Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q2 2015 Earnings Presentation
27 slides from Clearwater Paper's earnings presentation, Jul 30, 2015
Slide 1: Second Quarter 2015 Supplemental Information
CLEARWATER PAPER CORPORATION SECOND QUARTER 2015 SUPPLEMENTAL INFORMATION LINDA MASSMAN PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR JOHN HERTZ SENIOR VICE PRESIDENT FINANCE AND CHIEF FINANCIAL OFFICER
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This 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, segment, corporate and consolidated outlook for Q3
Slide 3: Second Quarter Summary
SECOND QUARTER SUMMARY $445 MILLION NET SALES, UP 2.4% VS. Q1‘15 $51 MILLION ADJUSTED EBITDA1, UP 33.5% VS. Q1‘15 120 BASIS POINTS ADJUSTED EBITDA MARGIN1,2 IMPROVEMENT IN CONSUMER PRODUCTS VS. Q1‘15 COMPLETED MAJOR MAINTENANCE AT OUR ARKANSAS PAPERBOARD FACILITY, $7 MILLION COST CONTINUED FOCUS ON
Slide 4: Financial Summary (Unaudited)
FINANCIAL SUMMARY (UNAUDITED) 1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure below. 2 Adjusted gross profit margin is defined as Adjusted gross profit divided by Net sales. 3 Adjusted operating margin is defined as Adjusted operating income divided by Net sale
Slide 5: Q2'15 vs. Q1'15 Consolidated Adjusted EBITDA Bridge
Q2’15 VS. Q1’15 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE 1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure below. $37.9 $3.6 $2.0 $1.4 $0.8 $1.3 $1.7 $7.2 $2.0 $0.6 $0.6 $50.7 $30 $35 $40 $45 $50 $55 $60 ADJ. EBITDA1 (MILLIONS) PRICE/MIX Higher mix of parent roll sal
Slide 6: Q2'15 vs. Q2'14 Consolidated Adjusted EBITDA Bridge
Q2’15 VS. Q2’14 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE 1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure below. SALE OF SPECIALTY MILLS Lower retail sales, higher parent roll shipments, lower conventional tissue pricing Divested 5 specialty mills in Q4’14 PRICE/MIX
Slide 7: Key Segment Results – Consumer Products (Unaudited)
KEY SEGMENT RESULTS – CONSUMER PRODUCTS (UNAUDITED) 1 Includes away-from-home (AFH), contract, machine-glazed (MG) and parent roll tissue products. 2 Includes retail, AFH, and contract tissue case products. 3 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure below.
Slide 8: Clearwater Paper Tissue Shipments and U.S. Retail Tissue Market
CLEARWATER PAPER TISSUE SHIPMENTS AND U.S. RETAIL TISSUE MARKET Retail 74% AFH 8% Parent Rolls 16% Other 2% CLW Q2’15 by Market Segment (% of Tons) Retail 77% AFH 7% Parent Rolls 14% Other 2% CLW Q1’15 by Market Segment (% of Tons) U.S. Retail Tissue Market (MultiOutlet)1 CATEGORY Total Retail Tissu
Slide 9: Q2'15 vs. Q1'15 Consumer Products Adjusted EBITDA Bridge
Q2’15 VS. Q1’15 CONSUMER PRODUCTS ADJUSTED EBITDA1 BRIDGE ICE/MIX SHIPMENT VOLUMES EXTERNAL PULP CHEMICAL COSTS OP. & PKG. SUPPLIES TRANSPORTATION COSTS ENERGY COSTS MAINTENANCE SG&A Q2’15 OUTLOOK VERSUS Q1’15 Stable 0-2% higher Cost / shipped ton: lower Cost / shipped ton: stable Cost / shipped ton
Slide 10: Key Segment Results – Pulp and Paperboard (Unaudited)
KEY SEGMENT RESULTS – PULP AND PAPERBOARD (UNAUDITED) 1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure below. Shipments Paperboard (short tons) Sales Price Paperboard ($/short ton) Segment net sales ($ in thousands) Segment Adjusted EBITDA1 ($ in thousands) Segm
Slide 11: Clearwater Paper Paperboard Shipments and U.S. Paperboard Market
CLEARWATER PAPER PAPERBOARD SHIPMENTS AND U.S. PAPERBOARD MARKET U.S. Paperboard Production3 CATEGORY Total Domestic SBS1 Market Share Folding Food Service2 Liquid Packaging CLEARWATER PAPER 18% 13% 7% OTHER 14% 86% 82% 87% 93%
Slide 12: Q2'15 vs. Q1'15 Pulp and Paperboard Adjusted EBITDA Bridge
Q2’15 VS. Q1’15 PULP AND PAPERBOARD ADJUSTED EBITDA1 BRIDGE PRICE/MIX Q2’15 OUTLOOK VERSUS Q1’15 Q2’15 ACTUAL VERSUS Q1’15 3% lower 0% Stable SHIPMENT VOLUMES WOOD FIBER CHEMICAL COSTS OP. & PKG. SUPPLIES TRANSPORTATION COSTS ENERGY COSTS MAINTENANCE SG&A 0-2% Cost / shipped ton: lower Cost / shippe
Slide 13: Clearwater Paper Cross-Cycle Financial Model
CLEARWATER PAPER CROSS-CYCLE FINANCIAL MODEL 1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure below. (Dollars in thousands)Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15Net sales100%100%100%100%100%100%100%Adjusted gross profit margin113.0%13.4%15.8%13.2%10.7%13.7%17.0% Adjuste
Slide 14: Return on Invested Capital (Unaudited)
RETURN ON INVESTED CAPITAL1,6 (UNAUDITED) 12.4% 12.7% 16.7% 4.7% 4.3% 11.1% 12.7% 12.2% 8.3% 7.7% 6.5% 4.5% 3.7% 0% 5% 10% 15% 20% 2011 2012 2013 2014 LTM Ending 6/30/15 ROIC Adjusted ROIC WACC 2 3,4,5 1 5 4 3 1 Return on Invested Capital (ROIC) is defined as [Net Earnings + Interest Expense] / [Tan
Slide 15: Third Quarter 2015 Outlook (Compared to Q2'15)
THIRD QUARTER 2015 OUTLOOK (COMPARED TO Q2’15)1 CONSUMER PRODUCTS SHIPMENT VOLUMES PRICE/MIX PULP/WOOD FIBER COSTS CHEMICAL COSTS OP. & PKG. SUPPLIES TRANSPORTATION COSTS ENERGY COSTS MAINTENANCE & REPAIRS SG&A PULP AND PAPERBOARD CORPORATE Stable Stable Cost/shipped ton: stable Cost/shipped ton: lo
Slide 16: Bridge to Q3'15 Adjusted EBITDA Outlook
BRIDGE TO Q3’15 ADJUSTED EBITDA OUTLOOK1,2 15 1 This information is based upon management’s current expectations and estimates, which are in part based on market and industry data. Many factors are outside the control of management, including particularly input costs for commodity products, and actu
Slide 17: EBITDA Sensitivities
EBITDA SENSITIVITIES COGS INPUTUNIT OF MEASUREPurchased PulpTon250,000$25$6.3Chips/SawdustTon2,300,000$3$6.9DieselGallon of Diesel10,000,000$0.50$5.0Linehaul RateMile65,000,000$0.10$6.5ChemicalsPaper Ton Produced1,200,000$5$6.0ElectricityMWh1,200,000$5$6.0Natural GasMBTU10,200,000$0.50$5.1*Excluding
Slide 18: Adjusted Gross Profit & Adjusted SG&A Reconciliation
ADJUSTED GROSS PROFIT & ADJUSTED SG&A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) 1 Gross profit is defined as net sales minus cost of sales. 2 Adjusted gross profit and Adjusted selling, general and administrative expenses exclude the impact of the items listed that we do not believe
Slide 19: Segment Adjusted Operating Income (Loss) Reconciliation
SEGMENT ADJUSTED OPERATING INCOME (LOSS) RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) 1 Adjusted operating income (loss) excludes the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands)Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15C
Slide 20: Adjusted Net Earnings & Adjusted Net Earnings per Diluted Share
ADJUSTED NET EARNINGS & ADJUSTED NET EARNINGS PER DILUTED COMMON SHARE RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) 1 All non-tax items are tax effected at the expected annual rate for that period. 2 Adjusted net earnings and Adjusted net earnings per diluted common share exclude the im
Slide 21: Adjusted Income Tax Provision Reconciliation
ADJUSTED INCOME TAX PROVISION RECONCILIATION OF NON-GAAP FINANCIAL MEASURE (UNAUDITED) 1 Adjusted income tax provision excludes the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands)Q1'14Q2'14Q3'14Q4'14Q1'15Q2'15GAAP income tax
Slide 22: EBITDA & Adjusted EBITDA Reconciliation
EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) 1 EBITDA is a non-GAAP measure that management uses as a supplemental performance measure. The most directly comparable GAAP measure is net earnings (loss). EBITDA is net earnings (loss) adjusted for net interest expe
Slide 23: Segment EBITDA & Adjusted EBITDA Reconciliation
SEGMENT EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) 1 Segment EBITDA is a non-GAAP measure that management uses as a supplemental performance measure. The most directly comparable GAAP measure is segment operating income (loss). Segment EBITDA is segment operat
Slide 24: ROIC, Tangible Stockholders' Equity & Excess Cash Reconciliation
RETURN ON INVESTED CAPITAL, TANGIBLE STOCKHOLDERS’ EQUITY & EXCESS CASH RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) 1 Non-GAAP measure. 2 Tangible stockholders' equity is defined as stockholders’ equity less Goodwill and Intangible assets, net. 3 Excess cash is defined as the sum of Ca
Slide 25: Pro Forma Impact of Sale of Specialty Mills (Unaudited)
PRO FORMA IMPACT OF SALE OF SPECIALTY MILLS (UNAUDITED) CONSUMER PRODUCTS INCLUDING SPECIALTY MILLSSPECIALTY MILLSPRO FORMACONSUMER PRODUCTS EXCLUDING SPECIALTY MILLS(Dollars in millions)TWELVE MONTHS ENDEDDECEMBER 31, 2014TWELVE MONTHS ENDEDNOVEMBER 30, 2014 PRO FORMANet sales$1,183.4$217.7$965.7Ad
Slide 26: Q3'15 Outlook Reconciliation of Non-GAAP Financial Measures
Q3’15 OUTLOOK1 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) 1 This information is based upon management’s current expectations and estimates, which are in part based on market and industry data. Many factors are outside the control of management, including particularly input costs for c
Slide 27: For More Information: www.clearwaterpaper.com
FOR MORE INFORMATION: WWW.CLEARWATERPAPER.COM 26