Clearwater Paper (CLW) Q2 2024 earnings summary

Executive summary

• Net sales rose 12% year-over-year to $586 million in Q2 2024, driven by the Augusta facility acquisition, but resulted in a net loss of $26 million ($1.55/share) compared to net income of $30 million ($1.75/share) in Q2 2023.

• Adjusted EBITDA declined to $35 million from $72 million in Q2 2023, mainly due to a $32 million impact from planned maintenance at Lewiston.

• Completed Augusta paperboard facility acquisition in May 2024; integration is underway.

• Announced sale of the tissue business to Sofidel America for $1.06 billion, with net proceeds of $850 million expected to deleverage the balance sheet.

• Strategic transformation focuses on becoming a premier independent supplier of paperboard products in North America, with plans to expand product offerings and invest in growth opportunities.

Financial highlights

• Q2 2024 net sales were $586.4 million, up 12% year-over-year; YTD net sales were $1.1 billion, up 3%.

• Q2 2024 net loss was $25.8 million ($1.55 per share), compared to net income of $29.7 million ($1.75 per share) in Q2 2023.

• Adjusted EBITDA for Q2 2024 was $35.3 million, down from $71.5 million in Q2 2023.

• Net debt increased to $1.12 billion as of June 30, 2024, up from $426 million at year-end 2023, reflecting the Augusta acquisition.

• Operating cash flow for the first six months was $80.3 million, up from $36.9 million in the prior year.

Outlook and guidance

• Q3 2024 Adjusted EBITDA expected between $58 million and $68 million, assuming continued operation of the tissue business.

• Expects net proceeds of $850 million from the tissue business sale, to be used for significant deleveraging.

• 2024 capital expenditures expected to be $115–$140 million, including Augusta.

• Gradual recovery in paperboard demand expected through 2024 and into 2025.

• Integration of Augusta facility on track, with targeted synergies by end of 2026.