Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q1 2018 Earnings Presentation
26 slides from Clearwater Paper's earnings presentation, Apr 19, 2018
Slide 1: Clearwater Paper Corporation First Quarter 2018 Supplemental Information
CLEARWATER PAPER CORPORATION FIRST QUARTER 2018 SUPPLEMENTAL INFORMATION 04/19/18 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 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 outlook for Q2 and full year 2018; t
Slide 3: First Quarter Financial Highlights
FIRST QUARTER FINANCIAL HIGHLIGHTS $437 MILLION NET SALES, FLAT VS. Q4'17 $12 MILLION GAAP OPERATING INCOME $40 MILLION ADJUSTED EBITDA1, BELOW OUTLOOK RANGE OF $42 TO $52 MILLION DILUTED GAAP EPS OF $0.16 AND ADJUSTED DILUTED EPS OF $0.311 AN INCREMENTAL $5 MILLION CONTRIBUTION TO COST SAVINGS FROM
Slide 4: Financial Summary (GAAP Basis)
FINANCIAL SUMMARY (GAAP BASIS) (UNAUDITED) (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Net sales $437,525 $429,663 $426,504 $436,716 $436,952 Gross Profit $50,465 $48,602 $39,742 $61,258 $44,519 Selling, general and administrative expenses ($29,955) ($29,454) ($34
Slide 5: Financial Summary (Adjusted Basis)
FINANCIAL SUMMARY (ADJUSTED BASIS) (UNAUDITED) Q2'18 (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Outlook7 1% - 2% Net sales $437,525 $429,663 $426,504 $436,716 $436,952 Lower Adjusted gross profit1 $55,668 $49,820 $41,048 $61,675 $44,712 Adjusted gross profit marg
Slide 6: Q1'18 vs. Q4'17 Consolidated Adjusted EBITDA Bridge
Q1’18 VS. Q4’17 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE ADJ, EBITDA1 (MILLIONS) $60 $57.5 Lower CPD retail pricing and higher promotional PRICE/MIX spending. PPD stable price/mix. $55 Higher retail tissue shipments, partly offset by $0.9 VOLUME lower paperboard shipments $50 -$6.9 Higher external pulp
Slide 7: Q1'18 vs. Q1'17 Consolidated Adjusted EBITDA Bridge
Q1’18 VS. Q1’17 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE ADJ, EBITDA1 (MILLIONS) $60 Higher paperboard pricing due to previously PRICE/MIX announced increase and favorable product mix in $5.9 CPD $55 Lower non-retail tissue shipments and lower VOLUME paperboard shipments, partly offset by higher $49.3 -
Slide 8: Strategic Investment and Operational Improvement Scorecard as of Q1'18
STRATEGIC INVESTMENT AND OPERATIONAL IMPROVEMENT SCORECARD AS OF Q1'18 FULL RUN-RATE EXPECTED IMPACT (MILLIONS $)1 COST SAVINGS1 $30-$35 $20-$21 $21-$24 $44-$65 • Strategic plan announced in Q1’15, expected capex of $229-$241 million • Expected to yield a $115-$145 million cost savings by the end of
Slide 9: Key Segment Results - Consumer Products
KEY SEGMENT RESULTS - CONSUMER PRODUCTS (UNAUDITED) CONSUMER PRODUCTS CROSS-CYCLE Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 FINANCIAL MODEL Shipments Non-Retail (short tons)1 16,678 13,736 12,958 12,190 11,236 Retail (short tons) 78,686 77,714 77,544 75,123 80,971 Total Tissue Tons 95,364 91,450 90,502 87,313 9
Slide 10: Clearwater Paper Tissue Shipments and U.S. Retail Tissue Market
CLEARWATER PAPER TISSUE SHIPMENTS AND U.S. RETAIL TISSUE MARKET CLW Q1'18 by CLW Q4'17 by Market Segment Market Segment (% of Tons) (% of Tons) U.S. Retail1 Tissue Market Q1'18 ($) Parent Parent Other (MultiOutlet) Rolls Rolls 1% AFH 6% 6% AFH 7% PRIVATE 6% CATEGORY LABEL BRANDS TOTAL Total Retail 2
Slide 11: Q1'18 vs. Q4'17 Consumer Products Adjusted EBITDA Bridge
Q1'18 VS. Q4'17 CONSUMER PRODUCTS ADJUSTED EBITDA1 BRIDGE SEGMENT ADJ. EBITDA1 (MILLIONS) $30 Lower retail tissue pricing and higher promotional PRICE/MIX spending partially offset by stronger mix of ultra quality tissue shipments $27 $25.9 VOLUME Higher retail tissue shipments $24 PULP Higher exter
Slide 12: Key Segment Results – Pulp and Paperboard
KEY SEGMENT RESULTS – PULP AND PAPERBOARD (UNAUDITED) PULP AND PAPERBOARD CROSS-CYCLE Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 FINANCIAL MODEL Shipments Paperboard (short tons) 210,382 207,152 200,569 210,098 206,309 Sales Price Paperboard ($/short ton) $927 $955 $965 $962 $960 Segment net sales ($ in thousand
Slide 13: Clearwater Paper Paperboard Shipments and U.S. Paperboard Market
CLEARWATER PAPER PAPERBOARD SHIPMENTS AND U.S. PAPERBOARD MARKET CLW Q1'18 by CLW Q4'17 by Market Segment Market Segment U.S. Paperboard Production Q1'183 (% of Tons) (% of Tons) CLEARWATER CATEGORY PAPER OTHER Folding Folding Total Domestic 14% 86% 53% 53% SBS1 Market Share Folding 18% 82% Food Ser
Slide 14: Q1'18 vs. Q4'17 Pulp and Paperboard Adjusted EBITDA Bridge
Q1’18 vs. Q4'17 PULP AND PAPERBOARD ADJUSTED EBITDA1 BRIDGE SEGMENT ADJ. EBITDA1 (MILLIONS) $50 PRICE/MIX Relatively stable mix $45 $44.2 $— VOLUME Shipments returned to seasonal levels Higher wood prices due to strong demand from PULP/WOOD FIBER pulp and corrugate producers $40 -$2.8 -$3.5 $1.0 $35
Slide 15: Clearwater Paper Cross-Cycle Financial Model
CLEARWATER PAPER CROSS-CYCLE FINANCIAL MODEL CLEARWATER PAPER CROSS-CYCLE (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 FINANCIAL MODEL Net sales 100% 100% 100% 100% 100% 100% Adjusted gross profit margin1 13.0% 11.7% 9.7% 14.2% 10.2% 17.0% Adjusted SG&A expenses1 as % of net sales (7.2%) (7.
Slide 16: Q2'18 Outlook Reconciliation of Non-GAAP Financial Measures
Q2’18 OUTLOOK1 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) OUTLOOK THREE MONTHS ENDING JUNE 30, 2018 RANGE OF ESTIMATE (Dollars in thousands) FROM TO Earnings before interest, income taxes, and depreciation & amortization (EBITDA)2: GAAP net earnings $1,000 $6,500 Interest expense, net
Slide 17: Q2'18 Outlook Reconciliation of Non-GAAP Financial Measures
Q2’18 OUTLOOK1 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) OUTLOOK THREE MONTHS ENDING JUNE 30, 2018 RANGE OF ESTIMATE (Dollars in thousands) FROM TO GAAP Operating Income $9,900 $18,200 Directors' equity-based compensation expense 400 400 Reorganization related expenses 1,200 1,200 Ad
Slide 18: Q2'18 Outlook
Q2'18 OUTLOOK1 NET SALES 1% - 2% Lower ADJUSTED OPERATING MARGIN2,3 2.5% - 4% ADJUSTED EBITDA2 $35M - $45M ADJUSTED NET EARNINGS PER DILUTED COMMON SHARE2,4 $0.13 - $0.46 1 This information is based upon management’s current expectations and estimates, which are in part based on market and industry
Slide 19: Appendix
AG sisegoorss APPENDIX
Slide 20: Adjusted Gross Profit & Adjusted SG&A Reconciliation
ADJUSTED GROSS PROFIT & ADJUSTED SG&A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Gross profit1,2 $50,465 $48,602 $39,742 $61,258 $44,519 Costs associated with Long Island facility closure 466 661 610 298 — Costs associated with Okla
Slide 21: Segment Adjusted Operating Income (Loss) Reconciliation
SEGMENT ADJUSTED OPERATING INCOME (LOSS) RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Consumer Products Operating income1 $6,204 $10,698 $4,525 $7,546 $1,629 Costs associated with Long Island facility closure 466 661 610 298 — Costs a
Slide 22: Adjusted Net Earnings & Adjusted EPS Reconciliation
ADJUSTED NET EARNINGS & ADJUSTED NET EARNINGS PER DILUTED COMMON SHARE RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 GAAP net earnings $7,515 $8,037 $863 $80,924 $2,600 Adjustments, after tax1: Directors' equ
Slide 23: Adjusted Income Tax Provision Reconciliation
ADJUSTED INCOME TAX PROVISION RECONCILIATION OF NON-GAAP FINANCIAL MEASURE (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 GAAP income tax (provision) benefit ($5,000) ($3,955) $3,095 $62,245 $360 Adjustments, tax impact: Directors' equity-based compensation benefit (expense) 493 49
Slide 24: EBITDA & Adjusted EBITDA Reconciliation
EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Earnings before interest, income taxes, and depreciation & amortization (EBITDA)1 GAAP net earnings $7,515 $8,037 $863 $80,924 $2,600 Interest expense, net 8,043 7,
Slide 25: Segment EBITDA & Adjusted EBITDA Reconciliation
SEGMENT EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Consumer Products Operating income1 $6,204 $10,698 $4,525 $7,546 $1,629 Depreciation and amortization expense 18,242 16,292 16,073 14,400 14,297 Segment EBI
Slide 26: For More Information: www.clearwaterpaper.com
FOR MORE INFORMATION: WWW.CLEARWATERPAPER.COM 26