Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Goldman Sachs 2011 Montreal Paper Conference
24 slides from Clearwater Paper's conference presentation, Mar 16, 2011
Slide 1: Clearwater Paper Corporation
Exhibit 99.1 Clearwater Paper Corporation Goldman Sachs 2011 Montreal Paper Conference March 16, 2011 0
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 the benefits of, and synergies from, our Cellu Tissue acquisitio
Slide 3: Company Overview
Company Overview Clearwater Paper is a leader in quality private label consumer tissue and exceptional bleached paperboard – focused on helping our customers build their brands. 2
Slide 4: Clearwater Paper Overview
Clearwater Paper Overview ($ in millions) Leading manufacturer of private-label consumer tissue and fully-bleached SBS paperboard, with approximately $1.4 billion in net sales and $166.8 million of Adjusted EBITDA¹ for the twelve months ended December 31, 2010 % of LTM Net Sales² Consumer Pulp & Pro
Slide 5: Financial Track Record
Financial Track Record ($ in millions) Net Sales¹ Adjusted EBITDA2,3 5 Yr Average: $1,236 5 Yr Average: $124 $174 $167 $1,373 $1,255 $1,250 13.9% $1,183 $1,117 12.2% $51 $101 $104 $803 $696 $111 $751 $75 $731 $672 9.0% 8.8% 6.0% $70 $80 $35 $138 $87 $504 $554 $570 $445 $452 $53 $41 $34 2006 2007 200
Slide 6: Historical Cost Drivers - Wood Fiber
Historical Cost Drivers - Wood Fiber 2008 2009 2010 Total Cost¹: $325.4 M $269.7 M $314.3 M Wood Fiber % of Total 28% 26% 27% Cost of Sales • Wood fiber includes pulp, wood chips, sawdust and saw logs. • Historically, we have been a net buyer of approximately 85,000 tons of pulp annually. Going forw
Slide 7: Other Key Historical Cost Drivers
Other Key Historical Cost Drivers Other key cost drivers are chemicals, energy, transportation and maintenance 2008 2009 2010 Total Cost: $143.0 M $123.2 M $132.3 M Chemicals % of Total 12% 12% 11% Cost of Sales Total Cost: $114.7 $97.3 $92.0 Energy % of Total 10% 9% 8% Cost of Sales Total Cost: $12
Slide 8: Strong Financial Performance
Strong Financial Performance Clearwater Paper Cellu Tissue (Twelve Months Ended (Period from January 1, 2010 Combined December 31, 2010) through December 27, 2010) ($ in Millions) Net Sales 2 $1,373.0 $529.6 $1,902.6 Adjusted EBITDA 3 $166.8 $42.1 $208.9 4 Adjusted EBITDA Margin % 12.2% 7.9% 11.0% C
Slide 9: Pro Forma Sales Mix Change
Pro Forma Sales Mix Change Twelve Months Ended Period from January 1, 2010 December 31, 2010 through December 27, 2010 Clearwater Paper Cellu Tissue Stand Alone Sales Mix Stand Alone Sales Mix¹ Pro Forma Sales Mix Foam Machine- 1% Consumer glazed Products 22% 42% Pulp & Paperboard 42% Pulp & Consume
Slide 10: Consumer Products Segment Overview
Consumer Products Segment Overview High-Quality, Premium Products ($ in millions) • Committed to maintaining high-quality products that match the quality of leading national brands • Only U.S. consumer tissue producer that manufactures solely private label tissue $160 $138 $140 $129 $120 $100 $87 $8
Slide 11: Attractive Industry Characteristics - Tissue
Attractive Industry Characteristics -Tissue Source: RISI and IRI. 1 Based on converted short tons. 10 2 Represents market share as a % of sales in U.S. grocery channel.
Slide 12: 2010 North American Tissue Market by Producer
2010 North American Tissue Market by Producer Large Brand Manufacturers 35.0% 30% 30.0% 25.0% 20.0% 17% Remaining Manufacturing Base Highly Fragmented 16% 15.0% 10.0% 7% 6% 5% 5.0% 4% 4% 2% 2% 2% 1% 1% 1% 1% 1% 1% 0% 0% 0% 0.0% 1 The Combined Company Was the Sixth-Largest Manufacturer in the North A
Slide 13: Consumer Products Strategy
Consumer Products Strategy Cellu Tissue Acquisition • National manufacturing footprint to complement existing national customer footprint • Ability to service all tissue quality segments (ultra, premium, value and economy) as well as away-from-home tissue market • Strengthen position as one of the l
Slide 14: Cellu Tissue Synergies
Cellu Tissue Synergies • Reduction in Freight Cost • Pulp Integration • Pulp Purchasing • SG&A • Parent Roll Integration • Efficiency Improvements • Scale Benefits $15-$20 Million of Annual Net Cost Savings Expected to Be Realized by End of 2012 13
Slide 15: Synergy Opportunity Example
Synergy Opportunity Example Underutilized large converting winder in Neenah, WI (formerly Cellu Tissue) can more efficiently produce Away-from-Home products and 1000 count bathroom tissue •Actions: 1. Relocate a wrapper machine from Elwood, IL (formerly CLW) to Neenah, WI 2. Reposition an underutili
Slide 16: Pulp and Paperboard Segment Overview
Pulp and Paperboard Segment Overview High-Quality, Premium Products ($ in millions) • Focus on high-end paperboard products, Net Sales¹ such as pharmaceuticals and cosmetics packaging – Superior print surfaces and cleanliness for discriminating domestic and international markets – Valued industry co
Slide 17: Attractive Industry Characteristics – Paperboard
Attractive Industry Characteristics – Paperboard Source: RISI. 1 Top 5 manufacturers in 1998 were International Paper, Westvaco, Temple-Inland, Georgia-Pacific and Potlatch. Top 5 manufacturers in 2010 were International Paper, MeadWestvaco, Georgia-Pacific, Evergreen Packaging and Clearwater Paper.
Slide 18: Strategically Positioned Pulp & Paperboard Facilities
Strategically Positioned Pulp & Paperboard Facilities Facilities positioned to provide broad geographic reach and cost-efficient transportation points 2010 PPD Sales • Idaho Mill – Reduced transportation • Arkansas Mill costs to Asia versus East Coast competitors – Central location reduces freight c
Slide 19: Appendix A: Financial Detail
Appendix A: Financial Detail 18
Slide 20: Approximate Pulp Flows
Approximate Pulp Flows (in tons) Net Pulp Purchased 2010 Projected¹ External Pulp Purchases – CLW 134,000 134,000 External Pulp Purchases – CLU² 0 240,000 External Pulp Sales (60,000) 0 Net Pulp Purchased 74,000 374,000 Pulp Integration 2010 Projected¹ Pulp Production 804,000 (92% of requirements) 8
Slide 21: Reconciliation of GAAP to Non-GAAP: Clearwater Paper EBITDA and Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP: Clearwater Paper EBITDA and Adjusted EBITDA ($ in millions) 2006 2007 2008 2009 2010 Net Earnings $20.9 $25.3 $9.7 $182.5 $73.8 Income Tax Provision 12.4 14.1 5.6 93.2 2.4 Interest Expense 13.0 13.0 13.1 15.5 22.6 Earnings Before Interest and 46.3 52.4 28.5 291.2
Slide 22: Reconciliation of GAAP to Non-GAAP: Cellu Tissue EBITDA and Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP: Cellu Tissue EBITDA and Adjusted EBITDA ($ in millions) Cellu Tissue (Period from January 1, 2010 through December 27, 2010) Net Loss $(56.2) Income Tax Provision (34.6) Interest Expense 86.4 Earnings Before Interest and (4.4) Income Taxes Depreciation & Amortizat
Slide 23: Reconciliation of GAAP to Non-GAAP: Clearwater Paper Segment EBITDA and Segment Adjusted EBITDA
Reconciliation of GAAP to Non-GAAP: Clearwater Paper Segment EBITDA and Segment Adjusted EBITDA ($ in millions) 2006 2007 2008 2009 2010 Consumer Products Operating Income $25.7 $17.6 $37.3 $122.1 $63.7 Depreciation 15.8 16.3 15.7 16.0 17.0 Segment EBITDA¹ $41.5 $33.9 $53.0 $138.1 $80.7 Cellu Tissue
Slide 24: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures Clearwater Paper Definitions of Non-GAAP Measures EBITDA is a non-GAAP measure that Clearwater Paper management uses to evaluate the cash generating capacity of Clearwater Paper. The most directly comparable GAAP measure is net earnings. EBITDA, as defined by Clearwa
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