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): October
24, 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 October 24, 2012, Clearwater Paper Corporation announced its results of operations and financial condition for the third quarter ending September 30, 2012. The press release containing this announcement is furnished as Exhibit 99.1 hereto.
The information furnished in this Form 8-K, including the exhibit attached, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release
issued by Clearwater Paper Corporation, dated October 24, 2012:
CLEARWATER PAPER REPORTS THIRD QUARTER 2012 RESULTS
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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: |
October 24, 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 October 24, 2012: CLEARWATER PAPER REPORTS THIRD QUARTER 2012 RESULTS |
Exhibit 99.1
Clearwater Paper Reports Third Quarter 2012 Results
Consumer Products and Paperboard Report Strong Shipments
SPOKANE, Wash.--(BUSINESS WIRE)--October 24, 2012--Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the third quarter of 2012.
The company reported net sales of $480.2 million for the third quarter of 2012, down 4.2% compared to $501.1 million for the third quarter of 2011 due primarily to the sale of the company’s sawmill in the fourth quarter of last year. Net earnings were $19.1 million, or $0.80 per diluted share in the third quarter of 2012, compared to $8.6 million and $0.37, respectively, for the third quarter of 2011. Earnings before interest, taxes, depreciation and amortization, or EBITDA, was $59.0 million this quarter compared to $46.2 million in the same quarter last year.
“Strong Pulp and Paperboard results drove solid third quarter EBITDA,” said Gordon Jones, chairman and chief executive officer. “Additionally, our new paper machine at Shelby, North Carolina, remains on track to be operational in the fourth quarter of 2012. In connection with our acquisition of Cellu Tissue, we now expect approximately $29 million in net cost savings from synergies in 2012 and $35-$40 million annually beginning in 2013.”
The company repurchased 50,300 shares of its common stock at a total cost of $1.9 million during the third quarter of 2012. Since announcing its $30.0 million share buyback authorization in July 2011, the company has repurchased 622,082 shares at a total cost of $20.7 million for an average share price of $33.28.
THIRD QUARTER 2012 SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $293.0 million for the third quarter of 2012, as compared to third quarter 2011 net sales of $285.2 million. The 2.7% increase was attributable to higher all around volumes, which more than offset a slight decline in net selling price per ton. Operating income for the third quarter of 2012 more than doubled to $18.5 million as compared with the third quarter of 2011 primarily due to higher net sales and lower operating costs, particularly lower pulp costs.
Pulp and Paperboard
Net sales of $187.3 million for the third quarter of 2012 were down 13.3%, compared to third quarter 2011 net sales of $215.9 million. The decrease in net sales was primarily due to the divestiture of the company’s sawmill last November and a reduction in the sale of external pulp due to increased internal usage. Operating income for the quarter increased 31.2% to $34.4 million, compared to $26.3 million for the third quarter of 2011. The improvement was primarily due to lower operating costs, including no major maintenance during the third quarter of 2012 as compared to $3.1 million in the third quarter of 2011.
Taxes
The company's effective tax rate for the quarter was 40.2%, which was down slightly from 40.7% in the third quarter of 2011 and up from 39.2% in the second quarter of 2012. The company expects its annual effective tax rate to be approximately 43%-44% for 2012, including discrete items.
Note Regarding Use of Non-GAAP Financial Measures
In this press release, the company presents its results for the third quarter of 2012 and 2011, including EBITDA and Adjusted EBITDA. The EBITDA and Adjusted EBITDA amounts are not in accordance with generally accepted accounting principles (GAAP) and accordingly reconciliations of EBITDA and Adjusted EBITDA to net earnings determined in accordance with GAAP are included at the end of this press release.
CONFERENCE CALL INFORMATION
A live audio webcast and conference call will be held today, Wednesday, October 24, 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 1:05 p.m. Pacific time (4:05 p.m. Eastern time). The webcast will be audio only. The company recommends that investors 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 at 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 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 company's expectation that its new paper machine in Shelby will be operational in the fourth quarter of 2012, that it will achieve total net cost savings from synergies resulting from the Cellu Tissue acquisition of approximately $29 million in 2012, that it will achieve $35 to $40 million annually in cost savings from synergies beginning in 2013, and that its annual effective tax rate for 2012 will be approximately 43%-44%, including discrete items. 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 integration process or the realization of the benefits expected from the company's acquisition of Cellu Tissue; the company's ability to complete its TAD tissue facility in Shelby and upgrade in Las Vegas; competition from larger producers; customers' product preferences; changes in the United States and international economies; changes in raw material and energy costs, including pulp costs; cyclical industry conditions; competitive pricing pressure for the company's products; changes in transportation costs and disruptions in transportation services; 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 the company’s website at www.clearwaterpaper.com.
Clearwater Paper Corporation | ||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||||||||||||||||
Unaudited (Dollars in thousands - except per-share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 480,233 | 100 | % | $ | 501,125 | 100 | % | $ | 1,411,603 | 100 | % | $ | 1,461,582 | 100 | % | ||||||||||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | (409,822 | ) | 85 | % | (448,927 | ) | 90 | % | (1,211,444 | ) | 86 | % | (1,297,205 | ) | 89 | % | ||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (30,649 | ) | 6 | % | (26,815 | ) | 5 | % | (90,252 | ) | 6 | % | (81,655 | ) | 6 | % | ||||||||||||||||||||||||||||||
Total operating costs and expenses | (440,471 | ) | 92 | % | (475,742 | ) | 95 | % | (1,301,696 | ) | 92 | % | (1,378,860 | ) | 94 | % | ||||||||||||||||||||||||||||||
Income from operations | 39,762 | 8 | % | 25,383 | 5 | % | 109,907 | 8 | % | 82,722 | 6 | % | ||||||||||||||||||||||||||||||||||
Interest expense, net | (7,900 | ) | 2 | % | (12,100 | ) | 2 | % | (26,775 | ) | 2 | % | (34,425 | ) | 2 | % | ||||||||||||||||||||||||||||||
Other, net | - | - | 1,290 | - | - | - | 585 | - | ||||||||||||||||||||||||||||||||||||||
Earnings before income taxes | 31,862 | 7 | % | 14,573 | 3 | % | 83,132 | 6 | % | 48,882 | 3 | % | ||||||||||||||||||||||||||||||||||
Income tax provision | (12,798 | ) | 3 | % | (5,928 | ) | 1 | % | (38,853 | ) | 3 | % | (20,710 | ) | 1 | % | ||||||||||||||||||||||||||||||
Net earnings | $ | 19,064 | 4 | % | $ | 8,645 | 2 | % | $ | 44,279 | 3 | % | $ | 28,172 | 2 | % | ||||||||||||||||||||||||||||||
Net earnings per common share: | ||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.82 | $ | 0.38 | $ | 1.90 | $ | 1.23 | ||||||||||||||||||||||||||||||||||||||
Diluted | 0.80 | 0.37 | 1.87 | 1.19 | ||||||||||||||||||||||||||||||||||||||||||
Average shares outstanding (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||||
Basic | 23,361 | 22,865 | 23,337 | 22,976 | ||||||||||||||||||||||||||||||||||||||||||
Diluted | 23,700 | 23,591 | 23,645 | 23,692 | ||||||||||||||||||||||||||||||||||||||||||
Clearwater Paper Corporation | ||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||
Unaudited (Dollars in thousands) | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2012 | 2011 | |||||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 19,564 | $ | 8,439 | ||||||||||||
Restricted cash | - | 769 | ||||||||||||||
Short-term investments | 37,000 | 55,001 | ||||||||||||||
Receivables, net | 175,587 | 176,189 | ||||||||||||||
Taxes receivable | 11,918 | 10,000 | ||||||||||||||
Inventories | 224,435 | 244,071 | ||||||||||||||
Deferred tax assets | 24,857 | 39,466 | ||||||||||||||
Prepaid expenses | 8,570 | 11,396 | ||||||||||||||
Total current assets | 501,931 | 545,331 | ||||||||||||||
Property, plant and equipment, net | 840,981 | 735,566 | ||||||||||||||
Goodwill | 229,533 | 229,533 | ||||||||||||||
Intangible assets, net | 44,854 | 49,748 | ||||||||||||||
Other assets, net | 9,603 | 11,140 | ||||||||||||||
TOTAL ASSETS | $ | 1,626,902 | $ | 1,571,318 | ||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable and accrued liabilities | $ | 171,195 | $ | 144,631 | ||||||||||||
Current liability for pensions and other postretirement employee benefits | 9,861 | 9,861 | ||||||||||||||
Total current liabilities | 181,056 | 154,492 | ||||||||||||||
Long-term debt | 523,872 | 523,694 | ||||||||||||||
Liability for pensions and other postretirement employee benefits | 197,222 | 215,932 | ||||||||||||||
Other long-term obligations | 48,560 | 48,474 | ||||||||||||||
Accrued taxes | 78,625 | 74,464 | ||||||||||||||
Deferred tax liabilities | 70,972 | 69,358 | ||||||||||||||
Stockholders' equity, excluding accumulated other comprehensive loss, net of tax | 637,297 | 600,169 | ||||||||||||||
Accumulated other comprehensive loss, net of tax | (110,702 | ) | (115,265 | ) | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,626,902 | $ | 1,571,318 | ||||||||||||
Clearwater Paper Corporation | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||||||||||||||||||||||||||
Segment net sales: | |||||||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | $ | 292,959 | 61 | % | $ | 285,237 | 57 | % | $ | 853,911 | 60 | % | $ | 823,607 | 56 | % | |||||||||||||||||||||||||||||||||
Pulp and Paperboard | 187,274 | 39 | % | 215,888 | 43 | % | 557,692 | 40 | % | 637,975 | 44 | % | |||||||||||||||||||||||||||||||||||||
Total segment net sales | $ | 480,233 | 100 | % | $ | 501,125 | 100 | % | $ | 1,411,603 | 100 | % | $ | 1,461,582 | 100 | % | |||||||||||||||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | $ | 18,453 | 46 | % | $ | 7,075 | 28 | % | $ | 70,420 | 64 | % | $ | 27,758 | 34 | % | |||||||||||||||||||||||||||||||||
Pulp and Paperboard | 34,449 | 87 | % | 26,266 | 103 | % | 78,108 | 71 | % | 76,370 | 92 | % | |||||||||||||||||||||||||||||||||||||
52,902 | 33,341 | 148,528 | 104,128 | ||||||||||||||||||||||||||||||||||||||||||||||
Corporate and eliminations | (13,140 | ) | 33 | % | (7,958 | ) | 31 | % | (38,621 | ) | 35 | % | (21,406 | ) | 26 | % | |||||||||||||||||||||||||||||||||
Income from operations | $ | 39,762 | 100 | % | $ | 25,383 | 100 | % | $ | 109,907 | 100 | % | $ | 82,722 | 100 | % | |||||||||||||||||||||||||||||||||
Clearwater Paper Corporation | ||||||||||||||||||||||||||
Reconciliation of Consolidated Net Earnings to EBITDA and Adjusted EBITDA |
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Unaudited (Dollars in thousands) | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||
Net earnings | $ | 19,064 | $ | 8,645 | $ | 44,279 | $ | 28,172 | ||||||||||||||||||
Add back: | ||||||||||||||||||||||||||
Interest expense, net | 7,900 | 12,100 | 26,775 | 34,425 | ||||||||||||||||||||||
Income tax provision | 12,798 | 5,928 | 38,853 | 20,710 | ||||||||||||||||||||||
Depreciation and amortization expense | 19,199 | 19,569 | 58,477 | 57,108 | ||||||||||||||||||||||
EBITDA | $ | 58,961 | $ | 46,242 | $ | 168,384 | $ | 140,415 | ||||||||||||||||||
Loss on sale of foam assets | - | - | 1,014 | - | ||||||||||||||||||||||
Expenses associated with Metso litigation | - | - | 1,948 | - | ||||||||||||||||||||||
Adjusted EBITDA | $ | 58,961 | $ | 46,242 | $ | 171,346 | $ | 140,415 |
CONTACT:
Clearwater Paper Corporation
(News media)
Matt Van
Vleet, 509-344-5912
or
(CFO)
John Hertz, 509-344-5905
or
(Investors)
Sean
Butson, 509-344-5906 (IR Sense)