Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q4 2022 Earnings Presentation
22 slides from Clearwater Paper's earnings presentation, Feb 14, 2023
Slide 1: Fourth Quarter Earnings Release Materials
CLEARWATER PAPER CORPORATION FOURTH QUARTER EARNINGS RELEASE MATERIALS FEBRUARY 14, 2023 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: Q4 2022 and Full Year 2022 Business Highlights
Overall • Net sales $527 million for Q4, $2.1 billion for 2022 • Net loss $6 million for Q4, net income $46 million for 2022 • Adjusted net loss $5 million for Q4, adjusted net income $63 million for 2022 • Adjusted EBITDA $28 million for Q4, $227 million for 2022 • Inflation pressures across both b
Slide 4: Business Update – Pulp and Paperboard
Industry • Demand and order backlogs moderated later in the year • While inflation and economic uncertainty exist, end markets tend to be economically resilient • RISI reported market price increases • $250/ton in 2021, $100/ton in Q1 2022, $100/ton in Q2 2022 and $30/ton in Q4 2022 Clearwater Paper
Slide 5: Business Update – Consumer Products
Industry • Consumers shifting to private brands with economic uncertainty and inflation • Private brand market share rising to 35.5%1 Clearwater Paper • Strong demand with Q4 2022 shipments of 13.0 million cases compared to 12.4 million in Q4 2021 • Solid operational performance • Inflation across r
Slide 6: Financial Performance
© Clearwater Paper Corporation 2023 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 2022 2021 Net sales 526.7$ 489.8$ 2,080.1$ 1,772.6$ Cost of sales 491.4 429.1 1,823.4 1,590.0 Selling, general and adminstrative 33.5 30.5 133.0 112.9 Other operating charges, net 1.2 2.6 9.
Slide 7: Segment Profit and Loss and Adjusted EBITDA
© Clearwater Paper Corporation 2023 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 2022 2021 2022 2021 Net Sales Pulp and Paperboard 273.5$ 261.3$ 1,136.3$ 946.0$ Consumer Products 254.1 231.8 950.2 835.0 Eliminations (0.9) (3.3) (6.4) (8.4) 526.7$ 489.8$ 2,080.1$ 1,772.6$ Operating Inc
Slide 8: Pulp and Paperboard Q4 2022 Results
PULP AND PAPERBOARD Q4 2022 RESULTS Q4 2022 VS. Q4 2021 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 8 SEGMENT INCOME SEGMENT ADJUSTED EBITDA Note: Q4’22 had a major maintenance outage which impacted Adjusted EBITDA by $28 million and we had no major maintenance outages in pri
Slide 9: Pulp and Paperboard Full Year 2022 Results
PULP AND PAPERBOARD FULL YEAR 2022 RESULTS 2022 VS. 2021 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 9 SEGMENT INCOME SEGMENT ADJUSTED EBITDA
Slide 10: Consumer Products Q4 2022 Results
CONSUMER PRODUCTS Q4 2022 RESULTS Q4 2022 VS. Q4 2021 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 10 SEGMENT INCOME (LOSS) SEGMENT ADJUSTED EBITDA
Slide 11: Consumer Products Full Year 2022 Results
CONSUMER PRODUCTS FULL YEAR 2022 RESULTS 2022 VS. 2021 SEGMENT RESULTS(1) ($ IN MILLIONS) © Clearwater Paper Corporation 2023 11 SEGMENT INCOME (LOSS) SEGMENT ADJUSTED EBITDA (1) Previously reported quarterly bridges may not agree to full year due to changes in calculations during the period.
Slide 12: Capital Structure and Allocation
© Clearwater Paper Corporation 2023 CAPITAL STRUCTURE AND ALLOCATION Capital structure summary: • Ample liquidity • No material near-term debt maturities • Corporate/Issuer ratings: Ba2/BB- • Net debt to Adjusted EBITDA ratio of 2.27x at year end 2022 $0.0 $0.0 $270.0 $0.0 $0.0 $0.0 2023 2024 2025 2
Slide 13: Outlook for Q1 and 2023
OUTLOOK FOR Q1 AND 2023 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2023 Q1 2023: $65 to $75 million of Adjusted EBITDA • $42 million benefit due to no major maintenance outages and lower impact from operational issues • Previously announced price increases and mix largely offsetting cost inf
Slide 14: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES © Clearwater Paper Corporation 2022 • Invest capital to sustain current asset base • $60 to $70 million per year outside of major projects Sustain the business Preserve financial flexibility Enhance value DISCIPLINED APPROACH TO CAPITAL ALLOCATION 1 2 3 14 • Reduce leve
Slide 15: Appendix
APPENDIX © Clearwater Paper Corporation 2022 15
Slide 16: Pulp and Paperboard Sequential Quarter Results
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q4 2022 VS. Q3 2022 SEGMENT RESULTS © Clearwater Paper Corporation 2023 16 SEGMENT INCOME SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Note: Q4’22 had a major maintenance outage which impacted Adjusted EBITDA by $28 million and we had no major maintenance ou
Slide 17: Consumer Products Sequential Quarter Results
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q4 2022 VS. Q3 2022 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 17 SEGMENT INCOME SEGMENT ADJUSTED EBITDA
Slide 18: 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. Q4’2020 Q1’2021 Q2’2021 Q3’2021 Q4’2021 Q1’2022 Q2’2022 Q3’2022 Q4’2022 Pulp and Paperboard
Slide 19: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) September 30, 2022 2021 2022 2022 2021 Net income $ (5.9) $ 9.6 $ 20.6 $ 46.0 $ (28.1) Income tax provision (benefit) (2.3) 6.1 18.9 27.0 (7.7) Interest expense, net 7.3 8.9 8.0 34.6 36.4 Depreciation and amortization expense 25.9 25.4 26.2 103.3 105
Slide 20: Reconciliation of Adjusted Income
© Clearwater Paper Corporation 2023 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 2022 2021 Net income (loss) (5.9)$ 9.6$ 46.0$ (28.1)$ Add back: Income tax provision (benefit) (2.3) 6.1 27.0 (7.7) Income (loss) before income taxes (8.2) 15.6 73.1 (35.7) Add b
Slide 21: Additional Reconciliations
ADDITIONAL RECONCILIATIONS Net Debt Mar 31, 2021 June 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 June 30, 2022 Sept 30, 2022 Dec 31, 2022 Cash $ 57.1 $ 60.9 $ 27.8 $ 25.2 $ 36.4 $69.5 $50.8 $53.7 Current debt 1.7 1.7 1.6 1.6 1.6 1.0 1.0 0.9 Long term debt 716.3 716.2 676.5 637.6 617.7 589.9 56
Slide 22: Major Maintenance Schedule
$2 $10 $22 $4 $20 $17 $5 $7 $28 $30 $24 $27 $5 - $7 $30 - $35 2017 2018 2019 2020 2021 2022 2023e 2024e Q1 Q2 Q3 Q4 Total $34 MAJOR MAINTENANCE SCHEDULE ADJUSTED EBITDA IMPACT ($ IN MILLIONS) 1. This information is based upon management’s current assumptions and estimates. 2. See “Forward-Looking St