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): April
25, 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 April 25, 2012, Clearwater Paper Corporation announced its results of operations and financial condition for the first quarter ending March 31, 2012. 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 |
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99.1 |
Press release issued by Clearwater Paper Corporation, dated April 25, 2012: CLEARWATER PAPER REPORTS FIRST QUARTER 2012 RESULTS LED BY STRONG CONSUMER PRODUCTS 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: |
April 25, 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 |
Press release issued by Clearwater Paper Corporation, dated April 25, 2012: CLEARWATER PAPER REPORTS FIRST QUARTER 2012 RESULTS LED BY STRONG CONSUMER PRODUCTS RESULTS |
Exhibit 99.1
Clearwater Paper Reports First Quarter 2012 Results Led by Strong Consumer Products Results
SPOKANE, Wash.--(BUSINESS WIRE)--April 25, 2012--Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the first quarter of 2012.
The company reported net earnings of $3.7 million, or $0.16 per diluted share, for the first quarter of 2012, compared to net earnings of $5.6 million, or $0.24 per diluted share, for the first quarter of 2011. Excluding $6.7 million in discrete tax items mostly associated with converting gallons from the Cellulosic Biofuel Producer Credits to Alternative Fuel Mixture Tax Credits, first quarter 2012 net earnings were $10.4 million, or $0.44 per diluted share. Excluding a net tax charge of $1.9 million, or $0.08 per diluted share, related to a number of discrete tax items, first quarter 2011 net earnings were $7.5 million, or $0.32 per diluted share.
First quarter 2012 earnings before interest, taxes, depreciation and amortization, or EBITDA, was $45.2 million, compared to $41.7 million in the first quarter of 2011. EBITDA in the first quarter of 2012 included $1.1 million of operating income from the company’s Shelby, North Carolina facility and an estimated $5.3 million in net cost savings from synergies associated with the acquisition of Cellu Tissue Holdings, Inc. First quarter 2012 EBITDA was also impacted by $15.5 million of scheduled major maintenance costs, compared to $11.4 million in the first quarter of 2011.
“We are pleased to report excellent first quarter results, driven by a resurgence in our Consumer Products segment operating income margin to 9.5%,” said Gordon Jones, chairman and chief executive officer. “We remain excited about expanding our tissue business via our new TAD paper machine and additional converting lines in Shelby, and expect our new paper machine to be completed on budget and on time, with the paper machine start-up in the fourth quarter of 2012.”
FIRST QUARTER 2012 SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $277.8 million for first quarter 2012, compared to first quarter 2011 net sales of $269.3 million. The increase in net sales was primarily attributable to higher net selling prices. Operating income for the first quarter of 2012 nearly doubled to $26.3 million compared to first quarter 2011 operating income of $13.8 million, primarily due to higher net sales and lower pulp costs in first quarter 2012.
Pulp and Paperboard
Net sales in the Pulp and Paperboard segment of $180.0 million for the first quarter of 2012 were down 8.4% compared to first quarter 2011 net sales of $196.6 million. The decrease in net sales was due to the sale of the company’s sawmill in November 2011. Excluding residual lumber sales of $3.0 million in the first quarter of 2012 and full quarter lumber sales of $22.6 million in the first quarter of 2011, net sales were $177.0 million and $174.0 million for the first quarter 2012 and first quarter 2011, respectively. This increase in adjusted net sales for the quarter was primarily due to higher paperboard volumes, partially offset by lower pulp volumes and lower paperboard selling prices. Operating income for first quarter 2012 declined 25.5% to $11.7 million, compared to $15.6 million for first quarter 2011, primarily due to $15.5 million in scheduled major maintenance costs incurred during the first quarter of 2012, compared to $11.4 million in the first quarter of 2011.
Corporate and Eliminations
First quarter 2012 corporate and eliminations were $12.3 million. The first quarter 2011 amount of $5.9 million included $2.6 million of one-time benefits related to eliminations. The remaining difference between first quarter 2011 and first quarter 2012 is primarily a result of the continued integration of Cellu Tissue administration, support functions and locations, increased burden rates and higher incentive compensation expense.
Taxes
The actual income tax rate for the first quarter of 2012 was 76.6%, compared to 52.3% in the first quarter of 2011. The actual rate includes the effect of converting a portion of the company’s Cellulosic Biofuel Producer Credits back to Alternative Fuel Mixture Tax Credits to preserve the tax benefits. Excluding discrete items, the effective tax rates in the first quarter of 2012 and 2011 were approximately 34.6% and 35.8%, respectively. The estimated annual effective tax rate for 2012, excluding discrete items, is expected to be approximately 34.6%.
Note Regarding Use of Non-GAAP Financial Measure
In this press release, the company presents its results for the first quarter of 2012 and 2011, including EBITDA. The EBITDA amounts are not in accordance with generally accepted accounting principles (GAAP) and accordingly a reconciliation of EBITDA to net earnings determined in accordance with GAAP is included at the end of this press release.
CONFERENCE CALL INFORMATION
A live audio webcast and conference call will be held today, Wednesday, April 25, 2012, at 2 p.m. Pacific time (5 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 at 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 partnerships through quality and service.
FORWARD-LOOKING STATEMENTS
This press 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 delivery and budgeted costs relating to the company’s new paper machine and converting lines in Shelby, North Carolina, expected future cost savings from synergies relating to the company’s Cellu Tissue acquisition, tax rates and the company’s strategic goals. 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, significant delays in the delivery of the company’s new paper machine, paper machine components or converting equipment; significant delays in the completion of the new Shelby facility; mechanical or other difficulties affecting the start-up of operations at the new Shelby facility; the company's ability to successfully implement its expansion strategies; 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; competition from larger producers; changes in transportation costs and disruptions in transportation services; customers' product preferences; changes in the U.S. and international economies; changes in raw material and energy costs; cyclical industry conditions; competitive pricing pressure for the company's products; unanticipated manufacturing disruptions; changes in general and industry-specific laws and regulations; unforeseen environmental liabilities or expenditures; labor disruptions; 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 press 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 | ||||||||||||||||||||||||||
Condensed Consolidated Statements of Operations |
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Unaudited (Dollars in thousands - except per-share amounts)
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Three Months Ended | ||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||
Net sales | $ | 457,798 | 100 | % | $ | 465,830 | 100 | % | ||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||
Cost of sales | (403,076 | ) | 88 | % | (414,920 | ) | 89 | % | ||||||||||||||||||
Selling, general and administrative expenses | (29,074 | ) | 6 | % | (27,364 | ) | 6 | % | ||||||||||||||||||
Total operating costs and expenses | (432,150 | ) | 94 | % | (442,284 | ) | 95 | % | ||||||||||||||||||
Income from operations | 25,648 | 6 | % | 23,546 | 5 | % | ||||||||||||||||||||
Interest expense, net | (9,728 | ) | 2 | % | (11,333 | ) | 2 | % | ||||||||||||||||||
Other, net | - | - | (476 | ) | - | |||||||||||||||||||||
Earnings before income taxes | 15,920 | 3 | % | 11,737 | 3 | % | ||||||||||||||||||||
Income tax provision | (12,194 | ) | 3 | % | (6,133 | ) | 1 | % | ||||||||||||||||||
Net earnings | $ | 3,726 | 1 | % | $ | 5,604 | 1 | % | ||||||||||||||||||
Net earnings per common share: | ||||||||||||||||||||||||||
Basic | $ | 0.16 | $ | 0.25 | ||||||||||||||||||||||
Diluted | 0.16 | 0.24 | ||||||||||||||||||||||||
Average shares outstanding (in thousands): | ||||||||||||||||||||||||||
Basic | 23,079 | 23,026 | ||||||||||||||||||||||||
Diluted |
23,417 |
23,678 | ||||||||||||||||||||||||
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 | ||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||
Unaudited (Dollars in thousands) | ||||||||||||||
March 31, | December 31, | |||||||||||||
2012 | 2011 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash | $ | 24,544 | $ | 8,439 | ||||||||||
Restricted cash | 770 | 769 | ||||||||||||
Short-term investments | 25,000 | 55,001 | ||||||||||||
Receivables, net | 179,583 | 176,189 | ||||||||||||
Taxes receivable | 14,508 | 10,000 | ||||||||||||
Inventories | 244,722 | 244,071 | ||||||||||||
Deferred tax assets | 27,573 | 39,466 | ||||||||||||
Prepaid expenses | 10,718 | 11,396 | ||||||||||||
Total current assets | 527,418 | 545,331 | ||||||||||||
Property, plant and equipment, net | 768,339 | 735,566 | ||||||||||||
Goodwill | 229,533 | 229,533 | ||||||||||||
Intangible assets, net | 48,117 | 49,748 | ||||||||||||
Other assets, net | 10,560 | 11,140 | ||||||||||||
TOTAL ASSETS | $ | 1,583,967 | $ | 1,571,318 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | $ | 173,806 | $ | 144,631 | ||||||||||
Current liability for pensions and other postretirement employee benefits | 9,861 | 9,861 | ||||||||||||
Total current liabilities | 183,667 | 154,492 | ||||||||||||
Long-term debt | 523,752 | 523,694 | ||||||||||||
Liability for pensions and other postretirement employee benefits | 200,246 | 215,932 | ||||||||||||
Other long-term obligations | 47,560 | 48,474 | ||||||||||||
Accrued taxes | 78,107 | 74,464 | ||||||||||||
Deferred tax liabilities | 69,341 | 69,358 | ||||||||||||
Stockholders' equity, excluding accumulated other comprehensive loss, net of tax | 594,757 | 600,169 | ||||||||||||
Accumulated other comprehensive loss, net of tax | (113,463 | ) | (115,265 | ) | ||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,583,967 | $ | 1,571,318 | ||||||||||
Clearwater Paper Corporation | ||||||||||||||||||||||||||||||||||
Segment Information | ||||||||||||||||||||||||||||||||||
Unaudited (Dollars in thousands) | ||||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||||||||||||||
Segment net sales: | ||||||||||||||||||||||||||||||||||
Consumer Products | $ | 277,830 | 61 | % | $ | 269,252 | 58 | % | ||||||||||||||||||||||||||
Pulp and Paperboard | 179,968 | 39 | % | 196,578 | 42 | % | ||||||||||||||||||||||||||||
Total segment net sales | $ | 457,798 | 100 | % | $ | 465,830 | 100 | % | ||||||||||||||||||||||||||
Operating income: | ||||||||||||||||||||||||||||||||||
Consumer Products | $ | 26,271 | 102 | % | $ | 13,815 | 59 | % | ||||||||||||||||||||||||||
Pulp and Paperboard | 11,658 | 45 | % | 15,648 | 66 | % | ||||||||||||||||||||||||||||
37,929 | 29,463 | |||||||||||||||||||||||||||||||||
Corporate and eliminations | (12,281 | ) | 48 | % | (5,917 | ) | 25 | % | ||||||||||||||||||||||||||
Income from operations | $ | 25,648 | 100 | % | $ | 23,546 | 100 | % | ||||||||||||||||||||||||||
Clearwater Paper Corporation | |||||||||||||||
Reconciliation of Consolidated Net Earnings to EBITDA |
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Unaudited (Dollars in thousands)
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Three Months Ended | |||||||||||||||
March 31, | |||||||||||||||
2012 | 2011 | ||||||||||||||
Net earnings | $ | 3,726 | $ | 5,604 | |||||||||||
Add back: | |||||||||||||||
Interest expense, net | 9,728 | 11,333 | |||||||||||||
Income tax provision | 12,194 | 6,133 | |||||||||||||
Depreciation and amortization expense | 19,548 | 18,669 | |||||||||||||
EBITDA | $ | 45,196 | $ | 41,739 | |||||||||||
Clearwater Paper Corporation | |||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||
Unaudited (Dollars in thousands, except per-share amounts) | |||||||||||||
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2012 | 2011 | ||||||||||||
GAAP net earnings | $ | 3,726 | $ | 5,604 | |||||||||
Special items, after-tax: | |||||||||||||
Discrete tax items | 6,691 | 1,913 | |||||||||||
Net earnings, excluding special items | $ | 10,417 | $ | 7,517 | |||||||||
GAAP net earnings per diluted share | $ | 0.16 | $ | 0.24 | |||||||||
Special items, after-tax: | |||||||||||||
Discrete tax items |
0.28 |
0.08 | |||||||||||
Net earnings per diluted share, excluding special items | $ |
0.44 |
$ | 0.32 | |||||||||
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. |
CONTACT:
Clearwater Paper Corporation
News media:
Matt Van
Vleet, 509-344-5912
or
John Hunter, 509-344-5947
Interim CFO
or
Investors:
IR
Sense
Sean Butson, 509-344-5906