Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q4 2018 Earnings Presentation
26 slides from Clearwater Paper's earnings presentation, Mar 12, 2019
Slide 1: Fourth Quarter and Full Year 2018 Supplemental Information
CLEARWATER PAPER CORPORATION FOURTH QUARTER AND FULL YEAR 2018 SUPPLEMENTAL INFORMATION 03/12/19 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 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 the Shelby, North Carolina expansion
Slide 3: 2018 Full Year Highlights
2018 FULL YEAR HIGHLIGHTS $1,724 MILLION NET SALES, FLAT VS. 2017 ($98) MILLION GAAP OPERATING LOSS $177 MILLION ADJUSTED EBITDA1 DILUTED GAAP EPS OF ($8.72) AND ADJUSTED DILUTED EPS OF $2.551 ACHIEVED RECORD PAPERBOARD PRODUCTION AND SHIPMENTS COMPLETED SALE OF LADYSMITH MILL $195 MILLION NON CASH
Slide 4: Fourth Quarter Financial Highlights
FOURTH QUARTER FINANCIAL HIGHLIGHTS $429 MILLION NET SALES, FLAT VS. Q3'18 ($175) MILLION GAAP OPERATING LOSS $45 MILLION ADJUSTED EBITDA1, AT HIGH END OF THE OUTLOOK RANGE OF $40 TO $46 MILLION DILUTED GAAP EPS OF ($11.39) AND ADJUSTED DILUTED EPS OF $0.451 CPD REVERSED OPERATING LOSS TO INCOME $19
Slide 5: Financial Summary (GAAP Basis)
FINANCIAL SUMMARY (GAAP BASIS) (UNAUDITED) Twelve Months Ended December 31, (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 Net sales $437,525 $429,663 $426,504 $436,716 $436,952 $432,099 $426,460 $428,707 $1,730,408 $1,724,218 1 Gross Prof
Slide 6: Financial Summary (Adjusted Basis)
FINANCIAL SUMMARY (ADJUSTED BASIS) (UNAUDITED) (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Outlook7 2017 2018 Net sales $437,525 $429,663 $426,504 $436,716 $436,952 $432,099 $426,460 $428,707 1% - 2% Lower $1,730,408 $1,724,218 Adjusted gro
Slide 7: 2018 vs. 2017 Consolidated Adjusted EBITDA Bridge
2018 VS. 2017 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE ADJ. EBITDA1 Lower tissue pricing and weaker mix partially PRICE/MIX offset by paperboard price increases (MILLIONS) $200 Lower tissue shipments primarily due to the sale $189.5 VOLUME of our Ladysmith mill in August, offset by record $190 paperboar
Slide 8: Q4'18 vs. Q3'18 Consolidated Adjusted EBITDA Bridge
Q4’18 VS. Q3’18 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE ADJ. EBITDA1 (MILLIONS) $54 Higher paperboard and tissue pricing from PRICE/MIX previously announced price increases partially offset by weaker paperboard mix $52 $2.7 Lower tissue shipments due to the sale of our $1.7 VOLUME Ladysmith mill and se
Slide 9: Key Segment Results - Consumer Products
KEY SEGMENT RESULTS - CONSUMER PRODUCTS (UNAUDITED) CONSUMER PRODUCTS CROSS-CYCLE Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FINANCIAL MODEL Shipments Retail (short tons) 78,686 77,714 77,544 75,123 80,971 73,070 70,335 69,480 Non-Retail (short tons)1 16,678 13,736 12,958 12,190 11,236 17,316 1
Slide 10: Clearwater Paper Tissue Shipments and U.S. Retail Tissue Market
CLEARWATER PAPER TISSUE SHIPMENTS AND U.S. RETAIL TISSUE MARKET CLW Q4'18 by CLW Q3'18 by Market Segment Market Segment (% of Tons) (% of Tons) U.S. Retail1 Tissue Market Q4'18 ($) Parent Other Other (MultiOutlet) Rolls Parent AFH Rolls 5% 1% 1% 6% 12% PRIVATE CATEGORY LABEL BRANDS TOTAL AFH 6% Tota
Slide 11: Q4'18 vs. Q3'18 Consumer Products Adjusted EBITDA Bridge
Q4'18 VS. Q3'18 CONSUMER PRODUCTS ADJUSTED EBITDA1 BRIDGE SEGMENT ADJ. EBITDA1 (MILLIONS) $20 Higher pricing due to previously announced price PRICE/MIX increases and higher mix of cases and lower parent roll shipments due to Ladysmith divestiture $18 $0.7 Lower shipments due to the sale of our Lady
Slide 12: Key Segment Results - Pulp and Paperboard
KEY SEGMENT RESULTS – PULP AND PAPERBOARD (UNAUDITED) PULP AND PAPERBOARD CROSS-CYCLE Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FINANCIAL MODEL Shipments1 Paperboard (short tons) 210,382 207,152 200,569 210,098 206,309 216,582 218,135 218,322 Sales Price1 Paperboard ($/short ton) $927 $955 $96
Slide 13: Clearwater Paper Paperboard Shipments and U.S. Paperboard Market
CLEARWATER PAPER PAPERBOARD SHIPMENTS AND U.S. PAPERBOARD MARKET CLW Q4'18 by CLW Q3'18 by Market Segment Market Segment U.S. Paperboard Production Q4'183 (% of Tons) (% of Tons) CLEARWATER CATEGORY PAPER OTHER Folding Folding 55% Total Domestic 14% 86% 56% SBS1 Market Share Folding 19% 81% Food Ser
Slide 14: Q4'18 vs. Q3'18 Pulp and Paperboard Adjusted EBITDA Bridge
Q4’18 vs. Q3'18 PULP AND PAPERBOARD ADJUSTED EBITDA1 BRIDGE SEGMENT ADJ. EBITDA1 (MILLIONS) $50 Weaker mix largely offset by higher prices due to PRICE/MIX previously announced price increase $48 $47.7 $— VOLUME Flat -$0.1 $46 Higher natural gas prices due to a pipeline ENERGY disruption impacting t
Slide 15: Clearwater Paper Cross-Cycle Financial Model
CLEARWATER PAPER CROSS-CYCLE FINANCIAL MODEL Twelve Months Ended December 31, CLEARWATER PAPER CROSS-CYCLE (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 FINANCIAL MODEL Net sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Adjusted gross profit margin1 1
Slide 16: Q1'19 Adjusted EBITDA Outlook and Reconciliation
Q1’19 ADJUSTED EBITDA OUTLOOK1 AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) OUTLOOK THREE MONTHS ENDING MARCH 31, 2019 RANGE OF ESTIMATE (Dollars in thousands) FROM TO Earnings before interest, income taxes, and depreciation & amortization (EBITDA)2: GAAP net earnings $1,500 $5,500
Slide 17: Q1'19 Adjusted Net Earnings Outlook and Reconciliation
Q1’19 ADJUSTED NET EARNINGS OUTLOOK1 AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) OUTLOOK THREE MONTHS ENDING MARCH 31, 2019 RANGE OF ESTIMATE (Dollars in thousands) FROM TO GAAP Operating Income $11,000 $17,000 Directors' equity-based compensation expense 500 500 Reorganization exp
Slide 18: Q1'19 Outlook
Q1'19 OUTLOOK1 NET SALES 1% - 2% Lower ADJUSTED OPERATING MARGIN2,3 3.0% - 4.5% ADJUSTED EBITDA2 $37M - $43M ADJUSTED NET EARNINGS PER DILUTED COMMON SHARE2,4 $0.16 - $0.40 1 This information is based upon management’s current expectations and estimates, which are in part based on market and industr
Slide 19: Appendix
AG sisegoorss APPENDIX
Slide 20: Adjusted Gross Profit & Adjusted SG&A Reconciliation
ADJUSTED GROSS PROFIT & ADJUSTED SG&A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Twelve Months Ended December 31, (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 Gross profit1,2 $50,465 $48,602 $39,742 $61,258 $44,519 $44,945 $50,239 $46,503 $200,067 $
Slide 21: Segment Adjusted Operating Income (Loss) Reconciliation
SEGMENT ADJUSTED OPERATING INCOME (LOSS) RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Twelve Months Ended December 31, (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 Consumer Products Operating income (loss)1,3 $6,204 $10,698 $4,525 $7,546 $1,629 ($3,60
Slide 22: Adjusted Net Earnings & Adjusted EPS Reconciliation
ADJUSTED NET EARNINGS & ADJUSTED NET EARNINGS PER DILUTED COMMON SHARE RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Twelve Months Ended December 31, (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 GAAP net earnings (loss) $7,51
Slide 23: Adjusted Income Tax Provision Reconciliation
ADJUSTED INCOME TAX PROVISION RECONCILIATION OF NON-GAAP FINANCIAL MEASURE (UNAUDITED) Twelve Months Ended December 31, (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 GAAP income tax (provision) benefit ($5,000) ($3,955) $3,095 $62,245 $360 ($2,510) ($3,675) ($4,480
Slide 24: EBITDA & Adjusted EBITDA Reconciliation
EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Twelve Months Ended December 31, (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 Earnings before interest, income taxes, and depreciation & amortization (EBITDA)1 GAAP net earnings (lo
Slide 25: Segment EBITDA & Adjusted EBITDA Reconciliation
SEGMENT EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Twelve Months Ended December 31, (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 2017 2018 Consumer Products Operating income (loss)1,4 $6,204 $10,698 $4,525 $7,546 $1,629 ($3,604) $21,6
Slide 26: For More Information: www.clearwaterpaper.com
FOR MORE INFORMATION: WWW.CLEARWATERPAPER.COM 26