Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q1 2021 Earnings Presentation
21 slides from Clearwater Paper's earnings presentation, May 5, 2021
Slide 1: Clearwater Paper Corporation First Quarter 2021 Earnings Release Materials
Clearwater Paper Corporation First Quarter 2021 Earnings Release Materials May 5, 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: Q1 2021 Business Highlights
Q1 2021 BUSINESS HIGHLIGHTS Overall Net Income of $12 million Adjusted EBITDA of $54 million Pulp and Paperboard Continued strong customer demand Prices increasing and mix improving Weather event impacted business directly by $6.5 million Consumer Products Sales dropped due to pull back
Slide 4: Business Update – Pulp and Paperboard
BUSINESS UPDATE – PULP AND PAPERBOARD Diversified range of end-market products and flexibility in our supply chain provided overall strong results Industry We estimate ~2/3 of industry demand is driven by recession resilient end-market segments, such as food packaging and other consumer goods ~1
Slide 5: Business Update – Consumer Products
BUSINESS UPDATE – CONSUMER PRODUCTS Demand for retail tissue dropped significantly in Q1 2021 Industry (North America) Pre-COVID: ~10 million ton demand with ~2/3 at home, ~1/3 away from home Initially: COVID pandemic led to shift to at-home demand and consumer pantry stocking Now: excess inve
Slide 6: Financial Performance
FINANCIAL PERFORMANCE ($ in millions, except per share amounts) Quarter Ended March 31, 2021 2020 Net Sales $ 425.9 $ 477.9 Cost of Sales 370.6 423.0 Selling, general and adminstrative 27.8 27.5 Other operating charges, net 0.4 8.6 Income from operations 27.1 18.8 Non-operating expense (11.8) (14.7)
Slide 7: Segment Profit and Loss and Adjusted EBITDA
SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ in millions) Quarter Ended March 31, 2021 2020 Net Sales Pulp and Paperboard $ 219.7 $ 223.1 Consumer Products 208.4 262.5 Eliminations (2.2) (7.8) $ 425.9 $ 477.9 Operating Income Pulp and Paperboard $ 25.0 $ 26.2 Consumer Products 17.9 14.6 Corporate
Slide 8: Pulp and Paperboard Results
PULP AND PAPERBOARD RESULTS Q1 2021 vs. Q1 2020 Segment Adjusted EBITDA ($ in millions) Higher pricing with favorable Lower volume mix Weather event offset by lower input cost Page 8 © Clearwater Paper Corporation 2021
Slide 9: Consumer Products Results
CONSUMER PRODUCTS RESULTS Q1 2021 vs. Q1 2020 Segment Adjusted EBITDA ($ in millions) Favorable mix Lower input Lower volume costs, Shelby improvements and lower transportation costs Page 9 © Clearwater Paper Corporation 2021
Slide 10: Capital Structure and Allocation
CAPITAL STRUCTURE AND ALLOCATION Capital Structure: Supportive and Stable Liquidity Profile ($ in millions)1 Capital structure provides ample liquidity ABL Availability $229.2 Less Utilization (3.6) No material near-term debt maturities Plus Unrestricted Cash 57.1 Corporate/Issuer ratings: Ba2
Slide 11: Outlook for 2021 - Assumptions
OUTLOOK FOR 2021 - ASSUMPTIONS Q2 2021 Operational Impact of announced price increase in paperboard No cold weather event impact - $6.5 million Lewiston planned major maintenance $21 to $24 million impact to Adjusted EBITDA in the quarter Lower expected tissue sales, more substantial product
Slide 12: Clearwater Paper Value Proposition
CLEARWATER PAPER VALUE PROPOSITION Well positioned across two attractive businesses Pulp and Paperboard: Diversified range of end-market, well-invested national footprint Focused on non-integrated customers with strong service and quality commitment Well positioned for trends towards sustainab
Slide 13: Appendix
Appendix © Clearwater Paper Corporation 2020
Slide 14: Pulp and Paperboard Sequential Quarter Results
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q1 2021 vs. Q4 2020 Segment Adjusted EBITDA ($ in millions) Favorable mix and higher pricing Weather event, higher input costs and production inefficiencies Page 14 © Clearwater Paper Corporation 2021
Slide 15: Consumer Products Sequential Quarter Results
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q1 2021 vs. Q4 2020 Segment Adjusted EBITDA ($ in millions) Lower SGA Reduced offset by higher demand input costs Page 15 © Clearwater Paper Corporation 2021
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 Pulp and Paperboard Sales ($ millions) $212.1 $235.4 $223.6 $214.3 $223.1 $216.5 $217.2 $220.4 $219.7 Adjusted EBITDA ($ millions) $38.9 $42.9 $28.2 $44.0 $35.5 $41.2 $41.8 $42.8 $34.0 Shipments (short to
Slide 17: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ in millions) Three Months Ended March 31, December 31, 2021 2020 2020 Net income $ 12.1 $ 10.3 $ 22.6 Income tax provision (benefit) 3.2 (6.2) 7.0 Interest expense, net 9.3 12.8 9.5 Depreciation and amortization expense 26.8 28.0 27.5 Other operating charges, net
Slide 18: Reconciliation of Adjusted Income
RECONCILIATION OF ADJUSTED INCOME ($ in millions income, except per share amounts) Quarter Ended March 31, 2021 2020 Net income $ 12.1 $ 10.3 Add back: Income tax provision 3.2 (6.2) Income before income taxes 15.3 4.1 Add back: Other operating charges, net 0.4 8.6 Adjusted net income before tax 15.
Slide 19: Additional Reconciliations
ADDITIONAL RECONCILIATIONS ($ in millions) Reconciliation of Net Debt Mar 31, 2020 June 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Cash $ 60.8 $ 48.2 $ 47.5 $ 35.9 $ 57.1 Current debt 58.1 1.6 1.7 1.7 1.7 Long term debt 883.9 827.9 785.5 716.4 716.3 add: Deferred debt costs 7.7 6.4 8.2 6.9 6.6
Slide 20: Major Maintenance Schedule
MAJOR MAINTENANCE SCHEDULE ($ in millions) $30 $25 - $30 $24 $19 - $23 $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 f
Slide 21: Key Commodity Consumption Volumes
KEY COMMODITY CONSUMPTION VOLUMES Unit of Approximate Annual Volume 1 1 COGS Input Measure (in millions) Purchased Pulp Ton 0.3 Fiber Bone Dry Ton 1.7 Diesel Gallon 10 Electric MWh 1.0 Natural Gas MMBTU 10 Polyethylene Pound 30 Caustic Pound 90 Chlorate Pound 30 1 Approximated annual volume and expe