Clearwater Paper Reports First Quarter 2018 Results

Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the first quarter of 2018.

The company reported net sales of $437.0 million for the first quarter of 2018, essentially flat with net sales of $437.5 million for the first quarter of 2017. Net earnings determined in accordance with generally accepted accounting principles, or GAAP, for the first quarter of 2018 were $2.6 million, or $0.16 per diluted share, compared to net earnings for the first quarter of 2017 of $7.5 million, or $0.45 per diluted share. The decrease in net earnings was due primarily to challenging industry-wide economic conditions, which include lower non-ultra grade tissue pricing and higher input costs for transportation, wood fiber, external pulp and chemicals. In addition, shipment volumes were lower and the company incurred reorganization related expenses associated with its selling, general and administrative cost reduction efforts. Those items were partially offset by higher paperboard pricing, operating productivity improvements, improved product mix for both businesses, and a lower tax rate. Excluding certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, first quarter 2018 adjusted net earnings were $5.2 million, or $0.31 per diluted share, compared to first quarter 2017 adjusted net earnings of $10.7 million, or $0.64 per diluted share.

Earnings before interest, taxes, depreciation and amortization, or EBITDA, were $35.4 million for the first quarter of 2018, compared to $48.1 million for the first quarter of 2017. Adjusted EBITDA for the quarter was $39.8 million, down 19.3% compared to first quarter 2017 Adjusted EBITDA of $49.3 million.

“The first quarter showed solid demand for our consumer tissue and paperboard products. This demand was offset by continued competitive pressures especially in conventional grades of retail tissue and higher input costs for both businesses,” said Linda K. Massman, president and chief executive officer. “We will continue to enhance our leading position in at-home private label tissue and SBS paperboard while continuing to aggressively improve our cost position and efficiencies to generate strong cash flow and improved Return On Invested Capital.”

Consumer Products
Net sales in the Consumer Products segment were $238.8 million for the first quarter of 2018, down 1.5% compared to first quarter 2017 net sales of $242.4 million. This decrease was due primarily to lower shipment volumes of parent rolls and away-from-home tissue, partially offset by a 2.9% increase in retail tissue volumes.

Operating income and margin for the first quarter of 2018 decreased to $1.6 million and 0.7%, compared to $6.2 million and 2.6%, respectively, in the first quarter of 2017. After adjusting for certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, adjusted operating income and margin of $3.1 million and 1.3% for the first quarter of 2018 were down from $12.4 million and 5.1% for the same period in 2017. Adjusted EBITDA for the segment decreased from $27.0 million in the first quarter of 2017 to $17.4 million in the first quarter of 2018. These decreases were primarily due to higher input costs for transportation and external pulp.

Tissue Sales Volumes and Prices:
• Total tissue volumes sold were 92,207 tons in the first quarter of 2018, a decrease of 3.3% compared to 95,364 tons in the first quarter of 2017. Converted product cases shipped were 13.3 million in the first quarter of 2018, 1.1% higher than 13.1 million cases shipped in the first quarter of 2017.
• Average tissue net selling prices increased 1.1% or $29 per ton to $2,568 per ton in the first quarter of 2018, compared to $2,539 per ton in the first quarter of 2017, due to improved product mix.

Pulp and Paperboard
Net sales in the Pulp and Paperboard segment were $198.1 million for the first quarter of 2018, up 1.5% compared to first quarter 2017 net sales of $195.1 million. The increase was primarily due to higher paperboard prices.

Operating income for the first quarter of 2018 decreased $1.0 million to $26.2 million, compared to operating income of $27.2 million for the first quarter of 2017. Pulp and paperboard’s operating margin decreased to 13.2% in the first quarter of 2018 from 13.9% in the first quarter of 2017. These decreases were primarily due to higher input costs for chemicals and wood fiber, as well as higher planned maintenance at the Arkansas mill and increased depreciation expense, partially offset by increased net sales. After adjusting for the increased depreciation expense and certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, Adjusted EBITDA for the segment was $35.9 million in the first quarter of 2018, compared to $35.3 million in the first quarter of 2017.

Paperboard Sales Volumes and Prices:
• Paperboard sales volumes were 206,309 tons in the first quarter of 2018, compared to 210,382 tons in the first quarter of 2017.
• Paperboard net selling prices increased 3.6% to $960 per ton for the first quarter 2018, compared to $927 per ton in the first quarter of 2017.
more detail at:  http://ir.clearwaterpaper.com/news-releases/news-release-details/clearwater-paper-reports-first-quarter-2018-results-0

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