Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q3 2024 Earnings Presentation
16 slides from Clearwater Paper's earnings presentation, Nov 4, 2024
Slide 1: Third Quarter Earnings Release Materials
Third Quarter Earnings Release Materials November 4, 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 Section 27A of the Securities Act of 1933, as amended, and Se
Slide 3: Strategic Updates
Strategic Updates Completed sale of tissue business for $1.06 Transformed Clearwater into a leading paperboard packaging supplier Focused on strengthening our position as a premier, independent supplier billion1 on November 1 of paperboard packaging products to North American converters Utilized ~$8
Slide 4: Clearwater Paper at a Glance
Clearwater Paper WA MT ND at a Glance MN MI ME ID SD WI OR VT MI NH WY NY MA IA NE CT RI PA IL OH NJ Top 3 paperboard supplier in North America IN NV UT CO WV MD DE KS MO KY VA Non-integrated, servicing independent converters CA OK TN NC AR AZ NM SC Well positioned assets to serve customers MS AL GA
Slide 5: Paperboard is a 10 million ton industry with stable demand
Paperboard is a 10 million1 ton industry SOLID BLEACH SULFATE (SBS) COATED UNBLEACHED KRAFT (CUK) with stable demand and broad consumer 5M 2.5M TONS packaging applications TONS Beverage carrier applications 10M High quality packaging applications of consumer goods TON TOTAL and foodservice AVAILABLE
Slide 6: Clearwater Serves Independent Converters
Clearwater Serves Independent Converters INDEPENDENT CONVERTERS Purchase paperboard from suppliers and convert into final packaging INDEPENDENT SUPPLIERS • 45%1 of North American paperboard market Non-integrated, produce base • Strong and differentiated alternative to integration converters, offerin
Slide 7: Clearwater is Well Positioned to Deliver Strong Returns
Clearwater is Well Positioned to Deliver Strong Returns TARGETING STRONG CASH FLOW GENERATION ACROSS THE CYCLE ADJUSTED EBITDA TARGET MARGINS Paperboard industry is cyclical, Across the cycle Adjusted EBITDA margins driven by supply and demand balance targeted at around 13% to 14% >16% Cycle peak Cu
Slide 8: Optimized Capital Allocation Approach Supports Value Creation
Optimized Capital Allocation Approach Supports Value Creation Investing to maintain Utilizing free cash flow Evaluating strategic the long-term (FCF) to deleverage capital investments to performance of our our balance sheet diversify product assets portfolio Opportunistic M&A to $70-80M 1-2x support
Slide 9: Q3 2024 Business Highlights
Q3 2024 SBS PAPERBOARD MARKET Industry shipments1 up 2.4% Q3’24 vs. Q2’24 Business CONTINUES TO RECOVER Industry shipments1 up 2.5% YTD 2024 vs. YTD 2023 Highlights Industry operating rates1 at 85% YTD, up 1.8% vs. YTD 2023 DRIVEN BY NET SALES, TOTAL OPERATIONS 67% increase in paperboard volume Prim
Slide 10: Q3'24 vs Q3'23 Adjusted EBITDA Results from Total Operations
Q3’24 VS Q3’23 Adjusted EBITDA Results from Total Operations ($ in millions) Maintenance Augusta SG&A outage costs Lower pricing Higher tissue partially offset by volume and lower input costs addition of Augusta volume 10
Slide 11: Outlook for Q4'24 and Initial 2025 Assumptions
Outlook for Q4’24 and Initial 2025 Assumptions Q4 2024: $20 to $30 million of Adjusted EBITDA1 from Total Operations One month of Adjusted EBITDA from discontinued operations (tissue) in the fourth quarter Augusta planned major maintenance outage, direct cost of $15 to $20 million No major maintenan
Slide 12: Optimistic About Long-Term Value Creation
Optimistic About Long-Term Value Creation Sale of our tissue business enables sharpened • Meaningfully de-levered balance sheet with proceeds from sale focus on improving and growing our • Focus on growing our position as a premier independent paperboard business paperboard packaging supplier to Nor
Slide 13: Appendix
Appendix 4 igeenre
Slide 14: Financial Performance
FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE INFORMATION) QU AR TER END ED Y EAR TO D ATE SEPTEMB ER 30, JU NE 30, SEPTEMB ER 30, 2024 2023 2024 2024 2023 Net sales $ 393.3 $ 278.9 $ 344.4 $ 996.5 $ 867.4 Cost of sales 363.2 228.3 346.4 935.1 702.6 Selling, general and adminstrative 31.6 2
Slide 15: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA ($ IN MILLIONS) Quarter Ended Nine Months Ended September 30, June 30, September 30, 2024 2023 2024 2024 2023 Net income (loss) $ 5.8 $ 36.6 $ (25.8) $ (2.8) $ 90.1 Less: Income from discontinued operations 16.6 21.7 15.7 51.6 38.8 Income (loss) from continuing oper
Slide 16: Q2'24 vs Q3'24 Adjusted EBITDA Results from Total Operations
Q2’24 VS Q3’24 Adjusted EBITDA Results from Total Operations ($ in millions) Higher cost due to expanded sales Reduced maintenance costs Change in mix Higher sales and production volume 16