Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q1 2015 Earnings Presentation
27 slides from Clearwater Paper's earnings presentation, Apr 22, 2015
Slide 1: Clearwater Paper Corporation First Quarter 2015 Supplemental Information
CLEARWATER PAPER CORPORATION FIRST 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 Q2
Slide 3: First Quarter Summary
FIRST QUARTER SUMMARY $434 MILLION NET SALES $38 MILLION ADJUSTED EBITDA1 FIRST FULL QUARTER WITHOUT SPECIALTY MILLS RETURNED $37 MILLION TO SHAREHOLDERS AS PART OF NEW $100 MILLION SHARE BUYBACK PROGRAM AT AVERAGE COST OF $62 PER SHARE COMPLETED MAJOR MAINTENANCE AT OUR IDAHO PAPERBOARD FACILITY, $
Slide 4: Financial Summary (Unaudited)
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure. 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 sales. 4 Adjusted EBITDA margin is defin
Slide 5: Adjusted EBITDA Q1'15 vs. Previous Outlook
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure. $54.5 $4.6 $49.9 $0.1 $3.3 $0.7 $0.7 $0.6 $5.0 $1.0 $15.0 $3.8 $1.6 $37.9 $30 $35 $40 $45 $50 $55 $60 $65 $70 ADJ. EBITDA1 (MILLIONS) SALE OF SPECIALTY MILLS Divested 5 specialty mills at end of Q4‘14 VOLUME High
Slide 6: Adjusted EBITDA Q1'15 vs. Q1'14
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure. SALE OF SPECIALTY MILLS Divested 5 specialty mills at end of Q4‘14 PRICE/MIX Higher paperboard pricing and richer tissue mix with shift towards TAD products VOLUME Lower paperboard shipments due to West Coast shi
Slide 7: Consumer Products Cross-Cycle Financial Model
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. 4 Segment Adjusted EBITDA margin is defined as Segment Ad
Slide 8: Consumer Products Market Segments and Outlook
Retail 57% MG 17% AFH 6% Parent Rolls 19% Other 1% CLW Q4’14 by Market Segment (% of Tons) U.S. Retail Tissue Market (MultiOutlet) CATEGORY PRIVATE LABEL BRANDS TOTAL Total Retail Tissue Share 28% 72% 100% % Change Q1’15 vs. Q4’14 0.2% (0.2)% -% Data Source: IRI Worldwide - 13 Weeks Ending 3/29/15.
Slide 9: Key Segment Results – Consumer Products
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure. Segment Actual vs. Previous Outlook $28.8 $4.6 $24.2 $0.1 $0.1 $0.7 $5.0 $1.0 $2.2 $0.7 $26.6 $15 $20 $25 $30 $35 $40 ADJ. EBITDA1 (MILLIONS) KEY SEGMENT RESULTS – PULP AND PAPERBOARD (UNAUDITED)
Slide 10: Pulp and Paperboard Cross-Cycle Financial Model
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure. 2 Segment Adjusted EBITDA margin is defined as Segment Adjusted EBITDA divided by Segment net sales. PULP AND PAPERBOARD CROSS-CYCLE FINANCIAL MODEL Q1'14 Q2'14 Q3'14 Q4'14 Q1’15 Shipments Paperboard (short tons)
Slide 11: Paperboard Shipments and U.S. Paperboard Market
U.S. Paperboard Production CATEGORY CLEARWATER PAPER OTHER Total Domestic SBS1 Market Share 13% 87% Folding 18% 82% Food Service2 14% 86% Liquid Packaging 5% 95% Data Source: American Forest and Paper Association Solid Bleached Domestic Production – Feb YTD 2015. Folding 56% Food Service 32% Liquid
Slide 12: Key Segment Results – Pulp and Paperboard
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure. Segment Actual vs. Previous Outlook $38.5 $0.1 $3.2 $0.7 $0.6 $15.0 $1.6 $0.6 $24.4 $15 $20 $25 $30 $35 $40 $45 $50 ADJ. EBITDA1 (MILLIONS) CLEARWATER PAPER CROSS-CYCLE FINANCIAL MODEL
Slide 13: Clearwater Paper Cross-Cycle Financial Model and ROIC
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure. (Dollars in thousands)Q1'14Q2'14Q3'14Q4'14Q1'15Net sales100%100%100%100%100%100%Adjusted gross profit margin113.0%13.4%15.8%13.2%10.7%17.0% Adjusted SG&A expenses1 as % of net sales(6.3%)(6.3%)(6.1%)(6.7%)(6.8%)(
Slide 14: Return on Invested Capital Definitions
1 Return on Invested Capital (ROIC) is defined as [Net Earnings + Interest Expense] / [Tangible Stockholders’ Equity6 + Debt – Excess (Deficit) Cash6]. 2 Weighted Average Cost of Capital (WACC) is defined as [(Debt x Cost of Debt x {1-Marginal Tax Rate})/(Debt + Stockholders’ Equity)]+ [(Stockholder
Slide 15: Q2 2015 Outlook by Segment
1 CONSUMER PRODUCTS PULP AND PAPERBOARD CORPORATE SHIPMENT VOLUMES • Slightly higher: 0–2% higher • Slightly higher: 0–2% higher PRICE/MIX • Stable • Stable PULP/WOOD FIBER COSTS • Cost/shipped ton: lower • Cost/shipped ton: lower CHEMICAL COSTS • Cost/shipped ton: stable • Cost/shipped ton: stable
Slide 16: EBITDA Sensitivities
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 actual results may differ materially from the info
Slide 17: EBITDA Sensitivity to Cost Inputs
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 specialty mills2014
Slide 18: Adjusted Gross Profit and Adjusted SG&A Reconciliation
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 are indicative of our core operating performance. (Dollars in thousands)Q1'14Q2'14Q3'14Q4'14Q1'1
Slide 19: Adjusted Segment Operating Income Reconciliation
(Dollars in thousands)Q1'14Q2'14Q3'14Q4'14Q1'15Consumer ProductsOperating (loss) income($523)$ 12,705$ 12,535($30,745)$12,395Costs associated with Thomaston facility closure750 374 42 91 - Costs associated with Long Island facility closure8,432 1,843 4,767 3,771 554 Costs/loss associated with optimi
Slide 20: Adjusted Net Earnings Reconciliation
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 impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands - except
Slide 21: Adjusted Income Tax Provision Reconciliation
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)Q1'14Q2'14Q3'14Q4'14Q1'15GAAP income tax provision($3,558)($9,942)($3,735)($1,321)($1,698)Special items, tax impact: Debt retirement
Slide 22: EBITDA and Adjusted EBITDA Reconciliation
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 expense (including debt retirement costs), income taxes, and depreciation and amortizat
Slide 23: Segment Adjusted EBITDA Reconciliation
(Dollars in thousands)Q1'14Q2'14Q3'14Q4'14Q1'15Consumer ProductsOperating (loss) income($523)$ 12,705$ 12,535(30,745)$ $ 12,395Depreciation and amortization expense15,490 15,071 15,484 15,459 12,977 Segment EBITDA1$ 14,967$ 27,776$ 28,019($15,286)$25,372Costs associated with Thomaston facility closu
Slide 24: ROIC Reconciliation
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 Cash and Short-term investments less Operating cash1. 4 Operating cash is defined as a minimum amount of available cash deemed by ma
Slide 25: Q2'15 Outlook Reconciliation of Non-GAAP Financial Measures
1 Non-GAAP measure – See definition and reconciliation to most comparable GAAP measure Q2’15 OUTLOOK1 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Slide 26: Outlook Reconciliation Notes
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 actual results may differ materially from the info
Slide 27: For More Information
FOR MORE INFORMATION: WWW.CLEARWATERPAPER.C@M