UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
_________________
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of Report (Date of earliest
event reported): February
22, 2012
_________________
CLEARWATER
PAPER CORPORATION
(Exact
name of registrant as specified in its charter)
_________________
Delaware (State or other jurisdiction of incorporation) |
001-34146
(Commission File Number) |
20-3594554
(IRS Employer |
601 West Riverside Ave., Suite 1100
Spokane, WA 99201
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (509) 344-5900
_________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On February 22, 2012, Clearwater Paper Corporation announced its results of operations and financial condition for the fourth quarter and full year results ending December 31, 2011. The press release containing this announcement is furnished as Exhibit 99.1 hereto.
The information in this Form 8-K and the Exhibit attached hereto shall
not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, except as
shall be expressly set forth by specific reference in such filing.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 | News release issued by Clearwater Paper Corporation, dated February 22, 2012: | |
CLEARWATER PAPER REPORTS FOURTH QUARTER AND FULL YEAR 2011 RESULTS |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: |
February 22, 2012 |
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CLEARWATER PAPER CORPORATION |
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By: |
/s/ Michael S. Gadd |
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Michael S. Gadd, Corporate Secretary |
EXHIBIT INDEX
Exhibit |
Description |
99.1 |
News release issued by Clearwater Paper Corporation, dated February 22, 2012: CLEARWATER PAPER REPORTS FOURTH QUARTER AND FULL YEAR 2011 RESULTS |
Exhibit 99.1
Clearwater Paper Reports Fourth Quarter and Full Year 2011 Results
SPOKANE, Wash.--(BUSINESS WIRE)--February 22, 2012--Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the fourth quarter and full year of 2011.
The company reported net earnings of $11.5 million, or $0.48 per diluted share, for the fourth quarter of 2011, compared to net earnings of $37.8 million, or $1.60 per diluted share, for the fourth quarter of 2010. Excluding $1.8 million in after-tax charges related to the sale of our Lewiston, Idaho sawmill on November 28, 2011, fourth quarter 2011 net earnings were $13.3 million, or $0.55 per diluted common share. Fourth quarter 2010 results included $10.5 million in after-tax costs related to the Cellu Tissue acquisition and a $27.1 million benefit from a Cellulosic Biofuel Producer Credit. Excluding these items, fourth quarter 2010 net earnings would have been $21.2 million, or $0.90 per diluted common share.
Fourth quarter 2011 earnings before interest, taxes, depreciation and amortization, or EBITDA, was $52.2 million, compared to $34.6 million in the fourth quarter of 2010. Fourth quarter 2011 Adjusted EBITDA, which excludes $2.9 million in pre-tax adjustments associated with the sale of the sawmill, was $55.1 million. Fourth quarter 2010 Adjusted EBITDA, which excludes $17.2 million in pre-tax Cellu Tissue acquisition related expenses, was $51.9 million.
"We reported record net sales of nearly $2 billion in 2011 and remain excited about our growing tissue business,” said Gordon Jones, chairman and chief executive officer. “Our new tissue machine and additional converting lines at Shelby, North Carolina are on budget and scheduled for start-up in December 2012.”
As part of the company's previously announced share buyback program, during the fourth quarter the company repurchased 41,700 shares of outstanding common stock at an average price of $32.30 per share. Since announcing the $30 million share buyback authorization on July 28, 2011, the company has repurchased 333,300 shares at a total cost of $11.3 million.
FOURTH QUARTER 2011 SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $268.5 million for the fourth quarter of 2011, as compared to fourth quarter 2010 net sales of $142.9 million. The increase in net sales was predominately attributable to the inclusion of Cellu Tissue's operating results for the full fourth quarter 2011 compared to inclusion of only four days of operating results in fourth quarter 2010. Operating income for the fourth quarter of 2011 was $15.0 million, compared with operating income of $11.3 million for the fourth quarter of 2010. Excluding $6.3 million in pre-tax Cellu Tissue acquisition related costs, fourth quarter 2010 operating income would have been $17.6 million.
Pulp and Paperboard
Net sales of $197.9 million for the fourth quarter of 2011 were down 2.3%, compared to fourth quarter 2010 net sales of $202.6 million. Operating income for the quarter declined to $16.5 million, compared to $29.1 million for the fourth quarter of 2010. Excluding $15.4 million in sawmill sale and related costs, operating income would have been $31.9 million for the fourth quarter of 2011. The company also made offsetting adjustments to LIFO inventory reserves in connection with the sawmill sale, which were accounted for at the corporate rather than the segment level.
Taxes
The effective tax rate for the fourth quarter of 2011, excluding discrete items, was approximately 35.6%, compared to 35.8% in the fourth quarter of 2010. The actual income tax rate for the fourth quarter of 2011 was 47.8%, compared to a benefit of 213.1% in the fourth quarter of 2010. Our 2010 effective rate included the benefits from the Cellulosic Biofuel Producer Credit.
Note Regarding Use of Non-GAAP Financial Measures
In this news release, the company presents its results for the fourth quarter and full year of 2011 and 2010, including EBITDA and Adjusted EBITDA. The EBITDA and Adjusted EBITDA amounts are not in accordance with generally accepted accounting principles (GAAP) and accordingly a reconciliation to net earnings determined in accordance with GAAP is included at the end of this news release.
CONFERENCE CALL INFORMATION
A live audio webcast and conference call will be held today, Wednesday, February 22, 2012 at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). Investors may access the conference call by dialing 877-303-9241 (for U.S./Canada investors) or 760-666-3575 (for international investors). The audio webcast may be accessed on the company's website at http://ir.clearwaterpaper.com/events.cfm.
An accompanying presentation including supplemental information will be available for downloading at the same site after 1:00 p.m. Pacific time (4:00 p.m. Eastern time). The webcast will be audio only. Investors are recommended to download the accompanying presentation prior to the call.
For those unable to participate in the call, an archived recording will be available through the Clearwater Paper Corporation website www.clearwaterpaper.com under "Investor Relations" following the conference call.
ABOUT CLEARWATER PAPER
Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, parent roll tissue, machine glazed tissue, bleached paperboard and pulp at 15 manufacturing locations in the U.S. and Canada. The company is a premier supplier of private label tissue to major retailers and wholesale distributors. This includes grocery, drug, mass merchants and discount stores. The company also produces bleached paperboard used by quality-conscious printers and packaging converters. Clearwater Paper's employees build shareholder value by developing strong customer relationships through quality and service.
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding the expected growth of the company’s tissue business, the expected contribution of the first two converting lines at the company’s Shelby facilities to the company’s financial results, the expected delivery and budgeted cost relating to the company’s new tissue machine and converting lines in Shelby, North Carolina, and expected future cost savings from synergies relating to the company’s Cellu Tissue acquisition. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, difficulties with the completion of the company’s new tissue manufacturing and converting facilities, including the completion of the company’s new through-air-dried paper machine; difficulties with the integration process or the realization of the benefits expected from the company's acquisition of Cellu Tissue; changes in raw material and energy costs, including changes in the cost and availability of wood fiber and wood pulp; changes in transportation costs and disruptions in transportation services; the loss of large customers; customers' product preferences; changes in the United States and international economies; cyclical industry conditions; competitive pricing pressure for the company's products; reliance on a limited number of third-party suppliers of raw materials; an inability to successfully implement our expansion strategies; labor disruptions; unanticipated manufacturing disruptions; changes in general and industry-specific laws and regulations; unforeseen environmental liabilities or expenditures; and other risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this news release and the company does not undertake to update any forward-looking statements.
For additional information on Clearwater Paper, please visit our website at www.clearwaterpaper.com.
Clearwater Paper Corporation | ||||||||||||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||||||||||||
Unaudited (Dollars in thousands - except per-share amounts) | ||||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||
Net sales | $ | 466,391 | 100 | % | $ | 345,557 | 100 | % | $ | 1,927,973 | 100 | % | $ | 1,372,965 | 100 | % | ||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||
Cost of sales | (405,325 | ) | 87 | % | (281,883 | ) | 82 | % | (1,702,530 | ) | 88 | % | (1,173,804 | ) | 85 | % | ||||||||||||||
Selling, general and administrative expenses | (28,343 | ) | 6 | % | (41,270 | ) | 12 | % | (109,998 | ) | 6 | % | (100,394 | ) | 7 | % | ||||||||||||||
Total operating costs and expenses | (433,668 | ) | 93 | % | (323,153 | ) | 94 | % | (1,812,528 | ) | 94 | % | (1,274,198 | ) | 93 | % | ||||||||||||||
Income from operations | 32,723 | 7 | % | 22,404 | 6 | % | 115,445 | 6 | % | 98,767 | 7 | % | ||||||||||||||||||
Interest expense, net | (10,384 | ) | 2 | % | (10,335 | ) | 3 | % | (44,809 | ) | 2 | % | (22,571 | ) | 2 | % | ||||||||||||||
Other, net | (301 | ) | - | - | - | 284 | - | - | - | |||||||||||||||||||||
Earnings before income taxes | 22,038 | 5 | % | 12,069 | 3 | % | 70,920 | 4 | % | 76,196 | 6 | % | ||||||||||||||||||
Income tax (provision) benefit | (10,536 | ) | 2 | % | 25,717 | (7 | %) | (31,246 | ) | 2 | % | (2,396 | ) |
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Net earnings | $ | 11,502 | 2 | % | $ | 37,786 | 11 | % | $ | 39,674 | 2 | % | $ | 73,800 | 5 | % | ||||||||||||||
Net earnings per common share: | ||||||||||||||||||||||||||||||
Basic | $ | 0.51 | $ | 1.65 | $ | 1.73 | $ | 3.22 | ||||||||||||||||||||||
Diluted | 0.48 | 1.60 | 1.66 | 3.12 | ||||||||||||||||||||||||||
Average shares outstanding (in thousands): | ||||||||||||||||||||||||||||||
Basic | 22,728 | 22,958 | 22,914 | 22,947 | ||||||||||||||||||||||||||
Diluted | 23,782 | 23,693 | 23,952 | 23,670 | ||||||||||||||||||||||||||
All common share and per share amounts have been adjusted for the two-for-one stock split effected in the form of a stock dividend distributed on August 26, 2011. |
Clearwater Paper Corporation | ||||||||
Consolidated Balance Sheets | ||||||||
Unaudited (Dollars in thousands) | ||||||||
December 31, | December 31, | |||||||
2011 |
2010 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 8,439 | $ | 18,928 | ||||
Restricted cash | 769 | 3,637 | ||||||
Short-term investments | 55,001 | 126,095 | ||||||
Receivables, net | 176,189 | 153,335 | ||||||
Taxes receivable | 10,000 | 10,354 | ||||||
Inventories | 244,071 | 228,321 | ||||||
Deferred tax assets | 39,466 | 37,374 | ||||||
Prepaid expenses | 11,396 | 11,415 | ||||||
Total current assets | 545,331 | 589,459 | ||||||
Property, plant and equipment, net | 735,566 | 654,456 | ||||||
Goodwill | 229,533 | 229,533 | ||||||
Intangible assets, net | 49,748 | 56,400 | ||||||
Other assets, net | 11,140 | 15,488 | ||||||
$ | 1,571,318 | $ | 1,545,336 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 144,631 | $ | 184,604 | ||||
Current portion of long-term debt | - | 760 | ||||||
Current liability for pensions and other postretirement employee benefits | 9,861 | 9,749 | ||||||
Total current liabilities | 154,492 | 195,113 | ||||||
Long-term debt, net of current portion | 523,694 | 538,314 | ||||||
Liability for pensions and other postretirement employee benefits | 215,932 | 187,116 | ||||||
Other long-term obligations | 48,474 | 23,369 | ||||||
Accrued taxes | 74,464 | 72,011 | ||||||
Deferred tax liabilities | 69,358 | 61,064 | ||||||
Stockholders' equity, excluding accumulated other comprehensive loss, net of tax | 600,169 | 566,701 | ||||||
Accumulated other comprehensive loss, net of tax | (115,265 | ) | (98,352 | ) | ||||
$ | 1,571,318 | $ | 1,545,336 |
Clearwater Paper Corporation | ||||||||||||||||||||||||||||
Segment Information | ||||||||||||||||||||||||||||
Unaudited (Dollars in thousands) | ||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||||||
2011 |
2010 (1) |
2011 | 2010 (1) | |||||||||||||||||||||||||
Segment net sales: | ||||||||||||||||||||||||||||
Consumer Products | $ | 268,526 | 58 | % | $ | 142,913 | 41 | % | $ | 1,092,133 | 57 | % | $ | 570,047 | 42 | % | ||||||||||||
Pulp and Paperboard | 197,865 | 42 | % | 202,644 | 59 | % | 835,840 | 43 | % | 802,918 | 58 | % | ||||||||||||||||
Total segment net sales | $ | 466,391 | 100 | % | $ | 345,557 | 100 | % | $ | 1,927,973 | 100 | % | $ | 1,372,965 | 100 | % | ||||||||||||
Operating income: | ||||||||||||||||||||||||||||
Consumer Products | $ | 15,048 | 46 | % | $ | 11,270 | 50 | % | $ | 42,806 | 37 | % | $ | 80,791 | 82 | % | ||||||||||||
Pulp and Paperboard (2) | 16,457 | 50 | % | 29,053 | 130 | % | 92,827 | 80 | % | 64,869 | 66 | % | ||||||||||||||||
31,505 | 40,323 | 135,633 | 145,660 | |||||||||||||||||||||||||
Corporate and eliminations (2) | 1,218 | 4 | % | (17,919 | ) | 80 | % | (20,188 | ) | 17 | % | (46,893 | ) | 47 | % | |||||||||||||
Income from operations | $ | 32,723 | 100 | % | $ | 22,404 | 100 | % | $ | 115,445 | 100 | % | $ | 98,767 | 100 | % | ||||||||||||
(1) Prior period net sales and segment operating income have been adjusted to reflect our change in accounting for intersegment pulp transfers. Commencing January 1, 2011, rather than recording the intersegment transfer of pulp through net sales, the costs of pulp are transferred from the Pulp and Paperboard segment to the Consumer Products segment. |
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(2) Results for Pulp and Paperboard for 2011 included additional expenses associated with the sale of the Lewiston, Idaho sawmill, which were partially offset by LIFO inventory reserve and other adjustments recorded at the corporate level. |
Clearwater Paper Corporation | |||||||||||||
Reconciliation of Consolidated Net Earnings to EBITDA and Adjusted EBITDA | |||||||||||||
Unaudited (Dollars in thousands) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
December 31, | December 31, | ||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
Net earnings | $ | 11,502 | $ | 37,786 | $ | 39,674 | $ | 73,800 | |||||
Add back: | |||||||||||||
Interest expense, net | 10,384 | 10,335 | 44,809 | 22,571 | |||||||||
Income tax provision (benefit) | 10,536 | (25,717 | ) | 31,246 | 2,396 | ||||||||
Depreciation and amortization expense | 19,825 | 12,221 | 76,933 | 47,728 | |||||||||
EBITDA | $ | 52,247 | $ | 34,625 | $ | 192,662 | $ | 146,495 | |||||
Lewiston, Idaho sawmill sale adjustments | 2,883 | - | 2,883 | - | |||||||||
Cellu Tissue acquisition related expenses | - | 17,248 | - | 20,354 | |||||||||
Adjusted EBITDA | $ | 55,130 | $ | 51,873 | $ | 195,545 | $ | 166,849 |
Clearwater Paper Corporation |
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Reconciliation of Non-GAAP Financial Measures | ||||||||||||||
Unaudited (Dollars in thousands, except per-share amounts) | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||
GAAP net earnings | $ | 11,502 | $ | 37,786 | $ | 39,674 | $ | 73,800 | ||||||
Special items, after-tax: | ||||||||||||||
Lewiston, Idaho sawmill sale and related adjustments | 1,759 | - | 1,759 | - | ||||||||||
Cellulosic Biofuel Producer Credit | - | (27,087 | ) | - | (27,087 | ) | ||||||||
Patient Protection and Affordable Care Act | - | (106 | ) | - | 3,099 | |||||||||
Cellu Tissue acquisition related expenses | - | 10,521 | - | 12,416 | ||||||||||
Net earnings, excluding special items | $ | 13,261 | $ | 21,114 | $ | 41,433 | $ | 62,228 | ||||||
GAAP net earnings per diluted share | $ | 0.48 | $ | 1.60 | $ | 1.66 | $ | 3.12 | ||||||
Special items, after-tax: | ||||||||||||||
Lewiston, Idaho sawmill sale and related adjustments | 0.07 | - | 0.07 | - | ||||||||||
Cellulosic Biofuel Producer Credit | - | (1.14 | ) | - | (1.14 | ) | ||||||||
Patient Protection and Affordable Care Act | - | (0.01 | ) | - | 0.13 | |||||||||
Cellu Tissue acquisition related expenses | - | 0.44 | - | 0.52 | ||||||||||
Net earnings per diluted share, excluding special items | $ | 0.55 | $ | 0.89 | $ | 1.73 | $ | 2.63 |
CONTACT:
Clearwater Paper Corporation
News media:
Matt Van
Vleet, 509-344-5912
or
CFO/COO:
Linda Massman, 509-344-5905
or
Investors:
IR
Sense
Sean Butson, 509-344-5906