Clearwater Paper (CLW) Q4 2024 earnings summary

Executive summary

• Completed acquisition of Augusta paperboard facility, increasing capacity by up to 75% and improving geographic reach.

• Sold tissue business for $1.06 billion, using proceeds to reduce debt and transform into a focused paperboard packaging supplier.

• Utilized approximately $850 million of net proceeds from the tissue sale to pay down debt, achieving a net leverage ratio of 1.1x at year-end.

• Launched a $100 million share repurchase program, with $9–10 million repurchased by February 2025.

• Transitioned to a paperboard-focused company, positioning for future growth.

Financial highlights

• FY 2024 net sales from total operations were $2.2 billion, up 6% year-over-year; net sales from continuing operations were $1.4 billion, up 22% year-over-year, driven by Augusta acquisition.

• FY 2024 net income from total operations was $196 million, including a $307 million gain on the tissue sale; net loss from continuing operations was $74 million.

• Adjusted EBITDA for 2024 was $182 million, down from $281 million in 2023, mainly due to lower paperboard pricing and loss of tissue business contributions.

• Q4 2024 net sales from total operations were $483 million; net income was $199 million, driven by the tissue sale gain; Adjusted EBITDA was $21 million.

• Paperboard sales volume up 44% for the year and 63% in Q4, offset by 12% annual and 9% Q4 price declines.

Outlook and guidance

• Q1 2025 Adjusted EBITDA expected between $20 million and $30 million; no major maintenance outages planned.

• Full-year 2025 revenue projected at $1.5 billion–$1.6 billion, with internal utilization rate around 85%.

• Targeting $30–$40 million in fixed cost reductions, with annual run rate savings of $40–$50 million.

• Capital expenditures for 2025 expected at $80–$90 million.

• Anticipates mid-cycle margins of 13%–14% and free cash flow conversion of 40%–50%.