Slide 1: Strategic Updates and Fourth Quarter Earnings Release Materials
CLEARWATER PAPER CORPORATION STRATEGIC UPDATES AND FOURTH QUARTER EARNINGS RELEASE MATERIALS FEBRUARY 20, 2024 ARSEN KITCH President, Chief Executive Officer and Director SHERRI BAKER Senior Vice President and Chief Financial Officer
Slide 2: Forward Looking Statements
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 as amended
Slide 3: Strategic Updates
STRATEGIC UPDATES © Clearwater Paper Corporation 2024 3
Slide 4: Augusta Manufacturing Facility Acquisition – Strategic Rationale
AUGUSTA MANUFACTURING FACILITY ACQUISITION – STRATEGIC RATIONALE Our strategy is to strengthen our position as a premier, independent supplier of paperboard products to North American converters • ~10 million ton North America paperboard market, growing and well positioned to capitalize on sustainab
Slide 5: Augusta Manufacturing Facility – Key Takeaways
AUGUSTA MANUFACTURING FACILITY – KEY TAKEAWAYS ~600,000 Improved scale in paperboard tons of • $700 million intended acquisition of a high quality, well invested SBS facility • ~600 thousand tons of capacity, projected to be ~70 to 80% utilized in 2024 capacity • Increases Clearwater Paper’s paperbo
Slide 6: Fourth Quarter Earnings Release Materials
FOURTH QUARTER EARNINGS RELEASE MATERIALS © Clearwater Paper Corporation 2024 6
Slide 7: Q4 2023 and Full Year 2023 Business Highlights
Q4 2023 AND FULL YEAR 2023 BUSINESS HIGHLIGHTS Overall • Net sales $513 million for Q4, $2.1 billion for 2023 • Net income $18 million for Q4, $108 million for 2023 • Adjusted net income $23 million for Q4, $114 million for 2023 • Adjusted EBITDA $63 million for Q4 • Adjusted EBITDA $281 million for
Slide 8: Business Update – Pulp and Paperboard
BUSINESS UPDATE – PULP AND PAPERBOARD SOFT DEMAND LEADING TO REDUCED OPERATING RATES, LOWER INDUSTRY PRICING Industry (SBS) • Shipments, production, and operating rates decreased 2023 versus 2022 based on AF&PA data • Shipments (in tons) decreased 15.5%, with a 15.1% decline in in the fourth quarter
Slide 9: Business Update – Consumer Products
BUSINESS UPDATE – CONSUMER PRODUCTS SHIPMENTS STRENGTHENED, PRICES INCREASED Industry • Consumers shifting to private brands with economic uncertainty and inflation • Private brand market share remained at 36%1 Clearwater Paper • Strong demand with Q4 2023 shipments of 13.5 million cases compared to
Slide 10: Financial Performance
FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net sales $ 512.8 $ 526.7 $ 2,082.8 $ 2,080.1 Cost of sales 437.4 491.4 1,752.0 1,823.4 Selling, general and adminstrative 36.8 33.5 148.3 133.0 Other operating char
Slide 11: Segment Profit and Loss and Adjusted EBITDA
SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net Sales Pulp and Paperboard $ 251.3 $ 273.5 $ 1,063.7 $ 1,136.3 Consumer Products 262.0 254.1 1,023.4 950.2 Eliminations (0.5) (0.9) (4.3) (6.4) $ 512.8 $ 526.7 $ 2,08
Slide 12: Pulp and Paperboard Q4 2023 Results
PULP AND PAPERBOARD Q4 2023 RESULTS Q4 2022 VS. Q4 2023 ADJUSTED EBITDA ($ IN MILLIONS) Absence of planned major maintenance, and lower energy costs Lower industry pricing as reported by RISI © Clearwater Paper Corporation 2024 12
Slide 13: Pulp and Paperboard 2023 Results
PULP AND PAPERBOARD 2023 RESULTS 2022 VS. 2023 ADJUSTED EBITDA ($ IN MILLIONS) Higher pricing on paperboard offset by Cost unfavorable Reduced deflation mix, lower pulp operating related to pricing schedules and freight and lower energy shipments © Clearwater Paper Corporation 2024 13
Slide 14: Consumer Products Q4 2023 Results
CONSUMER PRODUCTS Q4 2023 RESULTS Q4 2022 VS. Q4 2023 ADJUSTED EBITDA ($ IN MILLIONS) Lower pulp, energy and Benefits from freight, offset previously by higher announced chemical price increases costs © Clearwater Paper Corporation 2024 14
Slide 15: Consumer Products 2023 Results
CONSUMER PRODUCTS 2023 RESULTS 2022 VS. 2023 ADJUSTED EBITDA ($ IN MILLIONS) Lower freight Higher costs shipments and increased absorption Benefits from previously announced price increases © Clearwater Paper Corporation 2024 15
Slide 16: Capital Structure and Allocation
CAPITAL STRUCTURE AND ALLOCATION Capital structure summary Liquidity Profile ($ in millions)1 • Ample liquidity ABL Availability $259.0 • No material near-term debt maturities Less Utilization (23.7) • Corporate/Issuer ratings: Ba2/BB- Plus Unrestricted Cash 42.0 Liquidity $277.3 Capital allocation
Slide 17: Outlook for Q1'24 and 2024 Overall Assumptions
OUTLOOK FOR Q1’24 AND 2024 OVERALL ASSUMPTIONS Q1 2024: $53 to $63 million1 of adjusted EBITDA • Weather related impact at Lewiston site • Increasing paperboard demand and production volumes • Continued strong performance in tissue FY 2024 operational assumptions vs. FY 2023 • Maintaining strong tis
Slide 18: Appendix
APPENDIX © Clearwater Paper Corporation 2024 18
Slide 19: Pulp and Paperboard Sequential Quarter Results
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q3 2023 VS. Q4 2023 ADJUSTED EBITDA ($ IN MILLIONS) Lower industry pricing as Higher fiber, reported by chemicals RISI partially offset by lower energy © Clearwater Paper Corporation 2024 19
Slide 20: Consumer Products Sequential Quarter Results
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q3 2023 VS. Q4 2023 ADJUSTED EBITDA ($ IN MILLIONS) Lower Lower cost pricing due due to lower to index pulp, freight pricing and energy costs © Clearwater Paper Corporation 2024 20
Slide 21: Key Segment Information
KEY SEGMENT INFORMATION Q4’2021 Q1’2022 Q2’2022 Q3’2022 Q4’2022 Q1’2023 Q2’2023 Q3’2023 Q4’2023 Pulp and Paperboard Sales ($ millions) $261.3 $266.2 $295.8 $300.8 $273.5 $278.8 $272.3 $261.4 $251.3 Adjusted EBITDA ($ millions) $61.9 $59.5 $61.2 $73.0 $26.7 $66.2 $51.3 $53.1 $36.8 Paperboard shipment
Slide 22: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) Quarter Ended Year Ended December 31, Sept 30, December 31, 2023 2022 2023 2023 2022 Net income (loss) $ 17.6 $ (5.9) $ 36.6 $ 107.7 $ 46.0 Income tax provision 6.8 (2.3) 11.0 36.4 27.0 Interest expense, net 8.0 7.3 6.9 30.0 34.6 Depreciation and amo
Slide 23: Reconciliation of Adjusted Income
RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net income $ 17.6 $ (5.9) $ 107.7 $ 46.0 Add back: Income tax provision 6.8 (2.3) 36.4 27.0 Income before income taxes 24.4 (8.2) 144.2 73.1 Add back: De
Slide 24: Additional Reconciliations
ADDITIONAL RECONCILIATIONS ($ IN MILLIONS) Net Debt Dec 31 ‘21 Mar 31 ‘22 Jun 30 ‘22 Sep 30 ‘22 Dec 31 ‘22 Mar 31 ’23 Jun 30 ‘23 Sep 30 ‘23 Dec 31 ‘23 Cash $ 25.2 $ 36.4 $69.5 $50.8 $53.7 $16.7 $41.7 $110.2 $42.0 Current debt 1.6 1.6 1.0 1.0 0.9 0.9 0.9 0.9 0.8 Long term debt 637.6 617.7 589.9 564.9
Slide 25: Major Maintenance Schedule
MAJOR MAINTENANCE SCHEDULE ADJUSTED EBITDA IMPACT ($ IN MILLIONS) $34 $30 - $35 $30 - $35 $30 $27 $24 $5 2025 $20 $7 $28 or 2026 expected $22 $17 $6 $10 $4 $2 2017 2018 2019 2020 2021 2022 2023 2024e 1,2 2025e1,2 Q1 Q2 Q3 Q4 Total 1. This information is based upon management’s current assumptions an