Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q2 2021 Earnings Presentation
21 slides from Clearwater Paper's earnings presentation, Aug 4, 2021
Slide 1: Clearwater Paper Corporation Second Quarter Earnings Release Materials
CLEARWATER PAPER CORPORATION SECOND QUARTER EARNINGS RELEASE MATERIALS AUGUST 4, 2021 ARSEN S. KITCH President, Chief Executive Officer And Director MICHAEL J. MURPHY 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 the Private Securities Litigation Reform Act of 1995, including
Slide 3: Q2 2021 Business Highlights
Q2 2021 BUSINESS HIGHLIGHTS Overall • Net loss $52 million, including $31 million (after tax) associated with Neenah closure • Adjusted net loss $18 million • Adjusted EBITDA $15 million Pulp and Paperboard • Continued strong customer demand • SBS prices increased • Successfully completed major main
Slide 4: Business Update – Pulp and Paperboard
BUSINESS UPDATE – PULP AND PAPERBOARD DIVERSIFIED RANGE OF END-MARKET PRODUCTS AND FLEXIBILITY IN OUR SUPPLY CHAIN PROVIDED OVERALL STRONG RESULTS Industry • We estimate ~2/3 of industry demand is driven by recession resilient end-market segments, such as food packaging and other consumer goods • ~1
Slide 5: Business Update – Consumer Products
BUSINESS UPDATE – CONSUMER PRODUCTS RETAIL TISSUE SHIPMENTS BOTTOMED IN Q2 2021 Industry • Pre-COVID: ~10 million ton demand with ~2/3 at-home, ~1/3 away from home • Initial COVID reaction: shift to at-home demand and consumer pantry stocking in 2020 • Current COVID phase: reverting towards historic
Slide 6: Financial Performance
FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Quarter Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net sales $ 406.4 $ 480.6 $ 832.3 $ 958.5 Cost of sales 392.2 396.7 762.8 819.7 Selling, general and adminstrative 26.3 32.6 54.1 60.1 Other operating charges, net1 44
Slide 7: Segment Profit and Loss and Adjusted EBITDA
SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) Quarter Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net Sales Pulp and Paperboard $ 227.4 $ 216.5 $ 447.2 $ 439.6 Consumer Products 180.7 271.3 389.0 533.8 Eliminations (1.7) (7.2) (3.9) (15.0) $ 406.4 $ 480.6 $ 832.3 $ 958
Slide 8: Pulp and Paperboard Results
PULP AND PAPERBOARD RESULTS Q2 2021 VS. Q2 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) $55 $11.2 $0.0 $50 $45 $41.2 $40 $35 Higher pricing with favorable $30 mix $25 $22.0 $20 -$30.4 $15 Major outage1 $10 and input costs $5 $0 Q2'20 Adj. EBITDA Price/Mix Volume Costs/Other Q2'21 Adj. EBITDA 1. Esti
Slide 9: Consumer Products Results
CONSUMER PRODUCTS RESULTS Q2 2021 VS. Q2 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Lower sales $60 and production $53.9 volumes $50 -$0.2 $40 $30 Higher input costs partially $20 offset by reduced SG&A $10 -$40.8 $6.7 -$6.2 $0 Q2'20 Adj. EBITDA Price/Mix Volume Costs/Other Q2'21 Adj. EBITDA © Cle
Slide 10: Capital Structure and Allocation
CAPITAL STRUCTURE AND ALLOCATION Liquidity Profile ($ in millions)1 Capital structure: supportive and stable • Ample liquidity ABL Availability $239.2 • No material near-term debt maturities Less Utilization (3.6) • Corporate/Issuer ratings: Ba2/BB- Plus Unrestricted Cash 60.9 Liquidity $296.5 Capit
Slide 11: Outlook for 2021 - Assumptions
OUTLOOK FOR 2021 - ASSUMPTIONS Q3 2021 Operational: $40 to $48 million of Adjusted EBITDA • Lower major maintenance outage impact, net benefit $17 to $19 million • Positive impact of previously announced price increases in paperboard • Increased tissue sales sequentially • Raw material inflation imp
Slide 12: Clearwater Paper Value Proposition
CLEARWATER PAPER VALUE PROPOSITION WELL POSITIONED ACROSS TWO ATTRACTIVE BUSINESSES Pulp and Paperboard • Diversified range of end-market products, well-invested national footprint • Focused on non-integrated customers with strong service and quality commitment • Well positioned for trends towards s
Slide 13: Appendix
APPENDIX © Clearwater Paper Corporation 2021 13
Slide 14: Pulp and Paperboard Sequential Quarter Results
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q2 2021 VS. Q1 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) $50 $45 $7.3 $40 -$1.1 $35 $34.0 $30 Favorable mix $25 and higher pricing $22.0 $20 -$18.2 $15 Major maintenance, $10 absence of weather event, $5 input costs1 $0 Q1'21 Adj. EBITDA Price/Mix Vo
Slide 15: Consumer Products Sequential Quarter Results
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q2 2021 VS. Q1 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) $40 Reduced demand $34.7 $0.6 $35 $30 $25 Higher input $20 costs partially offset by lower $15 SG&A -$21.8 $10 $6.7 $5 -$6.8 $0 Q1'21 Adj. EBITDA Price/Mix Volume Costs Q2'21 Adj. EBITDA © Clearw
Slide 16: Key Segment Information
KEY SEGMENT INFORMATION Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Pulp and Paperboard Sales ($ millions) $212.1 $235.4 $223.6 $214.3 $223.1 $216.5 $217.2 $220.4 $219.7 $227.4 Adjusted EBITDA ($ millions) $38.9 $42.9 $28.2 $44.0 $35.5 $41.2 $41.8 $42.8 $34.0 $22.
Slide 17: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) Three Months Ended Six Months Ended June 30, March 31, June 30, 2021 2020 2021 2021 2020 Net income (loss) $ (51.6) $ 22.8 $ 12.1 $ (39.6) $ 33.1 Income tax provision (benefit) (16.7) 10.4 3.2 (13.5) 4.2 Interest expense, net 9.3 12.0 9.3 18.6 24.9 D
Slide 18: Reconciliation of Adjusted Income
RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Quarter Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net income $ (51.6) $ 22.8 $ (53.1) $ 33.1 Add back: Income tax provision (16.7) 10.4 - 4.2 Income before income taxes (68.4) 33.2 (53.1) 37.4 Add back: De
Slide 19: Additional Reconciliations
ADDITIONAL RECONCILIATIONS ($ IN MILLIONS) Net Debt Mar 31, 2020 June 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 June 30, 2021 Cash $ 60.8 $ 48.2 $ 47.5 $ 35.9 $ 57.1 60.9 Current debt 58.1 1.6 1.7 1.7 1.7 1.7 Long term debt 883.9 827.9 785.5 716.4 716.3 716.2 add: Deferred debt costs 7.7 6.4
Slide 20: Major Maintenance Schedule
MAJOR MAINTENANCE SCHEDULE ($ IN MILLIONS) $30 $25 - $30 $25 - $27 $24 $22 $18 $20 $7 $7 $18 $17 Idaho $10 None None 2015 2016 2017 2018 2019 2020 2021e 1 2022e1 Q1 Q2 Q3 Q4 Total 1. This information is based upon management’s current expectations and estimates, as well as historical averages. Many
Slide 21: Key Commodity Consumption Volumes
KEY COMMODITY CONSUMPTION VOLUMES Unit of Approximate Annual Volume1 COGS Input Measure (in millions) Purchased Pulp Ton 0.3 Fiber Bone Dry Ton 1.7 Diesel Gallon 10 Electric MWh 0.95 Natural Gas MMBTU 9.5 Polyethylene Pound 30 Caustic Pound 90 Chlorate Pound 30 1 Approximated annual volume and expen