Clearwater Paper Reports Fourth Quarter and Year End 2021 Results

Clearwater Paper Corporation (“Clearwater Paper”), a premier supplier of quality consumer tissue and bleached paperboard today reported financial results for the fourth quarter and year ended December 31, 2021.

2021 Fourth Quarter Highlights

• Delivered solid performance due to continued strength in the paperboard business
• Managed through increased COVID related absences, supply chain disruptions and weather impacts
• Achieved net income of $10 million, or $0.56 per diluted share and Adjusted EBITDA of $56 million
• Net sales of $490 million, up 8% compared to the fourth quarter of 2020
• Net debt reduction of $37 million

2021 Full Year Highlights

• Delivered strong performance due to robust demand for paperboard products and solid operational execution
• Net loss of $28 million, which includes an after-tax loss of $38 million associated with the closure of Neenah, Wisconsin tissue facility
• Adjusted EBITDA of $175 million
• Net sales of $1.8 billion
• Net debt reduction of $69 million

“Our performance was at the high end of our expectations with strong paperboard sales and greater stability in tissue demand,” said Arsen Kitch, president and chief executive officer. “Our paperboard business reported strong Adjusted EBITDA with increased pricing and sales volume. Tissue demand stabilized, and we are implementing previously announced price increases. Our continued focus on operating efficiencies, combined with higher pricing, is helping offset some of the significant cost inflation that we are experiencing in both of our businesses.”

Overall Results

For the fourth quarter of 2021, Clearwater Paper reported net sales of $490 million, an 8% increase compared to net sales of $453 million reported in the fourth quarter of 2020. Net income for the fourth quarter of 2021 was $10 million, or $0.56 per diluted share, compared to net income in the fourth quarter of 2020 of $23 million, or $1.34 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income in the fourth quarter of 2021 of $14 million, or $0.82 per diluted share, compared to fourth quarter 2020 adjusted net income of $25 million, or $1.45 per diluted share. Adjusted EBITDA for the quarter was $56 million compared to the fourth quarter of 2020 Adjusted EBITDA of $72 million.

For the full year 2021, Clearwater Paper reported net sales of $1.8 billion, a 5% decrease compared to net sales of $1.9 billion for 2020. Net loss for the full year was $28 million in 2021, or $1.67 per diluted share, compared to a net income for 2020 of $77 million or $4.61 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income for 2021 of $17 million, or $1.03 per diluted share, compared to 2020 adjusted net income of $89 million, or $5.30 per diluted share. Adjusted EBITDA for 2021 was $175 million, compared to 2020 Adjusted EBITDA of $283 million.

Pulp and Paperboard Segment

Net sales in the Pulp and Paperboard segment were $261 million for the fourth quarter of 2021, up 19% compared to fourth quarter 2020 net sales of $220 million. Segment operating income for the fourth quarter of 2021 was $53 million compared to $34 million for the fourth quarter of 2020. Adjusted EBITDA for the segment was $62 million in the fourth quarter of 2021, compared to $43 million in the fourth quarter of 2020. The increase in operating income and Adjusted EBITDA was driven by higher sales prices which were partially offset by inflation.

Net sales in the Pulp and Paperboard segment were $946 million for 2021, an increase of 8% compared to 2020 net sales of $877 million. Segment operating income for 2021 was $126 million compared to $125 million for 2020. Adjusted EBITDA for the segment was $161 million for 2021, compared to $161 million for 2020. The operating income and Adjusted EBITDA for the year was essentially flat as the higher sales prices were offset by higher maintenance outage costs and inflation.

Pulp and Paperboard Sales Volumes and Prices:

• Paperboard sales volumes were 211,503 tons in the fourth quarter of 2021, an increase of 3% compared to 206,232 tons in the fourth quarter of 2020. Paperboard sales volumes were 822,206 tons for the year ended 2021 which were relatively flat with 821,138 tons for the year ended 2020.
• Paperboard average net selling price increased 16% to $1,164 per ton for the fourth quarter of 2021, compared to $1,002 per ton in the fourth quarter of 2020. Paperboard average net selling price increased 8% to $1,088 per ton for the year ended 2021, compared to $1,008 per ton for the year ended 2020.

Consumer Products Segment

Net sales in the Consumer Products segment were $232 million for the fourth quarter of 2021, down 3% compared to the fourth quarter 2020 net sales of $239 million. In the fourth quarter of 2021, retail converted case shipments were 12.4 million cases, a decrease of 8% compared to the 13.5 million cases shipped in the fourth quarter of 2020. Segment operating loss for the fourth quarter of 2021 was $8 million compared to operating income of $28 million in the fourth quarter of 2020. Adjusted EBITDA for the segment was $8 million in the fourth quarter of 2021, down from $45 million in the fourth quarter of 2020. The decrease in operating income and Adjusted EBITDA was driven by lower sales volumes and higher input costs, primarily pulp and transportation.

Net sales in the Consumer Products segment were $835 million for the full year 2021, down 18% compared to 2020 net sales of $1,018 million. For 2021, retail converted case shipments were 46 million cases, a decrease of 21% compared to 58 million cases shipped for 2020. Segment operating income for 2021 was $4 million, compared to operating income of $111 million for 2020. Adjusted EBITDA for the segment was $69 million for 2021, down from $179 million for 2020. The decrease in operating income and Adjusted EBITDA was driven by lower sales volumes and higher input costs, primarily pulp and transportation.

Retail Tissue Sales Volumes and Prices:

• Retail tissue volumes sold were 79,491 tons in the fourth quarter of 2021, a decrease of 5% compared to 83,347 tons in the fourth quarter of 2020. Retail tissue volumes sold were 287,987 tons for the year ended of 2021, a decrease of 19% compared to 355,862 tons for 2020.
• Retail tissue average net selling prices increased 3% to $2,831 per ton in the fourth quarter of 2021, compared to $2,745 per ton in the fourth quarter of 2020. Retail tissue average net selling prices increased 1% to $2,771 per ton for 2021, compared to $2,742 per ton for 2020.

Company Outlook

“I am pleased with our achievements in 2021 as we performed well despite unpredictable tissue demand and a significant increase in inflation. For 2022, we are expecting continued strength in our paperboard markets, with tissue demand normalizing. While we are facing significant inflation and other supply chain disruptions, we believe that we are well positioned operationally and financially to continue to execute well into the first quarter and the rest of 2022,” concluded Kitch.

For the full fourth quarter results, click here.

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.

Contact:

Shannon Myers – News Media – (509) 344-5967

Source: Clearwater Paper Corporation