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Clearwater Paper Reports Q2 results; positively impacted by higher retail tissue shipments and tissue pricing

Clearwater Paper Corporation has reported a net sales increase of 4.6% to $452.0m for the second quarter of 2019 compared with the same time a year earlier.

The company said the increase was due to “record quarterly paperboard shipments and sales, higher retail tissue shipments and higher paperboard and tissue pricing from previously announced price increases”.

These items were partially offset by lower non-retail tissue shipments primarily resulting from the sale of the company’s mill in Ladysmith, Wisconsin, in August 2018.

EBITDA was $42.3m for the second quarter of 2019 compared to $42.4m for the second quarter of 2018.

Linda K. Massman, president and chief executive, said: “We delivered a solid second quarter with record paperboard shipments and sales, and higher shipments of converted retail tissue, compared to the first quarter of 2019.

“Partially offsetting those results were the start-up costs related to our new paper machine in Shelby, North Carolina, which is progressing well and is expected to reach its full production run rate in late 2020.

“In addition, we recently completed the refinancing of our secured revolving credit facility with a seven-year Term Loan B and an asset based revolving credit facility, which will provide us the operational flexibility and liquidity needed as we focus on generating free cash flow to de-lever our balance sheet.”

In its Consumer Products division, net sales were $224.3m for the second quarter of 2019, up 1.2% compared to second quarter 2018 net sales of $221.6m.

This increase was due to higher retail tissue volumes sold, higher average prices for both retail and non-retail tissue products and a favourable mix shift to a higher percentage of retail and ultra-quality products.

Segment operating loss for the second quarter of 2019 was $5.1m, compared to an operating loss of $3.6m in the second quarter of 2018.

Total tissue volumes sold were 82,798 tonnes in the second quarter of 2019, a decrease of 7,588 tonnes or 8.4% compared to 90,386 tonnes in the second quarter of 2018.

Average tissue net selling prices increased 9.8% to $2,691 per tonne in the second quarter of 2019, due to a significant reduction in parent roll sales resulting from the divestiture of the Ladysmith mill, previously announced price increases and a higher mix of ultra-quality tissue products.

Net sales in the Pulp and Paperboard segment reached a record high of $227.7m for the second quarter of 2019, up 8.1% compared to second quarter 2018 net sales of $210.5m.

The increase was due to record shipment volumes resulting from strong demand and the benefit of higher prices from previously announced increases.

Clearwater Paper manufactures quality consumer tissue, AfH tissue, parent roll tissue, bleached paperboard and pulp.

It is a premier supplier of private label tissue to major retailers and wholesale distributors.

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