Clearwater Paper 4Q 2020 Results: Sales up 4 Percent to $452.8 Million

Clearwater Paper Corporation, a premier supplier of quality consumer tissue and bleached paperboard today reported financial results for the fourth quarter and year ended December 31, 2020.Clearwater Paper Corporation, a premier supplier of quality consumer tissue and bleached paperboard today reported financial results for the fourth quarter and year ended December 31, 2020.

020 FOURTH QUARTER HIGHLIGHTS

Delivered strong performance due to continued elevated demand for tissue products and solid operational execution• Achieved net income of $23 million, or $1.34 per diluted share and Adjusted EBITDA of $72 million
Net sales of $453 million, up 4.0 percent compared to the fourth quarter of 2019
Net debt reduction of $58 million

2020 FULL YEAR HIGHLIGHTS

Supported our customers and consumers during COVID volatility and delivered net income of $77 million or $4.61 per diluted share and Adjusted EBITDA of $283 million.
Net sales of $1.9 billion, up 6.1 percent compared to 2019
Net debt reduction of $200 million

"Our people delivered exceptional results while persevering through significant professional and personal challenges in 2020, and I could not be prouder of the team," said Arsen Kitch, president and chief executive officer. “We delivered an outstanding year by focusing on our people and our customers. Our tissue business navigated through significant demand volatility, built better customer relationships, and ramped the new Shelby paper machine. Our paperboard business maintained stability despite variable end market demand. This performance enabled us to reduce net debt and strengthen our balance sheet.”

OVERALL RESULTS
For the fourth quarter of 2020, Clearwater Paper reported net sales of $453 million, a 4.0 percent increase compared to net sales of $435 million reported in the fourth quarter of 2019. Net income for the fourth quarter of 2020 was $23 million, or $1.34 per diluted share, compared to net income in the fourth quarter of 2019 of $2 million, or $0.12 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income in the fourth quarter of 2020 of $25 million, or $1.45 per diluted share, compared to fourth quarter 2019 adjusted net income of $6 million, or $0.37 per diluted share. Adjusted EBITDA for the quarter was $72 million compared to the fourth quarter of 2019 Adjusted EBITDA of $52 million.

For the full year 2020, Clearwater Paper reported net sales of $1.9 billion, a 6.1 percent increase compared to net sales of $1.8 billion for 2019. Net income for the full year was $77 million in 2020, or $4.61 per diluted share, compared to a net loss for 2019 of $6 million or $0.34 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income for 2020 of $89 million, or $5.30 per diluted share, compared to 2019 adjusted net income of $4 million, or $0.23 per diluted share. Adjusted EBITDA for 2020 was $283 million, compared to 2019 Adjusted EBITDA of $167 million.

Consumer Products SegmentNet sales in the Consumer Products segment were $244 million for the fourth quarter of 2020, up 5.6 percent compared to the fourth quarter 2019 net sales of $231 million. In the fourth quarter of 2020, converted case shipments reached 13.9 million cases, an increase of 4 percent compared to 13.3 million cases shipped in the fourth quarter of 2019. Segment operating income for the fourth quarter of 2020 was $27 million compared to operating income of $2 million in the fourth quarter of 2019. Adjusted EBITDA for the segment was $44 million in the fourth quarter of 2020, up from $20 million in the fourth quarter of 2019. The increase in operating income and Adjusted EBITDA was primarily due to increased production and shipment volumes from elevated demand which drove improvement in fixed cost absorption. The segment also benefited from lower external pulp prices and freight costs.

Net sales in the Consumer Products segment were $1.0 billion for the full year 2020, up 14 percent compared to 2019 net sales of $907 million. For 2020, converted case shipments reached 60 million cases, an increase of 16 percent compared to 51 million cases shipped for 2019. Segment operating income for 2020 was $109 million, compared to operating loss of $7 million for 2019. Adjusted EBITDA for the segment was $178 million for 2020, up from $63 million for 2019.

Tissue Sales Volumes and Prices:

Total tissue volumes sold were 89,845 tons in the fourth quarter of 2020, an increase of 2 percent compared to 88,141 tons in the fourth quarter of 2019. Retail volumes represented 93 percent of total volumes sold in the fourth quarter of 2020, an increase from 90 percent in the fourth quarter of 2019. Total tissue volumes sold were 380,973 tons for the year ended of 2020, an increase of 12 percent compared to 340,969 tons for 2019. Retail volumes represented 93 percent of total volumes sold for 2020, an increase from 91 percent for 2019.
Average retail tissue net selling prices increased 2 percent to $2,745 per ton in the fourth quarter of 2020, compared to $2,698 per ton in the fourth quarter of 2019. Average retail tissue net selling prices increased 0.1 percent to $2,742 per ton for 2020, compared to $2,738 per ton for 2019.

COMPANY OUTLOOK
"For the first quarter of 2021, our primary focus will remain on the health and safety of our people while we continue to operate our facilities and service customers. Demand for tissue products is expected to be volatile due to COVID-19 and will be lower than the first quarter of 2020 when COVID-19 started impacting consumer buying of tissue. We are anticipating some inflationary headwinds, notably in market pulp pricing, as well,” Kitch concluded.

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