CLW - Earnings call transcript Q1 2024 | Clearwater Paper Corporation

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Operator

Good afternoon. My name is Briana, and I will be your conference operator today. At this time, I would like to welcome everyone to the Clearwater Paper First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Sloan Bohlen, Investor Relations. Please go ahead.

Sloan Bohlen

Briana. you, Thank thank XXXX and joining Paper's Clearwater Good Conference you Call. Quarter Earnings First afternoon, for

Joining the Senior our filing Chief the after Executive Chief me today's President Officer. XX-Q. first Officer; Kitch, on Financial along were and call quarter today market of Sherri released results close, of Baker, Financial Vice XXXX and Arsen President for are shortly and the with

information, Investor including outlook will page a providing You of find at current the presentation the website posted our supplemental on Relations a of company's slide clearwaterpaper.com.

A of than information the Additionally, in of we supplemental certain comparable in statements. call turn going the providing information forward-looking over will included our reference are we GAAP and me release supplemental non-GAAP be information Arsen. X rereading in slide, the non-GAAP this incorporate information press remarks.With is covering provided afternoon's Rather discussion. on it the to by to the website. to prepared reconciliation into information note Please let this that, Slide our

Arsen Kitch

and Good today. for us joining you thank afternoon,

great saw a release, costs. tissue and input from press driven outstanding quarter of we our business lower the had our you performance by As continued first

$XX adjusted of of of results. end reported We EBITDA of which the strong an times consolidated million the cash reduced a We our of our supplementals also Slide the and quarter. summary million expectations. ratio debt quarter. by end provides and generated X net sales is at net additional our This $XXX our leverage resulted higher flows X.XX million, during $XX in of the at

of adjusted year. the EBITDA by $XX improvement the in than last from quarter year million $XX this to drove its doubling million first business tissue Our more

reflects business quarter Lewiston $XX that significantly EBITDA million our was disrupted event even paperboard at impacted operations the by as customer in and of first me the as of trends in in energy, Pricing reported adjusted quarter Our margin remained a experienced by weather highlights growing as XXXX, and to wood improvement quarter, costs of event business estimate compared saw weather severe favorable XX%, higher order our grants. the a paperboard $XX due businesses the in and entry a XX% stock by with delivered compared you. million market and which $XX we Tissue We input year first an of demand to fiber, few dilution with that paperboard shareholder employee our during for demand as primarily ago, a goal particularly repurchased business. by backlogs. We impacted decreased conditions strong paperboard to share freight. the stock with million Lewiston pricing to pulp, for January.Let us million of a $X offsetting in RISI.Both

facility believe Georgia complete the shortly. manufacturing we the Finally, welcoming the our planned from forward progress significant that to let's is made have Augusta, review regulatory the some acquisition acquisition cleared scaled, team and We're details. to Augusta Graphic hurdles paperboard converters matched Paperboard our that, America. Packaging. provide North needs we've We of and a on building and in of expect high each additional well to diversified Clearwater and paperboard that looking business to With performing, of segments Paper

demand view also that the aligns to customer with versus year. XX.X% is quarter. our The Operating that first in of up XX.X% most with this production the rose behind supplemental begin rates business quarter X inventory our destocking of and has X.X% quarter fourth our quarter Slide us. and now improving shipments the fourth paperboard year Let's of AF&PA versus on materials. up recent the is last XX.X% largely This in data first in

also aligns the pricing RISI reported since drove middle of in experience year. $XXX XXXX. softening our February decrease ton for In a with per total This as ton in a terms of prices per of demand $XX lower last

and flat this compared year mostly first was first to the of of in volume last quarter quarters year. fourth Our the

weather While production customer Lewiston. orders January lost in and backlogs grew, our event negatively impacted volumes the were during by

strong in we QX our in million previously, our to long-term about in and in paperboard due our sites. have XXXX. expect major prospects versus to I other maintenance quarter gradual later As the details prepared provide XXXX business in for $XX well remarks, additional and million additional outlook the conviction Sherri at our in will for for our mentioned outlook as scheduled we QX maintenance demand maintenance costs improvement outage second but roughly Lewiston, additional as planned work maintain $XX

In outage to tubes spent replacing Lewiston, the which capital the million $XX in the be this million which $XX being also a furnace, will we normal lower of boiler in addition work is is completed project approximately being year. recovery

turn provide complete Our to outage great team our Please has preparing a as the on tissue done well to our and me this X servicing a you brief Slide business. job all update extended let customers. as work to continue for with necessary

XX% steady some latest with start according share branded Private trends. Let's Circana broader panel the at to data. market industry held

As conditions. to RISI, private XX% reflects we've inflation. January according February, to economic noted strong and we rose embrace Industry and market utilization in due the which in to uncertainty to around past, consumers brands rates are continuing believe

that industry in believe than to to doubled. tons tons Revenues absorb XXXX, in of the by the adjusted normal demand year-over-year announced X% is performance turn quarter. As XXXX removed XXXX remain between and term.Let's net been forward, we these and which more capacity rates.Looking EBITDA capacity tons and additional our be of and previously, added between more to continue industry grew near XXX,XXX to and tissue mentioned have XXXX will approximately we utilization we high medium driving than positive expect to growth the were conditions XXX,XXX

robust of margin EBITDA was This and at driven quarter adjusted XX% strong lower first demand. in X% to performance, the costs, Our operating was input by compared XXXX. continued

call to cover of these as results. XXXX.With I'll financial levels strong continue over to turn through Sherri operating move we expect to performance our We the that,

Sherri Baker

Arsen. you, Thank

cover for In results diluted share diluted earned Let's share XXXX our summary turning $XX statement to quarter, of in XXXX. we first per and the income The quarter net $X.XX, of per financial first net income net million, $X.XX. of adjusted Slide income and our quarter performance by shows income X. the

Arsen and consolidated strong the our are higher noted, the facility. of quarter at was As well paperboard the our negatively the came by event positioned believe impacted at our for weather in for we XXXX. end that expectations quarter we Idaho headwind, a January Despite results

X. Our corresponding segment Slide on seen can results be

EBITDA previous margins quarter. higher and but at remain around last the Adjusted year the As XX%. below noted, in end stable guidance range, at EBITDA consolidated came adjusted our of slightly our

mix business. segment As prices results, X, the EBITDA input of sequential in produced The lower XXXX. fourth year we It the comparison a the to offset quarter partially can comparison versus million the price year. we volumes impact, On see the between index to bridge negatively and adjusted relatively of pricing the at year-over-year we cost. basis $XX The turn EBITDA adjusted cost. first caused to XX Slide impacted a the due adjusted quarter shows severe first year-over-year pulp of quarter our Slide in of paperboard lower XX%. by impact volume in reflects January. our margin year-over-year weather a for was of On influenced stable for X, and erosion last of We lower business. periods to by which negative this appendix was mechanisms heavily tissue of event EBITDA by saw tied price XXXX of Slide downtime sales of comparison some the a

from benefit prices, prices negatively we higher high margin expect in the costs that of expect lower to input capacity utilization, us quarters. Even upcoming achieved well as but to to maintain pulp levels XXXX. we improvement of continued We in higher as we with pulp much impact

continued structure cash profitability, Turning our Slide efficiency. to capital sheet our strengthen, by to XX, strong on and driven balance

liquidity $XXX $XX debt free by reduced additional stands million. Our In flow million and our cash quarter, an generated million. the net we of currently $XX at

$X our authorization. left plans, about stock offset million We $X of our under also in repurchased dilution stock with million employee approximately to

please turn outlook second XX. our to Lastly, on the quarter Slide for

As pricing in to strong Arsen as our by the decrease see mentioned, paperboard see we demand Paperboard impacted RISI. in demand starting be to by recovery are will tissue. reported and continue

volume reminder, a of to tied to price XX% XX% paperboard movement our is in As the index. RISI

from prices our pulp We higher tissue impacting expecting headwinds some are business. also

facility are million planned as in maintenance projecting by Lewiston additional expenses as well to outage sites. planned We $XX an $XX in maintenance additional driven other million at the our majority at maintenance primarily higher the quarter,

to range second million weather the to related those QX. quarter expect $XX adjusted some from We expect the we also million. With insurance event $XX to recovery of all EBITDA for the realize variables, in severe

operational assumptions key our same. For largely the year full remain the

cost higher in and pricing. in We tissue, maintenance major stability expect lower in improvements paperboard input offsets expenses volumes, lower with

$XX same facilities. detailed Augusta Our cash million from found repair XX our Please on projects flow with at list that of not capital paperboard million our include any maintenance Page major do these of the planned expense these driven supplementals. assumptions of and note by can The be to the also acquisition. largely assumptions impact remain $XXX assumptions

the acquiring adjusted of stated, in book previously Packaging EBITDA from delivered business that are we of million approximately we $XXX As XXXX. Graphic

operating into run facility. increasing rate rates that offsets expect carrying improved with lower pricing and be the XXXX, by impacted in We to volumes at

quarters commentary part as financial over now as performance begin the additional We expect about back call the upcoming we Arsen. provide turn to operate Paper to of site in of Clearwater Augusta network.Let me the the to

Arsen Kitch

we welcoming of quarter market team also recovery prospects optimistic continued strength and Thanks first pleased as and completing Sherri. the with to in our year forward I'm acquisition about I'm signs tissue. in performance remain see Augusta our Clearwater paperboard to Augusta the looking for full Paper. conditions the and

As our our that customers. execute of as big and Clearwater continue assets we The to diversified long-term a needs strategy. is our strategic to intend scaled acquisition call, step last at a on to meets build Paper we our objective paperboard and I is for other opportunistically paper look converter the Augusta mentioned business

our also of to in the to evaluate continue feasibility offering. We existing investing assets will our broaden product

opportunities at our While from is flows, the look cash acquisition, our long balance sheet. value focus generating additional Augusta near-term and run, on capturing the we in deleveraging

expect our cross-cycle target the of a of record back and to be times deleveraging X.X have XXXX. of end We to track by proven

like XXXX. And quarter. weather also questions. would that, thank and as our a We remarks continued their by at us.With for support in wrap very quarter, your caused Lewiston by a and managed Let people to prepared start even me take we we facility placing our delivered conditions difficult always, trust as strong shareholders our our the will customers during operating end and through strong event I some thanking the to their for for

Operator

go ahead. Please question [Operator Instructions] first comes with McKellar you. RBC Markets. Your Matthew Thank from Capital

Matthew McKellar

to start I'd us asking of to questions provide how I expect the maintenance thanks. to event the And be of with you any Lewiston? we sense quarters. at coming CapEx know your a on recovery couple then of that rate Augusta like should sort would guidance. a you degree at trend partial for spoke information That just the basis? idea But a insurance you'd you could around quantify give more to can helpful, run also

Arsen Kitch

Sherri question take Let insurance question. then and me start with the Augusta the will

So, at and and we of are a in financials. into idea closing fits shortly forward this get here we have to Clearwater once point how much these there, the better very we'll looking

more But So, I of guidance balance of to kind any in think us it's for premature provide Augusta. year be the little for upcoming we'll quarters. providing around information a

Sherri Baker

we of some we of $X $XX do that to saw have see So is a full second million in to the was Matt, quarter. that claim. partial the impact expect $XX amount QX, that the recovery the and in We million, full deductible the million

So do that flow with process but see is carrier, the some within insurance the still expect to second ongoing quarter. funds we

Matthew McKellar

like next prices, we like-for-like bit to some over slipped as compression you looked that basis? all a mix shifting to trend, seem It taking well? on you I go if issue price or given Can at quarter-over-quarter. And rising Maybe just rates prices a was tissue pricing clarify a whether that some pricing. that could pulp here then operating support maybe which pretty you solid are forward have expecting and guess, saw how

Arsen Kitch

are But it's of a that going year. in that's volume sequential, tied pricing. partially We'll last drop RISI slight commenting prices quarter pulp pulp to contract, around we future on a of I way saw, know were it's largely index. just just the that of our down but is coming about really measured, through prices terms most under avoid up, pulp the

is seeing bulk that. I we're that of price So, decrease think related the that to

to up chalked the mix can rest think I some issues. be

I think saw EBITDA tissue in you our rates I operating results. market and really conditions that remain are high. quarterly We're strong, think utilization well

Matthew McKellar

is to fair prices, lag out to debt be rising of it as can in just flows acquisition? with is that results? there think it following us you terms given remind three-month of to peak X.X leverage about X May Augusta then still think that your times sticking through pulp a being to still you're the expecting that trend, And fair your to how

Arsen Kitch

-- good inventory. Yes, of I is process is just a kind the days through give months three way manufacturing moves pulp XX think thumb our or rule and take

if on have they have just sequentially just, just average increased So, look at they XXXX. And at to you I the now indices in they if quarter-over-quarter. look prices, pulp where were arrived think you

XXXX. through So, Pulp some interesting were falling trends. there are timing prices

then in up quarter. in slowly their bottom they greater they and obviously think first I and started impact a range that here QX back time creeping the hit somewhere

at versus you in Matthew, in closures look have hardwood, know a this, been number softwood you North If of America. softwood there

that's think capacity. I up tightening

in run, eucalyptus long think quarters, a at I especially as they hardwood, comes if prices and there couple pulp the forecasts capacity you that out next online at globally. indicate are look the of hardwood beyond the look lower you

Sherri Baker

expectation your is times. that then leverage And is that and That on still Matt, X.X a correct. second X between be the would there piece, still peak

Matthew McKellar

any cost be would Lewiston? past a just to procurement lumber wanted .May you your closures the residuals that's to fiber few expect but on over generally. cost for one months your Montana We've in here. your probably of seen Do outside confirm. I mill expect few softwood of radius, more impact

Arsen Kitch

tip I those I the at don't generally think numbers But fingers. have of my right. speaking, you're

where residual lumber rates at So, operating and are Southeast a it's the in to market. beneficial the market the log largely a whole Northwest in it's higher us mills

company, in some But the the of year the last in the across don't versus I wood we've total impact that So, year I year. around closures of positive specific information of net half overall, the some especially have expect versus this half expect of to last a be we first this first just seen. of think year, we

and we expect be wood So a good guy. to that's across Arkansas for Idaho,

Matthew McKellar

a may maybe and just any talk start by little is be on you're May . focusing strength seeing that in better end you Can market to might sounds you it of about market market that what weakness the there. bit, up firming and like pockets you be seeing be it paperboard and QX seeing? trends call

Arsen Kitch

specific No comments on end markets.

utilization recovery I versus think AF&PA up and happening were saw rates QX we're you data seeing the Shipments in a nice up. were in QX.

this that, have have a production. do run outage some to which the We is our So, those running impact be the we here will the full outside year. But of expecting major XXXX. for outlooks on We're point, full where trends seeing from and have year. of this at year of same the positive customers for of to expectation we're our remainder for sit balance balance

Matthew McKellar

wrong. agreement and about hourly general I July. . one collective me think expire Bend far for would and what from tone you've at me sort event so Cypress correct environment been I'm a if bargaining given that maybe your having in and But just last we And inflationary of expect, of for you should Can please labor? talk maybe discussions employees

Arsen Kitch

expectations. stay commenting I'll think away on I from

very to I have unions, had as a good we relationship and I have Arkansas. speaking, we're dialogue historically think we looking think in forward generally our constructive with good

Matthew McKellar

from all turn back. Thanks. That's I'll it . me.

Operator

conference call. for all will no participation. your questions time, further this this Thank conclude Seeing at today's you

Clearwater Paper (CLW) 29 Apr 242024 Q1 Earnings call transcript