Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q2 2018 Earnings Presentation
25 slides from Clearwater Paper's earnings presentation, Aug 1, 2018
Slide 1: Clearwater Paper Corporation Second Quarter 2018 Supplemental Information
CLEARWATER PAPER CORPORATION SECOND QUARTER 2018 SUPPLEMENTAL INFORMATION 08/01/18 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 costs, timing and benefits assoc
Slide 3: Second Quarter Financial Highlights
SECOND QUARTER FINANCIAL HIGHLIGHTS $432 MILLION NET SALES, DOWN 1% VS. Q1'18 $18 MILLION GAAP OPERATING INCOME $43 MILLION ADJUSTED EBITDA1, AT HIGH END OF OUTLOOK RANGE OF $35 TO $45 MILLION DILUTED GAAP EPS OF $0.42 AND ADJUSTED DILUTED EPS OF $0.431 AN INCREMENTAL $4 MILLION CONTRIBUTION TO COST
Slide 4: Financial Summary (GAAP Basis)
FINANCIAL SUMMARY (GAAP BASIS) (UNAUDITED) (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Net sales $437,525 $429,663 $426,504 $436,716 $436,952 $432,099 Gross Profit $50,465 $48,602 $39,742 $61,258 $44,519 $44,945 Selling, general and administrative expenses (
Slide 5: 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 Outlook7 Net sales $437,525 $429,663 $426,504 $436,716 $436,952 $432,099 0% - 1% Higher Adjusted gross profit1 $56,668 $49,820 $41,048 $61,675 $44,712 $45,768 Ad
Slide 6: Q2'18 vs. Q1'18 Consolidated Adjusted EBITDA Bridge
Q2’18 VS. Q1’18 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE ADJ, EBITDA1 (MILLIONS) $46 Unfavorable mix shift from converted cases to PRICE/MIX parent rolls, offset by higher paperboard pricing $44 Record paperboard shipments, partially offset by $0.4 $42.6 VOLUME lower tissue converted case shipments as w
Slide 7: Q2'18 vs. Q2'17 Consolidated Adjusted EBITDA Bridge
Q2’18 VS. Q2’17 CONSOLIDATED ADJUSTED EBITDA1 BRIDGE ADJ, EBITDA1 (MILLIONS) $50 Lower pricing and product mix in tissue, partially PRICE/MIX offset by paperboard price increases $45.0 $45 $4.1 Record paperboard shipments, partially offset by VOLUME lower tissue converted case shipments $2.4 $42.6 $
Slide 8: 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 FINANCIAL MODEL Shipments Retail (short tons) 78,686 77,714 77,544 75,123 80,971 73,070 Non-Retail (short tons)1 16,678 13,736 12,958 12,190 11,236 17,316 Total Tissue Tons 95,364 91
Slide 9: Clearwater Paper Tissue Shipments and U.S. Retail Tissue Market
CLEARWATER PAPER TISSUE SHIPMENTS AND U.S. RETAIL TISSUE MARKET CLW Q2'18 by CLW Q1'18 by Market Segment Market Segment (% of Tons) (% of Tons) U.S. Retail1 Tissue Market Q2'18 ($) Other Parent (MultiOutlet) Parent Rolls Rolls 1% AFH 6% 13% 6% PRIVATE CATEGORY LABEL BRANDS TOTAL AFH 6% Total Retail
Slide 10: Q2'18 vs. Q1'18 Consumer Products Adjusted EBITDA Bridge
Q2'18 VS. Q1'18 CONSUMER PRODUCTS ADJUSTED EBITDA1 BRIDGE SEGMENT ADJ. EBITDA1 (MILLIONS) $20 Weaker mix of converted case versus parent roll PRICE/MIX shipments as we work to recover converted case business $18 $17.4 VOLUME Lower converted case shipments $16 Price increases offset by pulp cost miti
Slide 11: Key Segment Results – Pulp and Paperboard
KEY SEGMENT RESULTS – PULP AND PAPERBOARD (UNAUDITED) PULP AND PAPERBOARD CROSS-CYCLE Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 FINANCIAL MODEL Shipments Paperboard (short tons) 210,382 207,152 200,569 210,098 206,309 216,582 Sales Price Paperboard ($/short ton) $927 $955 $965 $962 $960 $972 Segment net s
Slide 12: Clearwater Paper Paperboard Shipments and U.S. Paperboard Market
CLEARWATER PAPER PAPERBOARD SHIPMENTS AND U.S. PAPERBOARD MARKET CLW Q2'18 by CLW Q1'18 by Market Segment Market Segment U.S. Paperboard Production Q2'183 (% of Tons) (% of Tons) CLEARWATER CATEGORY PAPER OTHER Folding 59% Folding Total Domestic 14% 86% 53% SBS1 Market Share Folding 19% 81% Food Ser
Slide 13: Q2'18 vs. Q1'18 Pulp and Paperboard Adjusted EBITDA Bridge
Q2’18 vs. Q1'18 PULP AND PAPERBOARD ADJUSTED EBITDA1 BRIDGE SEGMENT ADJ. EBITDA1 (MILLIONS) $50 PRICE/MIX Realization of announced price increase $45 $6.0 Record paperboard shipments due to record $0.1 $0.2 $43.6 VOLUME production and strong demand $2.2 Higher fiber costs at our Idaho facility due t
Slide 14: Clearwater Paper Cross-Cycle Financial Model
CLEARWATER PAPER CROSS-CYCLE FINANCIAL MODEL CLEARWATER PAPER CROSS-CYCLE (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 FINANCIAL MODEL Net sales 100% 100% 100% 100% 100% 100% 100% Adjusted gross profit margin1 13.0% 11.7% 9.7% 14.2% 10.2% 10.6% 17.0% Adjusted SG&A expenses1 as % of net
Slide 15: Q3'18 Outlook Reconciliation of Non-GAAP Financial Measures
Q3’18 OUTLOOK1 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) OUTLOOK THREE MONTHS ENDING SEPTEMBER 30, 2018 RANGE OF ESTIMATE (Dollars in thousands) FROM TO Earnings before interest, income taxes, and depreciation & amortization (EBITDA)2: GAAP net earnings $5,100 $7,900 Interest expense
Slide 16: Q3'18 Outlook Reconciliation of Non-GAAP Financial Measures
Q3’18 OUTLOOK1 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) OUTLOOK THREE MONTHS ENDING SEPTEMBER 30, 2018 RANGE OF ESTIMATE (Dollars in thousands) FROM TO GAAP Operating Income $9,000 $25,500 Directors' equity-based compensation expense 300 300 Reorganization expenses associated with S
Slide 17: Q3'18 Outlook
Q3'18 OUTLOOK1 NET SALES 0% - 1% Higher ADJUSTED OPERATING MARGIN2,3 3% - 5% ADJUSTED EBITDA2 $40M - $46M ADJUSTED NET EARNINGS PER DILUTED COMMON SHARE2,4 $0.39 - $0.56 1 This information is based upon management’s current expectations and estimates, which are in part based on market and industry d
Slide 18: Appendix
AG sisegoorss APPENDIX
Slide 19: Adjusted Gross Profit & Adjusted SG&A Reconciliation of Non-GAAP
ADJUSTED GROSS PROFIT & ADJUSTED SG&A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Gross profit1,2 $50,465 $48,602 $39,742 $61,258 $44,519 $44,945 Costs associated with Long Island facility closure 466 661 610 298 — — Costs asso
Slide 20: Segment Adjusted Operating Income (Loss) Reconciliation of Non-GAAP
SEGMENT ADJUSTED OPERATING INCOME (LOSS) RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Consumer Products Operating income1 $6,204 $10,698 $4,525 $7,546 $1,629 ($3,604) Costs associated with Long Island facility closure 466 661 61
Slide 21: Adjusted Net Earnings & Adjusted EPS Reconciliation of Non-GAAP
ADJUSTED NET EARNINGS & ADJUSTED NET EARNINGS PER DILUTED COMMON SHARE RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands - except per-share amounts) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 GAAP net earnings $7,515 $8,037 $863 $80,924 $2,600 $6,961 Adjustments, after tax1: D
Slide 22: Adjusted Income Tax Provision Reconciliation of Non-GAAP
ADJUSTED INCOME TAX PROVISION RECONCILIATION OF NON-GAAP FINANCIAL MEASURE (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 GAAP income tax (provision) benefit ($5,000) ($3,955) $3,095 $62,245 $360 ($2,510) Adjustments, tax impact: Directors' equity-based compensation benefit (
Slide 23: EBITDA & Adjusted EBITDA Reconciliation of Non-GAAP
EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Earnings before interest, income taxes, and depreciation & amortization (EBITDA)1 GAAP net earnings $7,515 $8,037 $863 $80,924 $2,600 $6,961 Interest expense,
Slide 24: Segment EBITDA & Adjusted EBITDA Reconciliation of Non-GAAP
SEGMENT EBITDA & ADJUSTED EBITDA RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) (Dollars in thousands) Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Consumer Products Operating income1 $6,204 $10,698 $4,525 $7,546 $1,629 ($3,604) Depreciation and amortization expense 18,242 16,292 16,073 14,400 14,
Slide 25: For More Information: www.clearwaterpaper.com
FOR MORE INFORMATION: WWW.CLEARWATERPAPER.COM 25