Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q2 2022 Earnings Presentation
20 slides from Clearwater Paper's earnings presentation, Aug 2, 2022
Slide 1: Second Quarter Earnings Release Materials
CLEARWATER PAPER CORPORATION SECOND QUARTER EARNINGS RELEASE MATERIALS AUGUST 2, 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 order
Slide 3: Q2 2022 Business Highlights
Overall • Net sales $526 million, up 30% compared to prior year • Net income $15 million • Adjusted net income $19 million • Adjusted EBITDA $63 million • Inflation pressures across both businesses Pulp and Paperboard • Continued strong customer demand • SBS prices increased Consumer Products • Dema
Slide 4: Business Update – Pulp and Paperboard Pricing Driving Overall Strong Results
Industry • Order backlogs remain strong • RISI reported market price increases $250/ton in 2021, $100/ton in Q1 2022, and $100/ton in Q2 2022 • Folding carton: April $50/ton and June $50/ton • Cupstock and food service: April $50/ton and June $50/ton • Strong demand across various end markets Clearw
Slide 5: Business Update – Consumer Products Shipments Strengthen
Industry • Consumer buying behavior being affected by inflation • Private brand market share rising, now above 35%1 Clearwater Paper • Strong demand with Q2 2022 shipments of 12.6 million cases compared to 10.2 million in Q2 20212, 12.0 million in Q1 2022 • Production without meaningful market relat
Slide 6: Financial Performance
© Clearwater Paper Corporation 2022 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 2022 2021 Net sales 526.4$ 406.4$ 1,014.6$ 832.3$ Cost of sales 455.2 392.2 877.2 762.8 Selling, general and adminstrative 33.9 26.3 66.7 54.1 Other operating charges, net 5.7 44.5 6.3 44.9
Slide 7: Segment Profit and Loss and Adjusted EBITDA
© Clearwater Paper Corporation 2022 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 2022 2021 2022 2021 Net Sales Pulp and Paperboard 295.8$ 227.4$ 562.0$ 447.2$ Consumer Products 232.1 180.7 455.2 389.0 Eliminations (1.5) (1.7) (2.6) (3.9) 526.4$ 406.4$ 1,014.6$ 832.3$ Operating Income
Slide 8: Pulp and Paperboard Results Q2 2022 vs. Q2 2021
PULP AND PAPERBOARD RESULTS Q2 2022 VS. Q2 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher pricing Higher input costs including fiber, energy, chemicals and transportation, partly offset by lack of major maintenance outage © Clearwater Paper Corporation 2022 8 Higher volume due to lack major mai
Slide 9: Consumer Products Results Q2 2022 vs. Q2 2021
CONSUMER PRODUCTS RESULTS Q2 2022 VS. Q2 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher sales and production volume Higher input costs including pulp, energy, and transportation partly offset by Neenah closure © Clearwater Paper Corporation 2022 9 Price increases and mix
Slide 10: 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: • Fund typical maintenance and business improvement capital inves
Slide 11: Outlook for Q3 and 2022
OUTLOOK FOR Q3 AND 2022 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2022 Q3 2022: $64 to $72 million of Adjusted EBITDA • Positive impact of previously announced price increases in paperboard and tissue • Tissue volumes higher, paperboard sales volume lower • No major maintenance outage • Raw
Slide 12: Clearwater Paper Value Proposition: Key Priorities for Value Creation
CLEARWATER PAPER VALUE PROPOSITION KEY PRIORITIES FOR VALUE CREATION © Clearwater Paper Corporation 2022 12 Generate free cash flow • Achieve commercial, operational and supply chain improvements across our businesses • Invest to sustain our assets and higher return projects • Demonstrate an attract
Slide 13: Appendix
APPENDIX © Clearwater Paper Corporation 2022 13
Slide 14: Pulp and Paperboard Sequential Quarter Results Q2 2022 vs. Q1 2022
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q2 2022 VS. Q1 2022 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher input costs including fiber, chemicals and transportation Higher pricing © Clearwater Paper Corporation 2022 14 Higher volume due to increased demand
Slide 15: Consumer Products Sequential Quarter Results Q2 2022 vs. Q1 2022
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q2 2022 VS. Q1 2022 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher input costs including transportation, chemicals and energy partially offset by lack of outage © Clearwater Paper Corporation 2022 15 Price increase and mix
Slide 16: Key Segment Information
KEY SEGMENT INFORMATION 1. Includes both retail and away-from-home (AFH) cases. AFH was exited in Q3, 2021. 1.5 million in 2020 and 0.8 million in 2021. 2. Non-retail includes away-from-home and parent rolls. Q3’2020 Q4’2020 Q1’2021 Q2’2021 Q3’2021 Q4’2021 Q1’2022 Q2’2022 Pulp and Paperboard Sales (
Slide 17: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) March 31, 2022 2021 2022 2022 2021 Net income $ 14.7 $ (51.6) $ 16.6 $ 31.3 $ (39.6) Income tax provision 4.4 (16.7) 6.0 10.4 (13.5) Interest expense, net 10.7 9.3 8.6 19.3 18.6 Depreciation and amortization expense 25.7 26.8 25.4 51.2 53.7 Other ope
Slide 18: Reconciliation of Adjusted Income
© Clearwater Paper Corporation 2022 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 2022 2021 Net income (loss) 14.7$ (51.6)$ 31.3$ (39.6)$ Add back: Income tax provision (benefit) 4.4 (16.7) 10.4 (13.5) Income (loss) before income taxes 19.1 (68.4) 41.7 (53.1)
Slide 19: Additional Reconciliations
ADDITIONAL RECONCILIATIONS Net Debt Dec 31, 2020 Mar 31, 2021 June 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 June 30, 2022 Cash $ 35.9 $ 57.1 $ 60.9 $ 27.8 $ 25.2 $ 36.4 $69.5 Current debt 1.7 1.7 1.7 1.6 1.6 1.6 1.0 Long term debt 716.4 716.3 716.2 676.5 637.6 617.7 589.9 add: Deferred debt
Slide 20: Major Maintenance Schedule Adjusted EBITDA Impact
MAJOR MAINTENANCE SCHEDULE ADJUSTED EBITDA IMPACT ($ IN MILLIONS) 1. This information is based upon management’s assumptions and estimates. 2. Estimates assume major maintenance outages at both Cypress Bend, AR and Lewiston, ID mills. The Lewiston recovery boiler screen tube replacement project is l