Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Investor Presentation (March 2014)
29 slides from Clearwater Paper's investor presentation, Mar 18, 2014
Slide 1: Clearwater Paper Corporation
Clearwater Paper Corporation March 2014 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 tissue market dynamics and our ability to capitalize on such, fu
Slide 3: Overview of Clearwater Paper
Overview of Clearwater Paper
Slide 4: Introduction to Clearwater Paper
• We are a company formed in late 2008 with more than 60 years of operating history • We operate two business segments – Pulp and Paperboard: 39% of 2013 net sales – Consumer Products: 61% of 2013 net sales • Financial overview for 2013 – Net Sales: $1.9 billion – Adjusted EBITDA : $200 million – to
Slide 5: Consumer Products Division Market Dynamics
Consumer Products Division Market Dynamics Stable Growth - The tissue market has grown an average of 1%-2% annually since 1996, consistent with population growth Source: U.S. Tissue demand per RISI for North America only from US Tissue Data January 2014, U.S. Population per U.S. Census December
Slide 6: Consumer Products Division Overview
Consumer Products Division Overview Clearwater Paper is one of the largest North American manufacturers of private label tissue, focused on high value tissue products across all categories, retail channels and geographies Key Products Overview of Facilities U.S. Tissue Industry Retail Channel Mix ¹
Slide 7: Private Label Continues to Capture Market Share in Tissue
Private Label Continues to Capture Market Share in Tissue Clearwater Paper ranks as one of the largest North American private label tissue manufacturers Source: IRIWorldwide
Slide 8: Opportunity for Private Label and Clearwater Paper to Grow Share in the Midwest and East
Opportunity for Private Label and Clearwater Paper to Grow Share in the Midwest and East Source: IRIWorldwide .
Slide 9: North American Market Demand vs. Capacity
North American Market Demand vs. Capacity Source: RISI August 2013 update for Outlook for World Tissue Business and company estimates It is assumed that any productivity improvements (approximately 100k per year or 1% of capacity) will be offset by closures over a cycle Notes: Projected capacity cha
Slide 10: Pulp and Paperboard Division Overview
Pulp and Paperboard Division Overview Clearwater Paper ranks as one of the top five largest paperboard manufacturers in North America Key Products Overview of Facilities 2013 North American Bleached Paperboard Production by Product Type² 2013 North American Bleached Paperboard Production by Market S
Slide 11: Paperboard Demand Remains Stable and Pricing Outlook is Favorable in the U.S.
Paperboard Demand Remains Stable and Pricing Outlook is Favorable in the U.S. Source: RISI estimates as of January 2014 ¹ Based on tons produced. Projections based on North American Packaging papers and board demand estimates per RISI. ² Average price per short ton of 16 pt. SBS folding carton C1S.
Slide 12: Clearwater Paper's Strategic Plan
Clearwater Paper’s Strategic Plan
Slide 13: Our Macro Strategy to Create Shareholder Value
• Lead private label in quality • Expand geographically • Expand retail channel penetration Our Macro Strategy to Create Shareholder Value • Improve sales mix • Reduce costs • Continue to improve quality
Slide 14: Our Year Strategy
Our 3 Year Strategy We are currently in the second year.
Slide 15: Clearwater Paper Cross Cycle Financial Model
Net sales 100% Gross profit % of net sales 17.0% SG&A 1 % of net sales (6.0%) Operating profit % of net sales 11.0% Net income % of net sales 5.0% EBITDA % of net sales 15.0% Clearwater Paper Cross Cycle Financial Model Includes Corporate SG&A percentage of net sales of 2.5%.
Slide 16: Successful Execution of Previously Stated Goals
Complete New Paper Machine and Corresponding Converting Lines at Shelby, NC Facilities Grow Market Share in Eastern U.S. and Expand in other Retail Channels Optimize the Paperboard Business Maintain a Prudent Capital Structure to lower Weighted Average Cost of Capital Asset Rationalization/Cost Infr
Slide 17: Clearwater Paper's Value Proposition
Clearwater Paper’s Value Proposition
Slide 18: Clearwater Paper is a Leader Amongst its Peers in Value Creation
Clearwater Paper is a Leader Amongst its Peers in Value Creation Source: Bloomberg as of February 28, Small cap tissue peers include Cascades, Orchids, and Wausau. ² Paperboard peers include International Paper, Graphic Packaging, Kapstone, MeadWestvaco, RockTenn, Packaging Corp of America, and Sono
Slide 19: Which Has Led to Multiple Expansion Since the Spin
Which Has Led to Multiple Expansion Since the Spin Source: Bloomberg, Capital IQ, market data as of February 28, 2014 Small cap tissue peers include Cascades, Orchids, and Wausau. ² Paperboard peers include International Paper, Graphic Packaging, Kapstone, MeadWestvaco, RockTenn, Packaging Corp of A
Slide 20: Path to Target $300M+ Adj. EBITDA
Path to Target $300M+ Adj. EBITDA 2013 Status (@2011 Price & Cost Structure) Non-GAAP measure – See definition and reconciliation to GAAP. In September 2012 we announced a $300 million Adjusted EBITDA target for 2014, which was based on 2011 prices and input costs. This table shows percentage change
Slide 21: Bridge to Pro Forma $75 Million Quarterly Run Rate
Bridge to Pro Forma $75 Million Quarterly Run Rate Assumes no change in prices or input costs from Q4’13. 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, especiall
Slide 22: Clearwater Paper's Outlook
Clearwater Paper’s Outlook
Slide 23: Updated Outlook by Segment
Consumer Products Paperboard Corporate Shipment volumes Updated Outlook – Flat Feb 2014 Outlook – 1-3% higher Updated Outlook – 1% Higher Feb 2014 Outlook – Stable Price/Mix Updated Outlook – No change Feb 2014 Outlook – TAD bathroom tissue mix increase 0-1% Higher Updated Outlook – 1% Higher Feb 20
Slide 24: Clearwater Paper (Appendix)
4 GLE RWATER
Slide 25: EBITDA and Adjusted EBITDA Reconciliation
EBITDA 1 $75.4 $344.8 $146.5 $192.7 $224.7 $189.6 Adjusted EBITDA¹ $75.4 $176.8 $170.5 $197.1 $229.1 $199.7 Reconciliation of GAAP to Non-GAAP: Clearwater Paper EBITDA and Adjusted EBITDA ¹ See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP m
Slide 26: Q4'13 EBITDA and Adjusted EBITDA
EBITDA 1 $61.0 Adjusted EBITDA ¹ $65.4 Reconciliation of GAAP to Non-GAAP: Clearwater Paper Q4’13 EBITDA and Adjusted EBITDA ¹ See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure. ($ in millions) Q4'13 Net earnings $82.9 Income tax pro
Slide 27: Pro Forma Adjusted EBITDA
EBITDA 1 $50.0 $40.0 $19.0 $300.0 Adjusted EBITDA ¹ $50.0 $40.0 $19.0 $300.0 Reconciliation of GAAP to Non-GAAP: Clearwater Paper Pro Forma Adjusted EBITDA ($ in millions) ¹ See Appendix for the definition of Adjusted EBITDA as well as the reconciliation to the most comparable GAAP measure. Shelby C
Slide 28: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is a non-GAAP measure that Clearwater Paper management uses as a supplemental performance measure to evaluate the cash generating capacity of Clearwater Paper. The most directly comparable GAAP measure is net earnings. EBITDA, as defined by Clearwater Paper ma
Slide 29: North American Tissue Projected Capacity Change
North American Tissue Projected Capacity Change Source: RISI and Other Industry Company Mill/Location Conv/TAD Capacity Change Date Channel/Business/Products Announced New Capacity Confidential Confidential Conv 80,000 2014* Metso Advantage DCT 200TS Confidential Confidential Conv 35,000 2014* Metso
Clearwater Paper — Investor Presentation (March 2014) on 6ix