Clearwater Paper Corporation · NYSE:CLW
Clearwater Paper — Q1 2022 Earnings Presentation
20 slides from Clearwater Paper's earnings presentation, Apr 28, 2022
Slide 1: First Quarter Earnings Release Materials
CLEARWATER PAPER CORPORATION FIRST QUARTER EARNINGS RELEASE MATERIALS APRIL 28, 2022 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 order
Slide 3: Q1 2022 Business Highlights
Overall • Net sales $488 million, up 15% compared to prior year • Net income $17 million • Adjusted net income $18 million • Adjusted EBITDA $59 million • Inflation pressures across both businesses Pulp and Paperboard • Continued strong customer demand • SBS prices increased Consumer Products • Stab
Slide 4: Business Update – Pulp and Paperboard
Industry • Order backlogs remain strong • Fastmarkets RISI reported market price increases of $250/ton in 2021 • Fastmarkets RISI reported market price increase of $100/ton in the first quarter of 2022 • Folding carton: January $50/ton; February $30/ton and March $20/ton • Cupstock and food service:
Slide 5: Business Update – Consumer Products
Industry • Consumer buying behavior appears to be affected by inflation • Private brand market share rising, now above 34% Clearwater Paper • Q1 2022 shipments were 12 million cases compared to 11.7 million in Q1 20211, 12.4 million in Q4 2021 • Produced without meaningful market related downtime •
Slide 6: Financial Performance
© Clearwater Paper Corporation 2022 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 Net sales 488.2$ 425.9$ Cost of sales 422.0 370.6 Selling, general and adminstrative 32.8 27.8 Other operating charges, net 0.5 0.4 Income from operations 32.9 27.1 Non-operating expense (10
Slide 7: Segment Profit and Loss and Adjusted EBITDA
© Clearwater Paper Corporation 2022 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 2022 2021 Net Sales Pulp and Paperboard 266.2$ 219.7$ Consumer Products 223.0 208.4 Eliminations (1.1) (2.2) 488.2$ 425.9$ Operating Income Pulp and Paperboard 50.3$ 25.0$ Consumer Products 0.9 17.9 Corpo
Slide 8: Pulp and Paperboard Results Q1 2022 vs. Q1 2021
PULP AND PAPERBOARD RESULTS Q1 2022 VS. Q1 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher pricing Higher input costs including fiber, energy, chemicals and transportation, maintenance outage © Clearwater Paper Corporation 2022 8
Slide 9: Consumer Products Results Q1 2022 vs. Q1 2021
CONSUMER PRODUCTS RESULTS Q1 2022 VS. Q1 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher sales and lower production volumes Higher input costs © Clearwater Paper Corporation 2022 9 Price increases and mix
Slide 10: Capital Structure and Allocation
© Clearwater Paper Corporation 2022 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 to target net debt to Adj
Slide 11: Outlook for Q2 and 2022
OUTLOOK FOR Q2 AND 2022 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2022 Q2 2022: $54 to $64 million of Adjusted EBITDA • Positive impact of previously announced price increases in paperboard and tissue • Volume increases in paperboard • Raw material inflation impacting Adjusted EBITDA by $14
Slide 12: Clearwater Paper Value Proposition
CLEARWATER PAPER VALUE PROPOSITION KEY PRIORITIES FOR VALUE CREATION © Clearwater Paper Corporation 2022 12 Generate free cash flow • Achieve commercial, operational and supply chain improvements across our businesses • Invest to sustain our assets and higher return projects • Demonstrate an attract
Slide 13: Appendix
APPENDIX © Clearwater Paper Corporation 2022 13
Slide 14: Pulp and Paperboard Sequential Quarter Results
PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q1 2022 VS. Q4 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Higher input costs including fiber, chemicals and transportation, major maintenance outages Higher pricing © Clearwater Paper Corporation 2022 14 Lower volume due to timing
Slide 15: Consumer Products Sequential Quarter Results
CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q1 2022 VS. Q4 2021 SEGMENT ADJUSTED EBITDA ($ IN MILLIONS) Improved production, lower sales Lower input costs in pulp, partially offset by higher transportation and energy © Clearwater Paper Corporation 2022 15 Price increase and 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. 1.5 million in 2020 and 0.8 million in 2021. 2. Non-retail includes away-from-home and parent rolls. Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Pulp and Paperboard
Slide 17: Reconciliation of Adjusted EBITDA
RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) December 31, 2022 2021 2021 Net income $ 16.6 $ 12.1 $ 9.6 Income tax provision 6.0 3.2 6.1 Interest expense, net 8.6 9.3 8.9 Depreciation and amortization expense 25.4 26.8 25.4 Other operating charges, net 0.5 0.4 2.6 Other non-operating expense 1.
Slide 18: Reconciliation of Adjusted Income
© Clearwater Paper Corporation 2022 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2022 2021 Net income (loss) 16.6$ 12.1$ Add back: Income tax provision (benefit) 6.0 3.2 Income (loss) before income taxes 22.6 15.3 Add back: Debt retirement costs 0.2 - Other operating c
Slide 19: Additional Reconciliations
ADDITIONAL RECONCILIATIONS Net Debt Dec 31, 2020 Mar 31, 2021 June 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Cash $ 35.9 $ 57.1 $ 60.9 $ 27.8 $ 25.2 $ 36.4 Current debt 1.7 1.7 1.7 1.6 1.6 1.6 Long term debt 716.4 716.3 716.2 676.5 637.6 617.7 add: Deferred debt costs 6.9 6.6 6.4 5.6 4.8 4.4
Slide 20: Major Maintenance Schedule Adjusted EBITDA Impact
MAJOR MAINTENANCE SCHEDULE ADJUSTED EBITDA IMPACT ($ IN MILLIONS) 1. This information is based upon management’s current expectations and estimates, as well as historical averages. The outage for 2023 assumes major maintenance outages at both Cypress Bend, AR, and Lewiston, ID, mills with the Lewist