Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q3 2021 Earnings Presentation
20 slides from Clearwater Paper's earnings presentation, Nov 2, 2021
Slide 1: Third Quarter Earnings Release Materials
CLEARWATER PAPER CORPORATION THIRD QUARTER EARNINGS RELEASE MATERIALS NOVEMBER 2, 2021 ARSEN S. KITCH President, Chief Executive Officer And Director MICHAEL J. MURPHY Senior Vice President And Chief Financial Officer
Slide 2: Cautionary Statement Regarding 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 statements regarding the i
Slide 3: Q3 2021 Business Highlights
Overall • Net income $2 million • Adjusted net income $9 million • Adjusted EBITDA $50 million Pulp and Paperboard • Continued strong customer demand • SBS prices increased • Successfully completed major maintenance outage at Cypress Bend, Arkansas mill Consumer Products • Demand recovering after in
Slide 4: Business Update – Pulp and Paperboard Pricing Driving Overall Strong Results
Industry • Order backlogs remain strong • Fastmarkets RISI reported market price increases of $200/ton through Q3’21 • Folding carton: Q1’21 $20/ton, Q2’21 $100/ton and Q3’21 $80/ton • Cup stock and food service: Q2’21 $100/ton and Q3’21 $100/ton • Fastmarkets RISI recognized an additional market pr
Slide 5: Business Update – Consumer Products
Industry • COVID has led to demand and inventory distortions in 2020 and 2021 • Total category in North America ~10 million tons demand • ~1 to 2% annual growth, slightly greater than population growth • ~2/3 at home, ~1/3 away from home • At home: ~6 to 7 million ton demand with ~2/3 branded and ~1
Slide 6: Financial Performance
© Clearwater Paper Corporation 2021 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 1. Includes impairment and other costs associated with the Neenah, Wisconsin facility closure and other items. Refer to Clearwater Paper 10-Q filed with the SEC on November 2, 2021 for further details
Slide 7: Segment Profit and Loss and Adjusted EBITDA
© Clearwater Paper Corporation 2021 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 1. Includes impairment and other costs associated with Neenah, Wisconsin and other items. Refer to Clearwater Paper 10-Q filed with the SEC on November 2, 2021, for further details. 2021 2020 2021 2020 Ne
Slide 8: Pulp and Paperboard Results Q3 2021 vs. Q3 2020
PULP AND PAPERBOARD RESULTS Q3 2021 VS. Q3 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher pricing with favorable mix Input and major outage costs © Clearwater Paper Corporation 2021 8
Slide 9: Consumer Products Results Q3 2021 vs. Q3 2020
CONSUMER PRODUCTS RESULTS Q3 2021 VS. Q3 2020 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Lower sales and production volumes Higher input costs partially offset by reduced SG&A © Clearwater Paper Corporation 2021 9 Less favorable mix
Slide 10: Capital Structure and Allocation
© Clearwater Paper Corporation 2021 CAPITAL STRUCTURE AND ALLOCATION Capital structure: supportive and stable • Ample liquidity • No material near-term debt maturities • Corporate/Issuer ratings: Ba2/BB- Capital allocation objectives: • Utilize free cash flow to reduce debt • Target net debt to Adju
Slide 11: Outlook for 2021 - Assumptions
OUTLOOK FOR 2021 - ASSUMPTIONS © Clearwater Paper Corporation 2021 Q4 2021 Operational: $48 to $56 million of Adjusted EBITDA • Positive impact of previously announced price increases in paperboard • Raw material inflation impacting EBITDA sequentially by $7 to $12 million relative to Q3 2021 • No m
Slide 12: Pulp and Paperboard, Consumer Products and Near-term Strategy
Pulp and Paperboard • Diversified range of end-market products, well-invested national footprint • Focused on non-integrated customers with strong service and quality commitment • Well positioned for trends towards sustainable packaging and food service products Consumer Products • Leading private-b
Slide 13: Appendix
APPENDIX © Clearwater Paper Corporation 2021 13
Slide 14: Pulp and Paperboard Sequential Quarter Results Q3 2021 vs. Q2 2021
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q3 2021 VS. Q2 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) 1. Estimated net cost difference of $17 million, Q2 outage of $22 million net of Q3 outage of $5 million Lower major maintenance offset by higher input costs1 Favorable mix and higher pricing ©
Slide 15: Consumer Products Sequential Quarter Results Q3 2021 vs. Q2 2021
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q3 2021 VS. Q2 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Improved demand Higher input costs partially offset by lower SG&A and benefits from Neenah consolidation © Clearwater Paper Corporation 2021 15 Change in mix
Slide 16: Key Segment Information
KEY SEGMENT INFORMATION 1. Includes both retail and away-from-home (AFH) cases. AFH was exited in Q3, 2021. AFH cases totaled 2.0 million in 2019 and 1.5 million in 2020. 2. Non-retail includes away-from-home and parent rolls. Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q
Slide 17: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) June 30, 2021 2020 2021 2021 2020 Net income (loss) $ 1.9 $ 21.4 $ (51.6) $ (37.6) $ 54.5 Income tax provision (benefit) (0.3) 9.9 (16.7) (13.8) 14.1 Interest expense, net 8.9 12.2 9.3 27.5 37.0 Depreciation and amortization expense 25.9 27.7 26.9 79
Slide 18: Reconciliation of Adjusted Income
© Clearwater Paper Corporation 2021 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2021 2020 2021 2020 Net income (loss) 1.9$ 21.4$ (37.6)$ 54.5$ Add back: Income tax provision (benefit) (0.3) 9.9 (13.8) 14.1 Income (loss) before income taxes 1.7 31.3 (51.4) 68.7 Add bac
Slide 19: Additional Reconciliations
ADDITIONAL RECONCILIATIONS Net Debt Mar 31, 2020 June 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 June 30, 2021 Sept 30, 2021 Cash $ 60.8 $ 48.2 $ 47.5 $ 35.9 $ 57.1 $ 60.9 $ 27.8 Current debt 58.1 1.6 1.7 1.7 1.7 1.7 1.6 Long term debt 883.9 827.9 785.5 716.4 716.3 716.2 676.5 add: Deferred de
Slide 20: Major Maintenance Schedule
MAJOR MAINTENANCE SCHEDULE ($ IN MILLIONS) 1. This information is based upon management’s current expectations and estimates, as well as historical averages. Many factors are outside the control of management, and actual results may differ materially from the information set forth above. See “Forwar