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
23, 2013
_________________
CLEARWATER
PAPER CORPORATION
(Exact
name of registrant as specified in its charter)
_________________
Delaware |
001-34146 |
20-3594554 |
(State or other jurisdiction |
(Commission File Number) |
(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 23, 2013, Clearwater Paper Corporation announced its results of operations and financial condition for the quarter ended September 30, 2013. A copy of the press release containing this announcement is furnished as Exhibit 99.1 hereto. In addition, a copy of the Company’s Third Quarter 2013 Supplemental Information is furnished as Exhibit 99.2 hereto.
The information furnished in this Form 8-K, including Exhibits 99.1 and 99.2, 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 23, 2013: CLEARWATER PAPER REPORTS THIRD QUARTER 2013 RESULTS |
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99.2 |
Clearwater Paper Corporation Third Quarter 2013 Supplemental Information, dated October 23, 2013 |
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 23, 2013 |
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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 23, 2013: CLEARWATER PAPER REPORTS THIRD QUARTER 2013 RESULTS |
99.2 |
Clearwater Paper Corporation Third Quarter 2013 Supplemental Information, dated October 23, 2013 |
Exhibit 99.1
Clearwater Paper Reports Third Quarter 2013 Results
SPOKANE, Wash.--(BUSINESS WIRE)--October 23, 2013--Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the third quarter of 2013.
The company reported net sales of $487.8 million for the third quarter of 2013, compared to net sales of $480.2 million for the third quarter of 2012. Net earnings prepared in conformity with generally accepted accounting principles, or GAAP, for the third quarter of 2013 were $13.3 million, or $0.60 per diluted share, impacted significantly by $17.5 million of planned major maintenance costs in the quarter, compared to net earnings of $19.1 million, or $0.80 per diluted share, for the third quarter of 2012. The 2013 third quarter GAAP net earnings included a $6.9 million non-core operating net benefit comprised of $0.2 million of after-tax expense associated with the mark-to-market impact of directors’ equity-based compensation, $1.1 million of after-tax expense associated with the announced closing of the company’s Thomaston, Ga., converting and distribution facility, a $4.7 million benefit from the release of reserves for uncertain tax positions relating to state tax credits and a $3.5 million benefit resulting from additional Cellulosic Biofuel Producer Credits, or CBPC, claimed and agreed upon as part of our ongoing IRS audit. Excluding those items, third quarter 2013 adjusted net earnings were $6.4 million, or $0.29 per diluted share, compared to third quarter 2012 adjusted net earnings of $21.1 million, or $0.89 per diluted share.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, was $41.0 million for the third quarter of 2013. Adjusted EBITDA of $43.1 million was down 29.1% compared to third quarter 2012 Adjusted EBITDA of $60.8 million. The decrease in EBITDA and Adjusted EBITDA was due primarily to $17.5 million of planned major maintenance costs.
"Our pulp and paperboard segment continues to report excellent results with strong pricing and its second biggest shipment quarter ever, while our consumer products business experienced increased price competition from both brands and private label during the quarter," said president and chief executive officer Linda Massman. "Despite the heightened competition, our TAD sales are progressing and we believe we will achieve our TAD expansion goals."
During the third quarter, the company completed its $50 million accelerated stock buyback program (“ASB Program”), which was part of the company’s previously announced $100 million share buyback program. Under the ASB Program, 212,896 incremental shares were delivered to the company in the third quarter of 2013, for a total of approximately 1.04 million shares at an average cost of $48.10 per share. The company also separately repurchased an additional 327,315 shares of common stock in the third quarter through open market transactions at a total cost of $15.8 million, or $48.27 per share. Since announcing the $100 million buyback program in January 2013, the company has repurchased approximately 1.6 million shares for $75.8 million through September 30, 2013, and expects to use the remaining $24.2 million balance of the program by the end of October 2013.
THIRD QUARTER 2013 SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $292.9 million for the third quarter of 2013, consistent with third quarter 2012 net sales of $293.0 million. GAAP operating income decreased to $13.4 million from $18.5 million in the prior year period, driven by transition costs of $2.2 million associated with the company’s TAD expansion and $1.7 million of expenses related to the announced closure of the company’s Thomaston facility, as well as higher energy and packaging costs and increased depreciation year over year.
Pulp and Paperboard
Net sales in the Pulp and Paperboard segment were $194.9 million for the third quarter of 2013, up 4.1% compared to third quarter 2012 net sales of $187.3 million. The increase was primarily due to higher paperboard volumes driven by strong market backlogs and higher pricing in the third quarter of 2013 compared to the third quarter of 2012. GAAP operating income for the quarter decreased $18.1 million to $16.3 million, compared to $34.4 million for the third quarter of 2012, primarily due to $17.5 million of costs related to the company’s planned major maintenance at its Lewiston paperboard facility, as well as higher energy and operating expenses.
Taxes
The company’s GAAP tax rate for the third quarter was a benefit of 63.7% compared to an expense of 40.2% in the third quarter of 2012. Adjusting for the CBPC tax credit conversion and the released reserves, the third quarter 2013 tax rate was approximately 37%. The company expects its annual GAAP and adjusted tax rates to be approximately 1% and 39%, respectively, for 2013.
Note Regarding Use of Non-GAAP Financial Measures
In this press release, the company presents its results for the third quarters of 2013 and 2012, including EBITDA, Adjusted EBITDA, adjusted net earnings and adjusted net earnings per diluted share excluding special items. These amounts are not in accordance with GAAP, and accordingly reconciliations to net earnings and net earnings per diluted share as determined in accordance with GAAP are included at the end of this press release. The company presents these amounts because management believes they assist investors and analysts in comparing the company’s performance across reporting periods on a consistent basis by excluding items that the company does not believe are indicative of its core operating performance.
CONFERENCE CALL INFORMATION
A live audio webcast and conference call will be held today, Wednesday, October 23, 2013 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 the amount and timing of the company’s TAD tissue sales, price competition, Adjusted EBITDA target for 2014, the expected completion of the company’s $100 million common stock repurchase program, and the company’s GAAP and adjusted tax rates for 2013. 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, customer acceptance and timing of purchases of the company’s new TAD products and capacity; competitive pricing pressures for the company’s products, including as a result of increased capacity as additional manufacturing facilities are operated by the company’s competitors; manufacturing or operating disruptions, including equipment malfunction and damage to the company’s manufacturing facilities; difficulties with the optimization and realization of the benefits expected from the company’s new TAD paper machine and converting lines at North Carolina; the loss of business from a significant customer; changes in the cost and availability of wood fiber and wood pulp; changes in transportation costs and disruptions in transportation services; changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs; changes in customer product preferences and competitors' product offerings; increased supply and pricing pressures resulting from increasing Asian paper production capabilities; changes in the U.S. and international economies and in general economic conditions in the regions and industries in which the company operates; cyclical industry conditions; reliance on a limited number of third-party suppliers for raw materials; labor disruptions; inability to successfully implement the company’s expansion strategies; limitations on stock repurchases pursuant to Rule 10b-18 under the Securities Exchange Act of 1934; the company’s qualification to retain, or ability to utilize, tax credits associated with alternative fuels or cellulosic biofuels and the tax treatment associated with receipt of such credits; 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 | |||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited (Dollars in thousands - except per-share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 487,845 | 100 | % | $ | 480,233 | 100 | % | $ | 1,419,671 | 100 | % | $ | 1,411,603 | 100 | % | |||||||||||||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | (441,237 | ) | 90 | % | (409,822 | ) | 85 | % | (1,269,967 | ) | 89 | % | (1,211,444 | ) | 86 | % | |||||||||||||||||||||||||||||||
Selling, general and administrative expenses | (27,766 | ) | 6 | % | (30,649 | ) | 6 | % | (88,665 | ) | 6 | % | (90,252 | ) | 6 | % | |||||||||||||||||||||||||||||||
Total operating costs and expenses | (469,003 | ) | 96 | % | (440,471 | ) | 92 | % | (1,358,632 | ) | 96 | % | (1,301,696 | ) | 92 | % | |||||||||||||||||||||||||||||||
Income from operations | 18,842 | 4 | % | 39,762 | 8 | % | 61,039 | 4 | % | 109,907 | 8 | % | |||||||||||||||||||||||||||||||||||
Interest expense, net | (10,708 | ) | 2 | % | (7,900 | ) | 2 | % | (32,784 | ) | 2 | % | (26,775 | ) | 2 | % | |||||||||||||||||||||||||||||||
Debt retirement costs | - | - | - | - | (17,058 | ) | 1 | % | - | - | |||||||||||||||||||||||||||||||||||||
Earnings before income taxes | 8,134 | 2 | % | 31,862 | 7 | % | 11,197 | 1 | % | 83,132 | 6 | % | |||||||||||||||||||||||||||||||||||
Income tax benefit (provision) | 5,183 | 1 | % | (12,798 | ) | 3 | % | 12,896 | 1 | % | (38,853 | ) | 3 | % | |||||||||||||||||||||||||||||||||
Net earnings | $ | 13,317 | 3 | % | $ | 19,064 | 4 | % | $ | 24,093 | 2 | % | $ | 44,279 | 3 | % | |||||||||||||||||||||||||||||||
Net earnings per common share: | |||||||||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.60 | $ | 0.82 | $ | 1.08 | $ | 1.90 | |||||||||||||||||||||||||||||||||||||||
Diluted | 0.60 | 0.80 | 1.07 | 1.87 | |||||||||||||||||||||||||||||||||||||||||||
Average shares outstanding (in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||
Basic | 22,027 | 23,361 | 22,389 | 23,337 | |||||||||||||||||||||||||||||||||||||||||||
Diluted | 22,228 | 23,700 | 22,565 | 23,645 | |||||||||||||||||||||||||||||||||||||||||||
Clearwater Paper Corporation | ||||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||
Unaudited (Dollars in thousands) | ||||||||||||||||||||
September 30, | December 31, | |||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash | $ | 20,929 | $ | 12,579 | ||||||||||||||||
Restricted cash | 1,500 | - | ||||||||||||||||||
Short-term investments | 89,000 | 20,000 | ||||||||||||||||||
Receivables, net | 168,519 | 154,143 | ||||||||||||||||||
Taxes receivable | 8,380 | 20,828 | ||||||||||||||||||
Inventories | 253,440 | 231,466 | ||||||||||||||||||
Deferred tax assets | 28,356 | 17,136 | ||||||||||||||||||
Prepaid expenses | 8,210 | 12,314 | ||||||||||||||||||
Total current assets | 578,334 | 468,466 | ||||||||||||||||||
Property, plant and equipment, net | 872,762 | 877,377 | ||||||||||||||||||
Goodwill | 229,533 | 229,533 | ||||||||||||||||||
Intangible assets, net | 42,467 | 47,753 | ||||||||||||||||||
Other assets, net | 10,255 | 10,327 | ||||||||||||||||||
TOTAL ASSETS | $ | 1,733,351 | $ | 1,633,456 | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 204,081 | $ | 165,596 | ||||||||||||||||
Current liability for pensions and other postretirement employee benefits | 9,137 | 9,137 | ||||||||||||||||||
Total current liabilities | 213,218 | 174,733 | ||||||||||||||||||
Long-term debt | 650,000 | 523,933 | ||||||||||||||||||
Liability for pensions and other postretirement employee benefits | 187,410 | 204,163 | ||||||||||||||||||
Other long-term obligations | 51,021 | 50,910 | ||||||||||||||||||
Accrued taxes | 68,164 | 78,699 | ||||||||||||||||||
Deferred tax liabilities | 66,253 | 60,124 | ||||||||||||||||||
Stockholders' equity, excluding accumulated other comprehensive loss, net of tax | 605,789 | 656,587 | ||||||||||||||||||
Accumulated other comprehensive loss, net of tax | (108,504 | ) | (115,693 | ) | ||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,733,351 | $ | 1,633,456 | ||||||||||||||||
Clearwater Paper Corporation | ||||||||||||||||||||
Consolidated Statements of Cash Flows | ||||||||||||||||||||
Unaudited (Dollars in thousands) | ||||||||||||||||||||
Nine Months Ended
September 30, |
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2013 | 2012 | |||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||
Net earnings | $ | 24,093 | $ | 44,279 | ||||||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 67,584 | 58,477 | ||||||||||||||||||
Deferred tax (benefit) provision | (9,678 | ) | 13,257 | |||||||||||||||||
Equity-based compensation expense | 7,758 | 7,681 | ||||||||||||||||||
Employee benefit plans | 7,801 | 6,697 | ||||||||||||||||||
Deferred issuance costs and discounts on long-term debt | 4,490 | 1,508 | ||||||||||||||||||
Disposal of plant and equipment, net | 35 | 1,501 | ||||||||||||||||||
Changes in working capital, net | 47 | 51,434 | ||||||||||||||||||
Changes in taxes receivable, net | 12,448 | (1,918 | ) | |||||||||||||||||
Excess tax benefits from equity-based payment arrangements | - | (9,193 | ) | |||||||||||||||||
Changes in non-current accrued taxes, net | (10,535 | ) | 4,161 | |||||||||||||||||
Funding of qualified pension plans | (12,611 | ) | (17,625 | ) | ||||||||||||||||
Other, net | 108 | 324 | ||||||||||||||||||
Net cash provided by operating activities | 91,540 | 160,583 | ||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||||
Changes in short-term investments, net | (69,000 | ) | 18,001 | |||||||||||||||||
Additions to plant and equipment | (54,400 | ) | (155,365 | ) | ||||||||||||||||
Proceeds from sale of assets | - | 1,035 | ||||||||||||||||||
Net cash used for investing activities | (123,400 | ) | (136,329 | ) | ||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||||
Proceeds from long-term debt | 275,000 | - | ||||||||||||||||||
Repayment of long-term debt | (150,000 | ) | - | |||||||||||||||||
Purchase of treasury stock | (75,783 | ) | (9,355 | ) | ||||||||||||||||
Payments for long-term debt issuance costs | (4,834 | ) | (2 | ) | ||||||||||||||||
Payment of tax withholdings on equity-based payment arrangements | (4,173 | ) | (12,965 | ) | ||||||||||||||||
Excess tax benefits from equity-based payment arrangements | - | 9,193 | ||||||||||||||||||
Net cash provided by (used for) financing activities | 40,210 | (13,129 | ) | |||||||||||||||||
Increase in cash | 8,350 | 11,125 | ||||||||||||||||||
Cash at beginning of period | 12,579 | 8,439 | ||||||||||||||||||
Cash at end of period | $ | 20,929 | $ | 19,564 | ||||||||||||||||
Clearwater Paper Corporation | |||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||
Unaudited (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||||
Segment net sales: | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | $ | 292,935 | 60 | % | $ | 292,959 | 61 | % | $ | 867,545 | 61 | % | $ | 853,911 | 60 | % | |||||||||||||||||||||||||||||||
Pulp and Paperboard | 194,910 | 40 | % | 187,274 | 39 | % | 552,126 | 39 | % | 557,692 | 40 | % | |||||||||||||||||||||||||||||||||||
Total segment net sales | $ | 487,845 | 100 | % | $ | 480,233 | 100 | % | $ | 1,419,671 | 100 | % | $ | 1,411,603 | 100 | % | |||||||||||||||||||||||||||||||
Operating income: | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer Products | $ | 13,445 | 71 | % | $ | 18,453 | 46 | % | $ | 38,384 | 63 | % | $ | 70,420 | 64 | % | |||||||||||||||||||||||||||||||
Pulp and Paperboard | 16,289 | 86 | % | 34,449 | 87 | % | 58,614 | 96 | % | 78,108 | 71 | % | |||||||||||||||||||||||||||||||||||
29,734 | 52,902 | 96,998 | 148,528 | ||||||||||||||||||||||||||||||||||||||||||||
Corporate | (10,892 | ) | 58 | % | (13,140 | ) | 33 | % | (35,959 | ) | 59 | % | (38,621 | ) | 35 | % | |||||||||||||||||||||||||||||||
Income from operations | $ | 18,842 | 100 | % | $ | 39,762 | 100 | % | $ | 61,039 | 100 | % | $ | 109,907 | 100 | % | |||||||||||||||||||||||||||||||
Clearwater Paper Corporation | ||||||||||||||||||||||||
Reconciliation of Consolidated Net Earnings to EBITDA and Adjusted EBITDA | ||||||||||||||||||||||||
Unaudited (Dollars in thousands) | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
Net earnings | $ | 13,317 | $ | 19,064 | $ | 24,093 | $ | 44,279 | ||||||||||||||||
Add back: | ||||||||||||||||||||||||
Interest expense, net1 | 10,708 | 7,900 | 49,842 | 26,775 | ||||||||||||||||||||
Income tax (benefit) provision | (5,183 | ) | 12,798 | (12,896 | ) | 38,853 | ||||||||||||||||||
Depreciation and amortization expense | 22,180 | 19,199 | 67,584 | 58,477 | ||||||||||||||||||||
EBITDA2 | $ | 41,022 | $ | 58,961 | $ | 128,623 | $ | 168,384 | ||||||||||||||||
Directors' equity-based compensation expense | 361 | 1,801 | 2,692 | 1,706 | ||||||||||||||||||||
Costs associated with announced Thomaston facility closure | 1,717 | - | 2,913 | - | ||||||||||||||||||||
Expenses associated with Metso litigation | - | - | - | 1,948 | ||||||||||||||||||||
Loss on sale of foam assets | - | - | - | 1,014 | ||||||||||||||||||||
Adjusted EBITDA3 | $ | 43,100 | $ | 60,762 | $ | 134,228 | $ | 173,052 | ||||||||||||||||
1 | Interest expense, net for the nine months ended September 30, 2013 includes debt retirement costs of $17.1 million. | ||
2 | EBITDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. The most directly comparable GAAP measure is net earnings. EBITDA is net earnings adjusted for net interest expense (including debt retirement costs), income taxes, and depreciation and amortization. It should not be considered as an alternative to net earnings computed under GAAP. | ||
3 | Adjusted EBITDA excludes the impact of the items listed that we do not believe are indicative of our core operating performance. | ||
Clearwater Paper Corporation | ||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||
Unaudited (Dollars in thousands, except per-share amounts) | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
GAAP net earnings | $ | 13,317 | $ | 19,064 | $ | 24,093 | $ | 44,279 | ||||||||||||||||
Special items, after-tax1: |
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Loss on sale of foam assets | - | - | - | 658 | ||||||||||||||||||||
Expenses associated with Metso litigation | - | - | - | 1,269 | ||||||||||||||||||||
Debt retirement costs | - | - | 10,781 | - | ||||||||||||||||||||
Directors' equity-based compensation expense | 221 | 1,018 | 1,709 | 954 | ||||||||||||||||||||
Costs associated with announced Thomaston facility closure | 1,052 | - | 1,795 | - | ||||||||||||||||||||
Discrete tax items related to release of uncertain tax positions | (4,659 | ) | - | (4,659 | ) | - | ||||||||||||||||||
Discrete tax items related to AFMTC/CBPC credit conversions | (3,495 | ) | 1,008 | (13,261 | ) | 6,704 | ||||||||||||||||||
Adjusted net earnings2 | $ | 6,436 | $ | 21,090 | $ | 20,458 | $ | 53,864 | ||||||||||||||||
GAAP net earnings per diluted share | $ | 0.60 | $ | 0.80 | $ | 1.07 | $ | 1.87 | ||||||||||||||||
Special items, after-tax1: |
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Loss on sale of foam assets | - | - | - | 0.03 | ||||||||||||||||||||
Expenses associated with Metso litigation | - | - | - | 0.05 | ||||||||||||||||||||
Debt retirement costs | - | - | 0.48 | - | ||||||||||||||||||||
Directors' equity-based compensation expense | 0.01 | 0.04 | 0.08 | 0.04 | ||||||||||||||||||||
Costs associated with announced Thomaston facility closure | 0.05 | - | 0.08 | - | ||||||||||||||||||||
Discrete tax items related to release of uncertain tax positions | (0.21 | ) | - | (0.21 | ) | - | ||||||||||||||||||
Discrete tax items related to AFMTC/CBPC credit conversions | (0.16 | ) | 0.04 | (0.59 | ) | 0.29 | ||||||||||||||||||
Adjusted net earnings per diluted share2 | $ | 0.29 | $ | 0.89 | $ | 0.91 | $ | 2.28 | ||||||||||||||||
1 | Tax effect was calculated using the estimated annual effective tax rate for the period presented. | ||
2 | Adjusted net earnings and Adjusted net earnings per diluted share exclude the impact of the items listed that we do not believe are indicative of our core operating performance. | ||
CONTACT:
News media:
Clearwater Paper Corporation
Matt Van
Vleet, 509-344-5912
or
John Hertz (CFO), 509-344-5905
or
Investors:
IR
Sense
Sean Butson, 509-344-5906
Exhibit 99.2
Clearwater Paper Corporation Third Quarter 2013 Supplemental Information Linda Massman President, Chief Executive Officer and Director John Hertz Senior Vice President, Finance and Chief Financial Officer
Forward-Looking Statements This supplemental information contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding outlook for Q4 2013, production, product volumes shipped, product pricing, pulp costs, wood fiber costs and supply, chemical costs, transportation costs, energy costs including natural gas, cost and timing of major maintenance and repairs, corporate expenses, production and shipments from our new tissue machine and converting lines in Shelby, North Carolina and our Pro Forma Quarterly Run Rate. These forward-looking statements are based on management’s current expectations, estimates, assumptions and projections that are subject to change. Our actual results of operations may differ materially from those expressed or implied by the forward-looking statements contained in this presentation. Important factors that could cause or contribute to such differences include the risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission, as well as the following: •customer acceptance and timing of purchases of our new through-air-dried (TAD) products and capacity; •competitive pricing pressures for our products, including as a result of increased capacity as additional manufacturing facilities are operated by our competitors; •manufacturing or operating disruptions, including equipment malfunction and damage to our manufacturing facilities; •difficulties with the optimization and realization of the benefits expected from our new TAD paper machine and converting lines in Shelby, North Carolina; •increased dependence on wood pulp; •changes in the cost and availability of wood fiber and wood pulp; •the loss of business from a significant customer; •changes in transportation costs and disruptions in transportation services; •changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs; •changes in customer product preferences and competitors' product offerings; •changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate; •increased supply and pricing pressures resulting from increasing Asian paper production capabilities; •cyclical industry conditions; •reliance on a limited number of third-party suppliers for raw materials; •labor disruptions; •our ability to generate cash; and •inability to successfully implement our expansion strategies. Forward-looking statements contained in this presentation present management’s views only as of the date of this presentation. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.1
Financial Summary (Unaudited) 1 Non-GAAP measure – See definition and reconciliation to GAAP. 2 Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'1320122013Net sales$ 457,798$ 473,572$ 480,233$ 462,701$ 460,824$ 471,002$ 487,845$ 1,411,603$ 1,419,671Adjusted gross profit1$ 54,722$ 76,040$ 70,411$ 66,273$ 46,798$ 57,494$ 48,325$ 201,173$ 152,617Adjusted gross profit margin12.0%16.1%14.7%14.3%10.2%12.2%9.9%14.3%10.8%Adjusted selling, general and administrative expense 1 ($28,501) ($29,249) ($28,848) ($31,059) ($30,660) ($27,908) ($27,405) ($86,598) ($85,973) Adjusted operating income (loss) 1 $ 26,221 $ 46,791 $ 41,563 $ 35,214 $ 16,138 $ 29,586 $ 20,920 $ 114,575 $ 66,644 Consumer Products 26,271 26,710 18,45322,92710,30715,82815,16271,43441,297Pulp and Paperboard11,65832,00134,44925,80217,55324,77216,28978,10858,614Corporate (11,708)(11,920)(11,339)(13,515)(11,722)(11,014)(10,531)(34,967)(33,267)Interest expense, net($9,728)($9,147)($7,900)($7,021)($10,982)($11,094)($10,708)($26,775)($32,784)Adjusted income tax provision1($6,692)($14,670)($12,573)($8,800)($2,713)($6,913)($3,776)($33,936)($13,402)Adjusted net earnings1$ 9,801$ 22,974$ 21,090$ 19,393$ 2,443$ 11,579$ 6,436$ 53,864$ 20,458Depreciation and amortization expense19,54819,73019,19920,85622,15123,25322,18058,47767,584Adjusted EBITDA1$ 45,769$ 66,521$ 60,762$ 56,070$ 38,289$ 52,839$ 43,100$ 173,052$ 134,228Consumer Products39,43639,96231,72837,78226,39932,85831,164111,12690,421Pulp and Paperboard 17,66938,01239,97431,36823,21230,55022,04795,65575,809Corporate(11,336)(11,453)(10,940)(13,080)(11,322)(10,569)(10,111)(33,729)(32,002)Adjusted EBITDA margin 110.0% 14.0% 12.7% 12.1% 8.3% 11.2% 8.8% 12.3% 9.5% Diluted adjusted net earnings per common share1$ 0.42$ 0.97$ 0.89$ 0.82$ 0.11$ 0.51$ 0.29$ 2.28$ 0.91Debt to rolling four quarter total Adjusted EBITDA12.6 2.4 2.3 2.3 2.9 3.1 3.4 2.3 3.4 (Dollars in thousands - except per-share amounts)Nine Months Ended September 30,
$30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000Adj. EBITDA1(000's)Q3’13 vs. Q2’13 Consolidated Adjusted EBITDA1 Bridge 1 Non-GAAP measure – See definition and reconciliation to GAAP. Price/Mix Higher paperboard and tissue pricing, partially offset by higher non-retail tissue mix Volume Higher non-retail tissue and paperboard shipments Wood Fiber Slightly lower wood prices External Pulp Higher pulp prices CPD Transition Costs Improved converting and paper machine efficiencies and reduced internal transportation costs Packaging/ Operating Supplies Higher pricing on corrugated boxes and manufacturing materials Wages & Benefits Higher workers’ compensation costs Maintenance Outage Scheduled Idaho outage Arkansas Q2 Disruptions Mitigation of prior operational disruptions 3
$30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000Adj. EBITDA1(000's)Q3’13 vs. Q3’12 Consolidated Adjusted EBITDA1 Bridge 1 Non-GAAP measure – See definition and reconciliation to GAAP. Price/Mix Increased pricing on retail and non-retail tissue and paperboard Volume Lower tissue shipments, partially offset by higher paperboard shipments TAD Expansion EBITDA contribution from TAD Expansion Wood Fiber Lower wood prices External Pulp Higher pulp prices CPD Transition Costs Higher internal transportation and changeover costs Chemicals Price increases for polyethylene and chemicals Packaging Supplies Price increases for corrugated boxes and poly wrapping Wages and Benefits Increased headcount, wage increases and benefit costs Maintenance Outage Scheduled Idaho outage SG&A Lower corporate expenses 4
Key Segment Results - Consumer Products (Unaudited) 5 1 Includes away-from-home (AFH), contract, machine-glazed (MG) and parent roll tissue products. 2 Includes retail, AFH, contract and MG tissue case products. 3 Non-GAAP measure – See definition and reconciliation to GAAP. Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'13 Shipments Non-Retail (short tons)153,343 60,481 64,731 59,100 55,235 57,012 61,222 Retail (short tons) 75,425 72,497 74,117 71,633 77,361 75,045 72,427 Total Tissue Tons128,768 132,978 138,848 130,733 132,596 132,057 133,649 Converted Products (cases in thousands)213,117 13,505 13,752 13,302 13,781 14,021 13,990 Sales PriceNon-Retail ($/short ton)1$ 1,470$ 1,486$ 1,450$ 1,448$ 1,432$ 1,475$ 1,504Retail ($/short ton) 2,645 2,665 2,687 2,723 2,661 2,740 2,773 Total Tissue$ 2,158$ 2,129$ 2,110$ 2,147$ 2,149$ 2,194$ 2,192Adjusted EBITDA3 ($ in millions)$ 39,436$ 39,962$ 31,728$ 37,782$ 26,399$ 32,858$ 31,164Adj. EBITDA Margin314.2%14.1%10.8%13.5%9.3%11.3%10.6%
Retail 57% MG 16% AFH 6% Parent Rolls 18% Other 3% CLW Q2’13 By Segment (% of Tons) Clearwater Tissue Shipments and U.S. Retail Tissue Market Retail 54% MG 14% AFH 6% Parent Rolls 22% Other 4% CLW Q3’13 By Segment (% of Tons) U.S. Retail Tissue Market Category Private Label Brands Total Total Retail Tissue Share (Equivalent Cases) 27% 73% 100% % Change YTD ‘13 vs. YTD ‘12 7.4% 1.8% 3.2% Data Source: IRI Worldwide US Multi-outlet for Total Retail. 6
Current Quarter vs Prior Quarter $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000Adj. EBITDA1(000's)Q3’13 vs. Q2’13 Consumer Products Adjusted EBITDA1 Bridge 1 Non-GAAP measure – See definition and reconciliation to GAAP. Price/Mix Favorable pricing on both retail and non-retail tissue, more than offset by an unfavorable mix change to non-retail shipments Volume Increased non-retail shipment tons External Pulp Higher pulp prices CPD Transition Costs Improved converting and paper machine efficiencies and reduced internal transportation costs Packaging/ Operating Supplies Higher pricing on corrugated boxes and manufacturing materials Wages & Benefits Higher workers’ compensation costs 7
Key Segment Results – Pulp and Paperboard (Unaudited) 1 Non-GAAP measure – See definition and reconciliation to GAAP. Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'13 Shipments Paperboard (short tons) 182,198 193,285 195,097 190,339 186,350 190,518 199,408 Sales Price Paperboard ($/short ton)$ 968$ 975$ 948$ 936$ 935$ 946$ 973Adjusted EBITDA1 ($ in millions)$ 17,669$ 38,012$ 39,974$ 31,368$ 23,212$ 30,550$ 22,047Adj. EBITDA Margin110.0%20.2%21.6%17.6%13.3%17.0%11.3% 8
Clearwater Paperboard Shipments and U.S. Paperboard Market U.S. Paperboard Production Category Clearwater Other Total Domestic SBS1 Market Share 13% 87% Folding 18% 82% Food Service 2 14% 86% Liquid Packaging 6% 94% Data Source: American Forest and Paper Association. Based on domestic production only. Folding 59% Food Service 2 30% Liquid Pkg 11% CLW Q3’13 By Segment (% of Tons) Folding 57% Food Service 2 32% Liquid Pkg 11% CLW Q2’13 By Segment (% of Tons) 1 Solid Bleached Sulfate. 2 Food Service includes Cup, Plate, Dish and Tray products. 9
Current Quarter vs Prior Quarter $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000Adj. EBITDA1(000's)Q3’13 vs. Q2’13 Pulp and Paperboard Adjusted EBITDA1 Bridge 1 Non-GAAP measure – See definition and reconciliation to GAAP. Price/Mix Higher pricing due to better product mix and price increases Volume Higher due to seasonality Wood Fiber Lower wood prices Maintenance Outage Scheduled Idaho outage Arkansas Q2 Disruptions Mitigation of prior operational disruptions 10
Fourth Quarter 2013 Outlook (Compared to Q3’13)1 Consumer Products Pulp and Paperboard Corporate Production volumes Paper and converting production up (1-3% higher) No maintenance outage (1-2% higher) Shipment volumes Slightly lower retail cases and non-retail tons (1-3% lower) Lower due to seasonality (3-5% lower) Price/Mix Increased TAD bathroom tissue mix (0-2% higher) Higher due to previously announced price increases (0-1% higher) Pulp/Wood Fiber costs Slightly lower costs Stable Chemical costs Stable Stable Transportation costs Slightly lower costs Stable Energy costs Stable Stable Maintenance & Repairs Stable Lower due to no Idaho maintenance outage ($17.5M) SG&A Stable Stable Q4 run rate of $10M-$12M 1 This information is based upon management’s current expectations and estimates, which are in part based on market and industry data. Many factors are outside the control of management, including particularly input costs for commodity products, and actual results may differ materially from the information set forth above. See “Forward-Looking Statements” on page 1. TAD Transition and other Cost Reductions ($4M) 11
$43 $8-$10$2$18$3-$7$74-$80 $20 $30 $40 $50 $60 $70 $80Q3'13 Adj.EBITDATAD ExpansionShipments(incremental toQ3'13 baselineTAD TissueEBITDA of $4M)TAD TransitionCostsIdaho OutageCostsCost SavingsProgramsPro FormaQuarterlyRun Rate(Expected inQ3'14)Adj. EBITDA 2(Millions)21Bridge to Pro Forma $75 Million Quarterly Run Rate1 1 Assumes no change in prices or input costs from Q3’13. This information is based upon management’s current expectations and estimates, which are in part based on market and industry data. Many factors are outside the control of management, including particularly input costs for commodity products, and actual results may differ materially from the information set forth above. See “Forward-Looking Statements” on page 1. 2 Non-GAAP measure – See definition and reconciliation to GAAP. 3 In September 2012 we announced a $300 million adjusted EBITDA target for 2014, which was based on 2011 prices and input costs. This table shows percentage changes in certain price and input costs between 2011 and Q3’13. Price & Unit Input Costs Q3’13 vs. 2011 % Change3 Paperboard Pricing/Mix 0.3% External Pulp 8.3% Wood Fiber 6.8% Natural Gas 8.1% Chemicals 9.9% Diesel Fuel 1.9% •Thomaston closure $2-$3M •Paper machine projects $1-$2M •Arkansas recovery upgrade $.5-$1M TAD Expansion Q3’13 Q4’13 Q1’14 Q2’14 Q3’14 Expected EBITDA Ramp $4 $7 $9 $10 $12 •No Outage in ‘14 •Go forward “straightline” quarterly outage run rate of $3M 12
Adjusted Gross Profit & Adjusted SG&A Reconciliation of Non-GAAP Financial Measures (Unaudited) 1 Gross profit defined as net sales minus cost of sales. 2 Adjusted gross profit and adjusted selling, general and administrative expenses excludes the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands) Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'1320122013Gross profit 1 $ 54,722$ 75,026$ 70,411$ 66,273$ 46,615$ 56,481$ 46,608$ 200,159$ 149,704 Costs associated with announced Thomaston facility closure- - - - 183 1,013 1,717 - 2,913 Loss on sale of foam assets- 1,014 - - - - - 1,014 - Adjusted gross profit2$ 54,722$ 76,040$ 70,411$ 66,273$ 46,798$ 57,494$ 48,325$ 201,173$ 152,617Selling, general and administrative expenses($29,074)($30,529)($30,649)($30,793)($34,132)($26,767)($27,766)($90,252)($88,665) Expenses associated with Metso litigation990 958 - 71 - - - 1,948 - Directors' equity-based compensation (benefit) expense(417) 322 1,801 (337) 3,472 (1,141) 361 1,706 2,692 Adjusted selling, general and administrative expenses2($28,501)($29,249)($28,848)($31,059)($30,660)($27,908)($27,405)($86,598)($85,973)Nine Months Ended September 30, 13
Segment Adjusted Operating Income (Loss) Reconciliation of Non-GAAP Financial Measures (Unaudited) 1 Adjusted operating income (loss) excludes the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands)Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'1320122013Consumer Products Operating income$ 26,271$ 25,696$ 18,453$ 22,927$ 10,124$ 14,815$ 13,445$ 70,420$ 38,384 Costs associated with announced Thomaston facility closure- - - - 183 1,013 1,717 - 2,913 Loss on sale of foam assets- 1,014 - - - - - 1,014 - Adjusted Consumer Products operating income1$ 26,271$ 26,710$ 18,453$ 22,927$ 10,307$ 15,828$ 15,162$ 71,434$ 41,297Pulp and Paperboard Operating Income$ 11,658$ 32,001$ 34,449$ 25,802$ 17,553$ 24,772$ 16,289$ 78,108$ 58,614 Adjusted Pulp and Paperboard operating income1$ 11,658$ 32,001$ 34,449$ 25,802$ 17,553$ 24,772$ 16,289$ 78,108$ 58,614Corporate Operating loss($12,281)($13,200)($13,140)($13,249)($15,194)($9,873)($10,892)($38,621)($35,959) Expenses associated with Metso litigation990 958 - 71 - - - 1,948 - Directors' equity-based compensation (benefit) expense(417) 322 1,801 (337) 3,472 (1,141) 361 1,706 2,692 Adjusted Corporate operating loss1($11,708)($11,920)($11,339)($13,515)($11,722)($11,014)($10,531)($34,967)($33,267)Nine Months Ended September 30, 14
Adjusted Net Earnings & Diluted Adjusted Earnings per common share Reconciliation of Non-GAAP Financial Measures (Unaudited) 1 All non-tax items are tax effected at the expected annual rate for that period. 2 Adjusted net earnings and Diluted adjusted net earnings per common share exclude the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands - except per-share amounts)Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'1320122013 GAAP net earnings (loss)$ 3,726$ 21,489$ 19,064$ 19,852($882)$11,658$ 13,317$ 44,279$ 24,093 Special items, after tax:1 Loss on sale of foam assets- 658 - - - - - 658 - Expenses associated with Metso litigation647 622 - 41 - - - 1,269 - Debt retirement costs- - - - 10,781 - - - 10,781 Directors' equity-based compensation (benefit) expense(273) 209 1,018 (194) 2,194 (706) 221 954 1,709 Costs associated with announced Thomaston facility closure- - - - 116 627 1,052 - 1,795 Discrete tax items related to release of uncertain tax positions- - - - - - (4,659) - (4,659) Discrete tax items related to credit conversions5,700 (4) 1,008 (306) (9,766) - (3,495) 6,704 (13,261) Adjusted net earnings2$ 9,801$ 22,974$ 21,090$ 19,393$ 2,443$ 11,579$ 6,436$ 53,864$ 20,458Diluted net earnings (loss) per common share$ 0.16$ 0.91$ 0.80$ 0.84($0.04)$0.52$ 0.60$ 1.87$ 1.07 Special items, after tax:1 Loss on sale of foam assets- 0.03 - - - - - 0.03 - Expenses associated with Metso litigation0.03 0.03 - - - - - 0.05 - Debt retirement costs- - - - 0.47 - - - 0.48 Directors' equity-based compensation (benefit) expense(0.01) 0.01 0.04 (0.01) 0.10 (0.03) 0.01 0.04 0.08 Costs associated with announced Thomaston facility closure- - - - 0.01 0.03 0.05 - 0.08 Discrete tax items related to release of uncertain tax positions- - - - - - (0.21) - (0.21) Discrete tax items related to credit conversions0.24 - 0.04 (0.01) (0.43) - (0.16) 0.29 (0.59) Diluted adjusted net earnings per common share2$ 0.42$ 0.97$ 0.89$ 0.82$ 0.11$ 0.51$ 0.29$ 2.28$ 0.91Nine Months Ended September 30, 15
Adjusted Income Tax Provision Reconciliation of Non-GAAP Financial Measure (Unaudited) 1 Adjusted income tax provision excludes the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands)Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'1320122013 GAAP income tax (provision) benefit($12,194)($13,861)($12,798)($8,607)$14,675($6,962)$ 5,183($38,853)$12,896 Special items, tax impact: Loss on sale of foam assets- (356) - - - - - (356) - Expenses associated with Metso litigation(343) (336) - (30) - - - (679) - Debt retirement costs- - - - (6,277) - - - (6,277) Directors' equity-based compensation benefit (expense)144 (113) (783) 143 (1,278) 435 (140) (752) (983) Costs associated with announced Thomaston facility closure- - - - (67) (386) (665) - (1,118) Discrete tax items related to release of uncertain tax positions- - - - - - (4,659) - (4,659) Discrete tax items related to credit conversions5,700 (4) 1,008 (306) (9,766) - (3,495) 6,704 (13,261) Adjusted income tax provision1($6,692)($14,670)($12,573)($8,800)($2,713)($6,913)(3,776)$ ($33,936)($13,402)Nine Months Ended September 30, 16
EBITDA & Adjusted EBITDA Reconciliation of Non-GAAP Financial Measures (Unaudited) 1 EBITDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. The most directly comparable GAAP measure is net earnings. EBITDA is net earnings adjusted for net interest expense (including debt retirement costs), income taxes, and depreciation and amortization. It should not be considered as an alternative to net earnings computed under GAAP. 2 Interest expense, net for first quarter 2013 includes debt retirement costs of $17.1 million. 3 Adjusted EBITDA excludes the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands)Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'1320122013 Earnings before interest, income taxes, and depreciation & amortization (EBITDA)1 GAAP net earnings (loss)$ 3,726$ 21,489$ 19,064$ 19,852($882)$ 11,658$ 13,317$ 44,279$ 24,093 Interest expense, net29,7289,1477,9007,02128,04011,09410,70826,77549,842 Income tax provision (benefit)12,19413,86112,7988,607(14,675)6,962(5,183)38,853(12,896) Depreciation and amortization expense19,54819,73019,19920,85622,15123,25322,18058,47767,584 EBITDA1$ 45,196$ 64,227$ 58,961$ 56,336$ 34,634$ 52,967$ 41,022$ 168,384$ 128,623 Loss on sale of foam assets- 1,014 - - - - - 1,014 - Expenses associated with Metso litigation990 958 - 71 - - - 1,948 - Directors' equity-based compensation (benefit) expense(417) 322 1,801 (337) 3,472 (1,141) 361 1,706 2,692 Costs associated with announced Thomaston facility closure- - - - 183 1,013 1,717 - 2,913 Adjusted EBITDA3$ 45,769$ 66,521$ 60,762$ 56,070$ 38,289$ 52,839$ 43,100$ 173,052$ 134,228Nine Months Ended September 30, 17
Segment EBITDA & Adjusted EBITDA Reconciliation of Non-GAAP Financial Measures (Unaudited) 1 Segment EBITDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. The most directly comparable GAAP measure is segment operating income. Segment EBITDA is segment operating income adjusted for depreciation and amortization. It should not be considered as an alternative to segment operating income computed under GAAP. 2 Segment Adjusted EBITDA excludes the impact of the items listed that we do not believe are indicative of our core operating performance. (Dollars in thousands)Q1'12Q2'12Q3'12Q4'12Q1'13Q2'13Q3'1320122013Consumer Products Operating income$ 26,271$ 25,696$ 18,453$ 22,927$ 10,124$ 14,815$ 13,445$ 70,420$ 38,384 Depreciation and amortization expense13,165 13,252 13,275 14,855 16,092 17,030 16,002 39,692 49,124 EBITDA1$ 39,436$ 38,948$ 31,728$ 37,782$ 26,216$ 31,845$ 29,447$ 110,112$ 87,508 Loss on sale of foam assets- 1,014 - - - - - 1,014 - Costs associated with announced Thomaston facility closure- - - - 183 1,013 1,717 - 2,913 Adjusted EBITDA2$ 39,436$ 39,962$ 31,728$ 37,782$ 26,399$ 32,858$ 31,164$ 111,126$ 90,421Pulp and Paperboard Operating income$ 11,658$ 32,001$ 34,449$ 25,802$ 17,553$ 24,772$ 16,289$ 78,108$ 58,614 Depreciation and amortization expense6,011 6,011 5,525 5,566 5,659 5,778 5,758 17,547 17,195 EBITDA1$ 17,669$ 38,012$ 39,974$ 31,368$ 23,212$ 30,550$ 22,047$ 95,655$ 75,809 Adjusted EBITDA2$ 17,669$ 38,012$ 39,974$ 31,368$ 23,212$ 30,550$ 22,047$ 95,655$ 75,809Corporate Operating loss($12,281)($13,200)($13,140)($13,249)($15,194)($9,873)($10,892)($38,621)($35,959) Depreciation and amortization expense372 467 399 435 400 445 420 1,238 1,265 EBITDA1($11,909)($12,733)($12,741)($12,814)($14,794)($9,428)($10,472)($37,383)($34,694) Expenses associated with Metso litigation990 958 - 71 - - - 1,948 - Directors' equity-based compensation (benefit) expense(417) 322 1,801 (337) 3,472 (1,141) 361 1,706 2,692 Adjusted EBITDA2($11,336)($11,453)($10,940)($13,080)($11,322)($10,569)($10,111)($33,729)($32,002)Nine Months Ended September 30, 18
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