Clearwater Paper Reports First Quarter 2022 Results
Clearwater Paper Corporation (NYSE:CLW) reported strong Q1 2022 financial results, with net sales of $488 million, up 15% year-over-year. Net income increased to $17 million or $0.97 per diluted share. Adjusted EBITDA rose to $59 million. The Pulp and Paperboard Products segment saw 21% growth in sales, driven by higher pricing, while Consumer Products net sales rose 7%, despite reduced operating income. The company anticipates inflationary pressures to persist, offset by higher prices, and plans to resume its stock repurchase program.
- Net sales increased by 15% to $488 million.
- Net income rose to $17 million, or $0.97 per diluted share.
- Adjusted EBITDA improved to $59 million from $54 million year-over-year.
- Pulp and Paperboard segment net sales grew 21% to $266 million.
- Consumer Products segment net sales increased 7% to $223 million.
- Consumer Products segment operating income fell from $18 million to $1 million.
- Adjusted EBITDA for Consumer Products decreased from $35 million to $16 million.
- Paperboard sales volumes decreased by 3%.
FIRST QUARTER HIGHLIGHTS
- Delivered strong performance due to continued strength in the paperboard business and improvements in tissue
- Higher pricing in both businesses helping to offset inflation
-
Net sales of
$488 million 15% compared to the first quarter of last year
-
Net income of
$17 million $0.97
-
Adjusted EBITDA of
$59 million
-
Reduced net debt by
$31 million
"Our performance in the first quarter exceeded our expectations due to strong operational execution and improved pricing in both businesses,” said
OVERALL RESULTS
For the first quarter of 2022, Clearwater Paper reported net sales of
Pulp and Paperboard Products Segment
Net sales in the Pulp and Paperboard Products segment were
Paperboard Sales Volumes and Prices:
• Paperboard sales volumes were 201,356 tons in the first quarter of 2022, a decrease of
• Paperboard average net selling price increased
Consumer Products Segment
Net sales in the Consumer Products segment were
Retail Tissue Sales Volumes and Prices:
• Retail tissue volumes sold were 75,426 tons in the first quarter of 2022, an increase of
• Retail tissue selling prices increased
COMPANY OUTLOOK
“Our first quarter performance represents a strong start to 2022. Inflationary pressures are expected to persist in 2022, which we are offsetting with higher sales prices that were previously announced and operational improvements. Given our strong performance and improved outlook for the year, we are on track to achieve our leverage ratio sooner than anticipated and are resuming our previously approved stock repurchase program,” concluded Kitch.
WEBCAST INFORMATION
ABOUT CLEARWATER PAPER
Clearwater Paper is a premier supplier of private brand tissue to major retailers, including grocery, club, mass merchants, and discount stores. In addition, the company produces bleached paperboard used by quality-conscious printers and packaging converters, and offers services that include custom sheeting, slitting, and cutting. Clearwater Paper's employees build shareholder value by developing strong relationships through quality and service.
USE OF NON-GAAP MEASURES
In this press release, the company presents certain non-GAAP financial information for the first quarter of 2022 and 2021, including adjusted income and Adjusted EBITDA. Because these amounts are not in accordance with GAAP, reconciliations to net income as determined in accordance with GAAP are included in the tables at the end of this press release. The company presents these non-GAAP amounts because management believes they assist investors and analysts in comparing the company's performance across reporting periods on a consistent basis by excluding items that the company does not believe are indicative of its core operating performance. In addition, the company uses Adjusted EBITDA: (i) as factors in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the effectiveness of the company's business strategies, and (iii) because the company's credit agreement and the indentures governing the company's outstanding notes use metrics similar to Adjusted EBITDA to measure the company's compliance with certain covenants.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding product demand, cash generation, performance improvements, market conditions, debt reduction and share repurchases, performance improvements, market conditions, and mitigation of inflationary pressures. These forward-looking statements are based on current expectations, estimates, assumptions, and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: impact of the COVID-19 pandemic on our operations, our suppliers' operations and our customer demand; competitive pricing pressures for our products, including as a result of increased capacity as additional manufacturing facilities are operated by our competitors and the impact of foreign currency fluctuations on the pricing of products globally; customer acceptance and timing and quantity of purchases of our tissue products, including the existence of sufficient demand for and the quality of tissue produced by our expanded
|
||||||
Consolidated Statements of Operations |
||||||
(Unaudited) |
||||||
|
|
|||||
|
Quarter Ended |
|||||
(In millions, except per-share data) |
|
2022 |
|
|
2021 |
|
Net sales |
$ |
488.2 |
|
$ |
425.9 |
|
Costs and expenses: |
|
|
||||
Cost of sales |
|
422.0 |
|
|
370.6 |
|
Selling, general and administrative expenses |
|
32.8 |
|
|
27.8 |
|
Other operating charges, net |
|
0.5 |
|
|
0.4 |
|
Total operating costs and expenses |
|
455.3 |
|
|
398.8 |
|
Income from operations |
|
32.9 |
|
|
27.1 |
|
Interest expense, net |
|
(8.6 |
) |
|
(9.3 |
) |
Debt retirement costs |
|
(0.2 |
) |
|
— |
|
Other non-operating expense |
|
(1.4 |
) |
|
(2.5 |
) |
Total non-operating expense |
|
(10.3 |
) |
|
(11.8 |
) |
Income before income taxes |
|
22.6 |
|
|
15.3 |
|
Income tax provision |
|
6.0 |
|
|
3.2 |
|
Net income |
$ |
16.6 |
|
$ |
12.1 |
|
|
|
|
||||
Net income per common share: |
|
|
||||
Basic |
$ |
0.99 |
|
$ |
0.73 |
|
Diluted |
|
0.97 |
|
|
0.71 |
|
|
|
|
||||
Average shares outstanding (in thousands): |
|
|
||||
Basic |
|
16,728 |
|
|
16,647 |
|
Diluted |
|
17,073 |
|
|
16,979 |
|
|
||||||
Condensed Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
|
|
|
||||
(In millions) |
|
|
||||
Assets |
|
|
||||
Current assets: |
|
|
||||
Cash and cash equivalents |
$ |
36.4 |
|
$ |
25.2 |
|
Receivables, net |
|
172.3 |
|
|
167.4 |
|
Inventories |
|
281.8 |
|
|
277.7 |
|
Other current assets |
|
17.0 |
|
|
16.9 |
|
Total current assets |
|
507.5 |
|
|
487.2 |
|
Property, plant and equipment |
|
2,963.2 |
|
|
2,961.5 |
|
Accumulated depreciation |
|
(1,903.3 |
) |
|
(1,879.7 |
) |
Property, plant and equipment, net |
|
1,059.9 |
|
|
1,081.8 |
|
Other assets, net |
|
115.7 |
|
|
121.1 |
|
Total Assets |
$ |
1,683.1 |
|
$ |
1,690.1 |
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|
||||
Current liabilities: |
|
|
||||
Current portion of long-term debt |
$ |
1.6 |
|
$ |
1.6 |
|
Accounts payable and accrued liabilities |
|
254.5 |
|
|
252.5 |
|
Total current liabilities |
|
256.1 |
|
|
254.1 |
|
Long-term debt |
|
617.7 |
|
|
637.6 |
|
Liability for pension and other postretirement employee benefits |
|
72.8 |
|
|
73.6 |
|
Deferred tax liabilities and other long-term obligations |
|
206.5 |
|
|
213.1 |
|
Total liabilities |
|
1,153.2 |
|
|
1,178.3 |
|
|
|
|
||||
Stockholders' equity: |
|
|
||||
Common stock |
|
— |
|
|
— |
|
Additional paid-in capital |
|
24.1 |
|
|
23.6 |
|
Retained earnings |
|
547.3 |
|
|
530.7 |
|
Accumulated other comprehensive loss, net of tax |
|
(41.4 |
) |
|
(42.6 |
) |
Total stockholders' equity |
|
530.0 |
|
|
511.7 |
|
Total liabilities and stockholders' equity |
$ |
1,683.1 |
$ |
1,690.1 |
|
|
|
||||||
Consolidated Statements of Cash Flows |
||||||
(Unaudited) |
||||||
|
Quarter Ended |
|||||
(In millions) |
|
2022 |
|
|
2021 |
|
Operating activities |
|
|
||||
Net income |
$ |
16.6 |
|
$ |
12.1 |
|
Adjustments to reconcile net income to net cash flows provided by operating activities: |
|
|
||||
Depreciation and amortization |
|
25.4 |
|
|
26.8 |
|
Equity-based compensation expense |
|
0.7 |
|
|
2.4 |
|
Deferred taxes |
|
(2.2 |
) |
|
(0.4 |
) |
Defined benefit pension and other postretirement employee benefits |
|
0.7 |
|
|
1.7 |
|
Changes in operating assets and liabilities: |
|
|
||||
(Increase) decrease in accounts receivable |
|
(10.6 |
) |
|
25.7 |
|
Increase in inventory |
|
(4.2 |
) |
|
(29.7 |
) |
Increase in other current assets |
|
— |
|
|
(0.2 |
) |
Increase (decrease) in accounts payable and accrued liabilities |
|
13.9 |
|
|
(6.2 |
) |
Other, net |
|
0.7 |
|
|
1.7 |
|
Net cash flows provided by operating activities |
|
41.1 |
|
|
33.8 |
|
Investing activities |
|
|
||||
Additions to property, plant and equipment, net |
|
(7.9 |
) |
|
(11.1 |
) |
Net cash flows used in investing activities |
|
(7.9 |
) |
|
(11.1 |
) |
Financing activities |
|
|
||||
Repayments of long-term debt |
|
(20.4 |
) |
|
(0.4 |
) |
Proceeds from sale of stock under employee awards |
|
(1.5 |
) |
|
(1.6 |
) |
Taxes paid related to net share settlement of equity awards |
|
— |
|
|
0.5 |
|
Net cash flows used in financing activities |
|
(21.9 |
) |
|
(1.4 |
) |
|
|
|
||||
Increase in cash, cash equivalents and restricted cash |
|
11.3 |
|
|
21.2 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
26.2 |
|
|
36.9 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
37.5 |
|
$ |
58.2 |
|
|
||||||
Segment Information |
||||||
(Unaudited) |
||||||
|
|
|||||
|
Quarter Ended |
|||||
(In millions) |
|
2022 |
|
|
2021 |
|
Segment net sales: |
|
|
||||
Pulp and Paperboard |
$ |
266.2 |
|
$ |
219.7 |
|
Consumer Products |
|
223.0 |
|
|
208.4 |
|
Eliminations |
|
(1.1 |
) |
|
(2.2 |
) |
Net sales |
$ |
488.2 |
|
$ |
425.9 |
|
|
|
|
||||
Operating income (loss): |
|
|
||||
Pulp and Paperboard |
$ |
50.3 |
|
$ |
25.0 |
|
Consumer Products |
|
0.9 |
|
|
17.9 |
|
Corporate and eliminations |
|
(17.8 |
) |
|
(15.5 |
) |
Other operating charges, net 1 |
|
(0.5 |
) |
|
(0.4 |
) |
Income from operations |
$ |
32.9 |
|
$ |
27.1 |
|
1 |
Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 8 within Clearwater Paper's Form 10-Q filed with the |
|
||||||
Reconciliation of Non-GAAP Financial Measures |
||||||
Adjusted EBITDA |
||||||
(Unaudited) |
||||||
|
||||||
|
Quarter Ended |
|||||
(In millions) |
|
2022 |
|
|
2021 |
|
Net income |
$ |
16.6 |
|
$ |
12.1 |
|
Add back: |
|
|
||||
Income tax provision |
|
6.0 |
|
|
3.2 |
|
Interest expense, net |
|
8.6 |
|
|
9.3 |
|
Depreciation and amortization |
|
25.4 |
|
|
26.8 |
|
Other operating charges, net1 |
|
0.5 |
|
|
0.4 |
|
Debt retirement costs |
|
0.2 |
|
|
— |
|
Other non-operating expense |
|
1.4 |
|
|
2.5 |
|
Adjusted EBITDA |
$ |
58.9 |
|
$ |
54.3 |
|
|
|
|
||||
Pulp and Paperboard segment income |
$ |
50.3 |
|
$ |
25.0 |
|
Depreciation and amortization |
|
9.3 |
|
|
9.0 |
|
Adjusted EBITDA Pulp and Paperboard |
$ |
59.5 |
|
$ |
34.0 |
|
|
|
|
||||
Consumer Products segment income |
$ |
0.9 |
|
$ |
17.9 |
|
Depreciation and amortization |
|
15.3 |
|
|
16.8 |
|
Adjusted EBITDA Consumer Products |
$ |
16.2 |
|
$ |
34.7 |
|
|
|
|
||||
Corporate and other expenses |
$ |
(17.8 |
) |
$ |
(15.5 |
) |
Depreciation and amortization |
|
0.9 |
|
|
1.1 |
|
Adjusted EBITDA Corporate |
$ |
(16.9 |
) |
$ |
(14.4 |
) |
|
|
|
||||
Pulp and Paperboard segment |
$ |
59.5 |
|
$ |
34.0 |
|
Consumer Products segment |
|
16.2 |
|
|
34.7 |
|
Corporate and other |
|
(16.9 |
) |
|
(14.4 |
) |
Adjusted EBITDA |
$ |
58.9 |
|
$ |
54.3 |
|
1 |
Other operating charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 8 within Clearwater Paper's Form 10-Q filed with the |
|
||||
Reconciliation of Non-GAAP Financial Measures |
||||
(Unaudited) |
||||
|
|
|||
|
Quarter Ended |
|||
(In millions, except per-share data) |
2022 |
2021 |
||
|
|
|
||
Adjusted net income: |
|
|
||
Net income |
$ |
16.6 |
$ |
12.1 |
Add back: |
|
|
||
Income tax provision |
|
6.0 |
|
3.2 |
Income before income taxes |
|
22.6 |
|
15.3 |
|
|
|
||
Add back: |
|
|
||
Debt retirement costs |
|
0.2 |
|
— |
Other operating charges, net |
|
0.5 |
|
0.4 |
Adjusted income before tax |
$ |
23.4 |
$ |
15.7 |
Normalized income tax provision |
|
5.8 |
|
3.9 |
Adjusted net income |
$ |
17.5 |
$ |
11.7 |
|
|
|
||
Weighted average diluted shares (thousands) |
|
17,073 |
|
16,979 |
|
|
|
||
Adjusted income per diluted share |
$ |
1.03 |
$ |
0.69 |
|
|
|
||
|
|
|
||
Calculation of net debt: |
|
|
||
Current portion long-term debt |
$ |
1.6 |
$ |
1.6 |
Long-term debt |
|
617.7 |
|
637.6 |
Add back: |
|
|
||
Unamortized deferred debt costs |
|
4.4 |
|
4.8 |
Less: |
|
|
||
Financing leases |
|
18.7 |
|
19.1 |
Cash and cash equivalents |
|
36.4 |
|
25.2 |
Net debt |
$ |
568.6 |
$ |
599.8 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006058/en/
Investors
Solebury Trout
Phone: 509-344-5906
investorinfo@clearwaterpaper.com
News media
Phone: 509-344-5967
shannon.myers@clearwaterpaper.com
Source:
FAQ
What were Clearwater Paper's Q1 2022 net sales and net income?
How much did Clearwater Paper's adjusted EBITDA increase in Q1 2022?
What factors contributed to Clearwater Paper's performance in Q1 2022?
How did the inflation impact Clearwater Paper's results in Q1 2022?
What is the outlook for Clearwater Paper for the rest of 2022?
