Clearwater Paper Corporation has said it will “explore strategic options for its tissue business”, as it rates the division’s performance improvement “outstanding” in its 2023 results.
In the fourth quarter of 2023, the company reported a strong performance driven by “solid operational results and continued strength in tissue.”
Net sales of $513m were down 3% compared to the fourth quarter of 2022, whilst net income was $18m compared to a net loss in the fourth quarter of 2022 of $6m.
Adjusted EBITDA for the quarter was $63m compared to the fourth quarter of 2022’s $28m.
For the full year, the company reported an “outstanding year driven by performance improvement in tissue” as net income reached $108m, up $61.7m when compared with 2022.
Net sales of $2.1bn – flat compared with 2022 – were a result of a strong tissue demand offset by softness in the company’s paperboard division.
Net income was $108m compared to net income for 2022 of $46m.
Adjusted EBITDA for 2023 was $281m compared to 2022 Adjusted EBITDA of $227m.
In February 2024, the company also announced it had signed a definitive agreement to acquire Graphic Packaging’s Augusta, Georgia-based bleached paperboard manufacturing facility for $700m, subject to customary adjustments. The facility has a bleached paperboard capacity of 600,000tpy.
Arsen Kitch, President and Chief Executive, said: “We had a great year, driven by a significant improvement in our tissue margins and strong operational execution across both businesses.
“Tissue demand remained strong, and we benefited from favourable input costs. Paperboard demand was soft.”
He added that the Augusta acquisition “will be a great fit” for Clearwater Paper: “It will add scale and growth capacity to improve our position as a premier, independent supplier of paperboard to North American converters.
“We remain optimistic about the long-term prospects for paperboard as consumers look for sustainable solutions in packaging and food service.
“With this acquisition, Clearwater Paper will be well positioned to service customers with high quality paperboard capacity and a great manufacturing footprint across North America.”
The company added it will “explore strategic options for its tissue business as it intends to focus on growth in paperboard.”
Net sales in the Pulp and Paperboard segment were $251m for the fourth quarter of 2023, down 8% compared to fourth quarter 2022 net sales of $274m.
Retail tissue volumes sold were 81,475 tons in the fourth quarter of 2023, an increase of 1% compared to 80,766 tons in the fourth quarter of 2022.
Retail tissue volumes sold were 317,582 tons for the year ended of 2023, an increase of 3% compared to 309,735 tons for 2022.
Kitch said: “We anticipate continued strength in our tissue business in 2024 and believe that paperboard demand will recover in the second half of the year.
“We also look forward to completing the Augusta acquisition in the second quarter of this year.”
