Clearwater Paper has reported financial results for the second quarter of this year.
The company reported net sales of $432.1 million for the second quarter of 2018, up 0.6% compared to net sales of $429.7 million for the second quarter of 2017. Net earnings determined in accordance with generally accepted accounting principles, or GAAP, for the second quarter of 2018 were $7.0 million, or $0.42 per diluted share, compared to net earnings for the second quarter of 2017 of $8.0 million, or $0.48 per diluted share.
The decrease in net earnings was due to a weaker product mix in tissue products, higher input costs for transportation, wood fiber, and external pulp and reorganization expenses, all of which were partially offset by improved price and shipment volumes for paperboard, no planned major maintenance and lower expense associated with profit dependent accruals.
Excluding certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, second quarter 2018 adjusted net earnings were $7.1 million, or $0.43 per diluted share, compared to second quarter 2017 adjusted net earnings of $7.9 million, or $0.48 per diluted share.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, were $42.4 million for the second quarter of 2018, compared to $45.7 million for the second quarter of 2017. Adjusted EBITDA for the quarter was $42.6 million, down 5.4% compared to second quarter 2017 Adjusted EBITDA of $45.0 million.
“We met our expectations in the second quarter due to record paperboard production and shipments, continued strong demand for paperboard and ultra-quality tissue, and cost savings from strategic capital and operational efficiency initiatives,” said Linda K. Massman, president and chief executive officer.
“Those results were achieved in spite of a competitive tissue market, and high external pulp prices and transportation costs. For the second half of 2018, we are acutely focused on improving operating profit, generating cash, completing the expansion work at our Shelby, North Carolina facility and optimizing our network of assets to reduce costs and improve service to customers.”
Net sales in the Consumer Products segment were $221.6 million for the second quarter of 2018, down 4.5% compared to second quarter 2017 net sales of $231.9 million. This decrease was due primarily to lower prices and weaker product mix reflected in a 6.0% reduction in retail converted case tissue shipment volumes offset by a 26.1% increase in non-retail parent roll shipments as we work to recover converted case business in the second half of 2018.
Operating loss for the second quarter of 2018 was $3.6 million, compared to operating income and margin of $10.7 million and 4.6% respectively, in the second quarter of 2017.
After adjusting for certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, adjusted operating loss of $2.6 million for the second quarter of 2018 was down from $11.9 million and 5.1% of adjusted operating income and margin, respectively, for the same period in 2017. Adjusted EBITDA for the segment was $11.6 million in the second quarter of 2018, down from $27.7 million in the second quarter of 2017.
These decreases were primarily due to lower average selling prices, the absorption of fixed costs over lower volumes of retail shipments and higher transportation costs.
Total tissue volumes sold were 90,386 tons in the second quarter of 2018, a decrease of 1.2% compared to 91,450 tons in the second quarter of 2017. Converted product cases shipped were 12.0 million in the second quarter of 2018, 5.4% lower than the 12.7 million cases shipped in the second quarter of 2017.
Average tissue net selling prices decreased 3.2%, or $82 per ton, to $2,451 per ton in the second quarter of 2018, compared to $2,533 per ton in the second quarter of 2017, primarily due to product mix.
Net sales in the Pulp and Paperboard segment were $210.5 million for the second quarter of 2018, up 6.5% compared to second quarter 2017 net sales of $197.8 million. The increase was due to record production levels and volume shipments coupled with higher paperboard prices.
Operating income and margin for the second quarter of 2018 were $34.2 million and 16.2%, compared to $21.1 million and 10.7%, respectively, for the second quarter of 2017. Adjusted EBITDA for the segment was $43.6 million in the second quarter of 2018, compared to $29.4 million in the second quarter of 2017. The improvement was primarily due to higher average selling prices and lower major maintenance spending, which more than offset increased costs for wood fiber in the Pacific Northwest and higher transportation costs.
Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, parent roll tissue, bleached paperboard and pulp at manufacturing facilities across the nation. The company is a premier supplier of private label tissue to major retailers and wholesale distributors, including grocery, drug, mass merchants and discount stores.
Source: Company Press Release