHEDULE ($ IN MILLIONS) 1. This information is based upon management’s current expectations and estimates, as well as historical averages. Many factors are outside the control of management, and actual results may differ materially from the information set forth above. See “Forwar