Clearwater Paper 4Q 2021 Results: Sales up 8 Percent to $498.8 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, 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 percent 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 percent 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 percent 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.

Consumer Products Segment

Net sales in the Consumer Products segment were $232 million for the fourth quarter of 2021, down 3 percent 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 percent 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 percent compared to 2020 net sales of $1,018 million. For 2021, retail converted case shipments were 46 million cases, a decrease of 21 percent 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 percent 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 percent compared to 355,862 tons for 2020.
Retail tissue average net selling prices increased 3 percent 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 percent 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.

WEBCAST INFORMATION

Clearwater Paper Corporation will discuss these results during an earnings conference call that begins at 2:00 p.m. Pacific Time today. A live webcast and accompanying supplemental information will be available on the company's website at http://ir.clearwaterpaper.com. A replay of today's conference call will be available on the website at http://ir.clearwaterpaper.com/investors/events-and-presentations beginning at 5:00 p.m. Pacific Time today.

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