Form 8-K - Current report

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): August 1, 2023

CLEARWATER PAPER CORPORATION

(Exact name of registrant as specified in its charter)


DE	001-34146	20-3594554
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)


601 West Riverside,	Suite 1100	99201
Spokane,	WA
(Address of principal executive offices)		(Zip Code)

(509) 344-5900

(Registrant’s telephone number, including area code)

Not Applicable

(Former name of former address, if changed since last report)

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 (see General Instructions A.2. below):

☐ 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))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchanged on which registered
Common Stock, par value $0.0001 per share	CLW	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On August 1, 2023, Clearwater Paper Corporation (the “Company”) announced its results of operations and financial condition for the second quarter ending June 30, 2023. A copy of the press release containing this announcement is furnished as Exhibit 99.1 hereto. In addition, a copy of the Company’s Second Quarter Supplemental Information is furnished as Exhibit 99.2 hereto.

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), the following are disclosed in the attached Adjusted EBITDA which is defined as earnings before interest expense, taxes, depreciation and amortization, other operating credits and charges, net and other non-operating items. Adjusted net income which is calculated by excluding from net income, other operating credits and charges, net, and adjusts for a normalized tax rate. Adjusted EBITDA and Adjusted net income are not a substitute for the GAAP measure of net income or other GAAP measures of operating performance.

The Company discloses Adjusted EBITDA in the attached because it is used as an important supplemental measure of its performance and believes that similarly-titled measures are frequently used by securities analysts, investors and other interested persons in the evaluation of companies in its industry, some of which present similarly-titled measures when reporting their results. The Company uses Adjusted EBITDA to evaluate its performance as compared to other companies in its industry that have different financing and capital structures and/or tax rates. It should be noted that companies calculate similarly-titled measures differently and, therefore, as presented by the Company may not be comparable to similarly-titled measures reported by other companies. In addition, Adjusted EBITDA has material limitations as a performance measure because it excludes interest expense, income tax expense and depreciation and amortization which are necessary to operate the Company's business or which the Company otherwise incurred or experienced in connection with the operation of its business.

The Company believes that adjusted net income, which excludes other operating credits and charges, net, adjusted for a normalized tax rate is a useful measure for evaluating our ability to generate earnings and that providing this measure will allow investors to more readily compare the earnings referred to in the press release to the Company's earnings for past and future periods. The Company believes that this measure is particularly useful where the amounts of the excluded items are not consistent between the periods presented. It should be noted that other companies may present similarly-titled measures differently and, therefore, as presented by the Company may not be comparable to similarly-titled measures reported by other companies. In addition, adjusted net income has material limitations as a performance measure because it excludes items that are actually incurred or experienced in connection with the operations of the Company's business.

The information in Item 2.02, 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) Exhibit Index


Exhibit			Description
99.1			Press release issued by Clearwater Paper Corporation regarding the second quarter ended June 30, 2023 financial results
99.2			Supplemental financial information for the second quarter ended June 30, 2023

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 : August 1, 2023

CLEARWATER PAPER CORPORATION


By:			/s/ Rebecca A. Barckley
			Rebecca A. Barckley, Corporate Controller (Principal Accounting Officer) and Interim Chief Financial Officer
			(Principal Financial Officer)

Exhibit 99.1

Clearwater Paper Reports Second Quarter 2023 Results

SPOKANE, Wash.--(BUSINESS WIRE)--August 1, 2023 --Clearwater Paper Corporation (NYSE:CLW), a premier supplier of quality tissue and bleached paperboard products, today reported financial results for the second quarter and six months ended June 30, 2023.

SECOND QUARTER HIGHLIGHTS

•Net sales of $525 million, slightly below the second quarter of last year

•Net income of $30 million, or $1.75 per diluted share

•Adjusted net income of $30 million, $11 million higher than the second quarter of last year

•Adjusted EBITDA of $71 million, $8 million higher than second quarter of last year

•Adjusted EBITDA margin at 13.6%, up from 12% during the second quarter of last year

•Reduced net debt by $25 million from first quarter of this year

•Repurchased $8 million of outstanding shares, with $15 million remaining under program

“We had a stronger than expected second quarter, with solid operational performance and lower than expected costs for key inputs such as pulp, energy, and transportation. Tissue demand remained strong, while paperboard was soft as consumer spending slowed and customers continued to manage inventories,” said Arsen Kitch, president and chief executive officer. “We continued to focus on cash flow generation and were able to reduce our net debt by $25 million and repurchase 263 thousand shares of our stock.”

OVERALL RESULTS

For the second quarter of 2023, Clearwater Paper reported net sales of $525 million compared to net sales of $526 million for the second quarter of 2022. Net income for the second quarter of 2023 was $30 million, or $1.75 per diluted share, compared to net income for the second quarter of 2022 of $15 million, or $0.86 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income in the second quarter of 2023 of $30 million, or $1.74 per diluted share, compared to second quarter 2022 adjusted net income of $19 million, or $1.11 per diluted share. Adjusted EBITDA for the second quarter of 2023 was $71 million, compared to the second quarter of 2022 Adjusted EBITDA of $63 million.

For the first six months of 2023, Clearwater Paper reported net sales of $1.1 billion, a 3% increase compared to net sales of $1.0 billion for the first six months of 2022. Net income for the first six months of 2023 was $54 million, or $3.15 per diluted share, compared to net income for the first six months of 2022 of $31 million, or $1.83 per diluted share. On a non-GAAP basis, Clearwater Paper reported adjusted net income in the first six months of 2023 of $55 million, or $3.21 per diluted share, compared to first six months of 2022 adjusted net income of $36 million, or $2.13 per diluted share. Adjusted EBITDA for the first six months of 2023 was $137 million, compared to the first six months of 2022 Adjusted EBITDA of $122 million

Pulp and Paperboard Segment

Net sales in the Pulp and Paperboard segment were $272 million for the second quarter of 2023, down 8% compared to second quarter 2022 net sales of $296 million. Segment operating income for the second quarter of 2023 was $42 million, compared to $52 million for the second quarter of 2022. Adjusted EBITDA for the segment was $51 million in the second quarter of 2023, compared to $61 million in the second quarter of 2022. The decrease in operating income and Adjusted EBITDA was primarily driven by planned production downtime to manage inventories, higher maintenance costs and lower sales volumes, partially offset by higher sales prices.

Net sales in the Pulp and Paperboard segment were $551 million for the first six months of 2023, down 2% compared to net sales of $562 million in the first six months of 2022. Segment operating income for the first six months of 2023 was $99 million, compared to $102 million for the first six months of 2022. Adjusted EBITDA for the segment was $118 million in the first six months of 2023, compared to $121 million in the first six months of 2022. The decrease in operating income and Adjusted EBITDA was driven primarily by planned production downtime to manage inventories and lower sales volumes, partially offset by higher sales prices.

Pulp and Paperboard Sales Volumes and Prices:

• Paperboard sales volumes were 186,160 tons in the second quarter of 2023, a decrease of 14% compared to 215,903 tons in the second quarter of 2022. Paperboard sales volumes were 375,558 tons in the first six months of 2023, a decrease of 10% compared to 417,259 tons in the first six months of 2022.

• Paperboard average net selling price increased 6% to $1,413 per ton for the second quarter of 2023, compared to $1,332 per ton in the second quarter of 2022. Paperboard average net selling price increased 10% to $1,428 per ton for the first six months of 2023, compared to $1,299 per ton in the first six months of 2022.

Consumer Products Segment

Net sales in the Consumer Products segment were $254 million for the second quarter of 2023, up 9% compared to second quarter 2022 net sales of $232 million. Segment operating income for the second quarter of 2023 was $25 million compared to operating income of $3 million in the second quarter of 2022. Adjusted EBITDA for the segment was $40 million in the second quarter of 2023, compared to $19 million in the second quarter of 2022. The increase in operating income and Adjusted EBITDA was driven by higher sales prices and lower input costs, primarily in freight and energy.

Net sales in the Consumer Products segment were $502 million for the first six months of 2023, up 10% compared to net sales of $455 million in the first six months of 2022. Segment operating income for the first six months of 2023 was $29 million compared to operating income of $4 million in the first six months of 2022. Adjusted EBITDA for the segment was $59 million in the first six months of 2023, compared to $35 million in the first six months of 2022. The increase in operating income and Adjusted EBITDA was driven by higher sales prices partially offset by higher input costs, primarily in pulp, freight and energy costs.

Retail Tissue Sales Volumes and Prices:

• Retail tissue volumes sold were 78,672 tons in the second quarter of 2023 compared to 76,604 tons in the second quarter of 2022. Retail tissue volumes sold were 155,520 tons in the first six months of 2023, an increase of 2% compared to 152,030 tons in the first six months of 2022.

• Retail tissue average net selling price increased 8% to $3,214 per ton in the second quarter of 2023, compared to $2,984 per ton in the second quarter of 2022. Retail tissue average net selling price increased 10% to $3,207 per ton in the first six months of 2023, compared to $2,928 per ton in the first six months of 2022.

COMPANY OUTLOOK

“We expect continued strength in our tissue business in the coming quarters, with projected strong demand and lower input costs driving improved margins. We also anticipate that our paperboard volumes will improve in the second half of this year as compared to the first half. We will continue our focus on cash flow generation through strong operating performance and managing inventories by matching supply with demand,” continued Kitch.

WEBCAST INFORMATION

Clearwater Paper Corporation will discuss these results during an earnings conference call that begins at 2:00 p.m. Pacific Time today. A live webcast and accompanying supplemental information will be available on the company's website at http://ir.clearwaterpaper.com. A replay of today's conference call will be available on the website at https://ir.clearwaterpaper.com/investors/events-and-presentations beginning at 5:00 p.m. Pacific Time today.

ABOUT CLEARWATER PAPER

Clearwater Paper is a premier supplier of private brand tissue to major retailers, including grocery, club, mass merchants, and discount stores. In addition, the company produces bleached paperboard used by quality-conscious printers and packaging converters, and offers services that include custom sheeting, slitting, and cutting. Clearwater Paper's employees build shareholder value by developing strong relationships through quality and service.

USE OF NON-GAAP MEASURES

In this press release, the company presents certain non-GAAP financial information for the second quarter and first six months of 2023 and 2022, including adjusted income and Adjusted EBITDA. Because these amounts are not in accordance with GAAP, reconciliations to net income as determined in accordance with GAAP are included in the tables at the end of this press release. The company presents these non-GAAP metrics 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. In addition, the company uses Adjusted EBITDA: (i) as a factor in evaluating management’s performance when determining incentive compensation, (ii) to evaluate the effectiveness of the company's business strategies, and (iii) because the company's credit agreement and the indentures governing the company's outstanding notes use metrics similar to Adjusted EBITDA to measure the company's compliance with certain covenants.

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 demand, inflation, our expectations regarding the paperboard and tissue markets, operational and financial performance, and our focus on cash flow and inventory management. 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: competitive pricing pressures for our products, including as a result of capacity additions, demand reduction and the impact of foreign currency fluctuations on the pricing of products globally; changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate; manufacturing or operating disruptions, including equipment malfunctions and damage to our manufacturing facilities; the loss of, changes in prices in regard to, or reduction in, orders from a significant customer; changes in the cost and availability of wood fiber and wood pulp; changes in energy, chemicals, packaging and transportation costs and disruptions in transportation services impacting our ability to receive inputs or ship products to customers; reliance on a limited number of third-party suppliers, vendors and service providers required for the production of our products and our operations; changes in customer product preferences and competitors' product offerings; cyber-security risks; larger competitors having operational, financial and other advantages; consolidation and vertical integration of converting operations in the paperboard industry; our ability to successfully execute capital projects and other activities to operate our assets, including effective maintenance, implement our operational efficiencies and realize higher throughput or lower costs; IT system disruptions and IT system implementation failures; labor disruptions; cyclical industry conditions; changes in expenses, required contributions and potential withdrawal costs associated with our pension plans; environmental liabilities or expenditures and climate change; our ability to attract, motivate, train and retain qualified and key personnel; ability to service our debt obligations and restrictions on our business from debt covenants and terms; changes in our banking relations, or in our customer supply chain financing; negative changes in our credit agency ratings; changes in laws, regulations or industry standards affecting our business; and other risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2022. 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 based on new developments or changes in the company's expectations after the date of this press release.


Clearwater Paper Corporation
Consolidated Statements of Operations
(Unaudited)

	Quarter Ended June 30,				Six Months Ended June 30,
(In millions, except per-share data)	2023		2022		2023		2022
Net sales	$	524.6	$	526.4	$	1,050.0	$	1,014.6
Costs and expenses:
Cost of sales	438.7		455.2		887.2		877.2
Selling, general and administrative expenses	39.1		33.9		75.1		66.7
Other operating (income) charges, net	(0.4)		5.7		0.6		6.3
Total operating costs and expenses	477.3		494.9		962.9		950.2
Income from operations	47.3		31.5		87.1		64.4
Interest expense, net	(7.5)		(10.7)		(15.1)		(19.3)
Debt retirement costs	—		(0.3)		—		(0.5)
Other non-operating (expense) income	0.1		(1.4)		0.2		(2.8)
Total non-operating expense	(7.4)		(12.4)		(14.9)		(22.7)
Income before income taxes	39.9		19.1		72.2		41.7
Income tax provision	10.2		4.4		18.6		10.4
Net income	$	29.7	$	14.7	$	53.5	$	31.3

Net income per common share:
Basic	$	1.76	$	0.87	$	3.18	$	1.86
Diluted	1.75		0.86		$	3.15	$	1.83

Average shares outstanding (in thousands):
Basic	16,865		16,849		16,849		16,788
Diluted	16,958		17,078		17,003		17,080


Clearwater Paper Corporation
Condensed Consolidated Balance Sheets
(Unaudited)

(In millions)	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	41.7	$	53.7
Receivables, net	196.6		188.8
Inventories	340.4		324.0
Other current assets	13.4		19.9
Total current assets	592.1		586.3
Property, plant and equipment, net	1,000.2		1,017.1
Other assets, net	112.7		100.1
Total assets	$	1,705.0	$	1,703.5

Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt	$	0.9	$	0.9
Accounts payable and accrued liabilities	262.6		311.1
Total current liabilities	263.5		312.0
Long-term debt	564.8		564.9
Liability for pension and other postretirement employee benefits	57.2		58.2
Deferred tax liabilities and other long-term obligations	205.0		196.4
Total liabilities	1,090.5		1,131.5

Stockholders' equity:
Common stock	—		—
Additional paid-in capital	17.7		28.5
Retained earnings	630.3		576.8
Accumulated other comprehensive loss, net of tax	(33.4)		(33.3)
Total stockholders' equity	614.5		572.1
Total liabilities and stockholders' equity	$	1,705.0	$	1,703.5


Clearwater Paper Corporation
Consolidated Statements of Cash Flows
(Unaudited)
	Quarter Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Operating activities
Net income	$	29.7	$	14.7	$	53.5	$	31.3
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	24.6		25.7		49.4		51.2
Equity-based compensation expense	1.5		4.9		3.4		5.5
Deferred taxes	(1.6)		(1.9)		(2.9)		(4.1)
Defined benefit pension and other postretirement employee benefits	(0.6)		0.8		(1.1)		1.5
Amortization of deferred debt costs and debt retirement	0.3		0.7		0.6		1.3
Loss on sale or impairment associated with assets	—		4.6		1.1		4.6
Increase (decrease) in cash from changes in operating assets and liabilities:
Accounts receivable	(7.7)		(11.3)		(14.1)		(21.8)
Inventories	5.3		(5.8)		(17.0)		(10.0)
Other current assets	5.4		4.2		5.8		4.2
Accounts payable and accrued liabilities	(10.7)		40.6		(42.5)		54.5
Other, net	(0.1)		1.3		0.6		1.4
Net cash flows provided by operating activities	46.0		78.5		36.9		119.5
Investing activities
Additions to property, plant and equipment, net	(12.8)		(5.4)		(34.3)		(13.2)
Net cash flows used in investing activities	(12.8)		(5.4)		(34.3)		(13.2)
Financing activities
Borrowings on short-term debt	—		—		12.0		—
Repayments of borrowings on short-term debt	—		—		(12.0)		—
Repayments of long-term debt	(0.2)		(35.1)		(0.5)		(55.5)
Taxes paid related to net share settlement of equity awards	(0.4)		(1.0)		(4.6)		(2.5)
Repurchases of common stock	(8.4)		(3.9)		(10.1)		(3.9)
Other, net	—		—		(0.1)		—
Net cash flows used in financing activities	(8.9)		(40.0)		(15.3)		(61.9)

Increase (decrease) in cash, cash equivalents and restricted cash	24.3		33.1		(12.7)		44.4
Cash, cash equivalents and restricted cash at beginning of period	17.4		37.5		54.4		26.2
Cash, cash equivalents and restricted cash at end of period	$	41.7	$	70.6	$	41.7	$	70.6


Clearwater Paper Corporation
Segment Information
(Unaudited)

	Quarter Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Segment net sales:
Pulp and Paperboard	$	272.3	$	295.8	$	551.0	$	562.0
Consumer Products	253.6		232.1		502.0		455.2
Eliminations	(1.3)		(1.5)		(3.0)		(2.6)
Total segment net sales	$	524.6	$	526.4	$	1,050.0	$	1,014.6

Operating income (loss):
Pulp and Paperboard	$	42.0	$	52.0	$	99.1	$	102.3
Consumer Products	25.0		3.5		29.2		4.4
Corporate and eliminations	(20.1)		(18.2)		(40.6)		(36.0)
Other operating income (charges), net 1	0.4		(5.7)		(0.6)		(6.3)
Income from operations	$	47.3	$	31.5	$	87.1	$	64.4

1Other operating income (charges), net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the SEC for the period end June 30, 2023 for the detailed breakout of this amount.


Clearwater Paper Corporation
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
(Unaudited)

	Quarter Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Net income	$	29.7	$	14.7	$	53.5	$	31.3
Add back:
Income tax provision	10.2		4.4		18.6		10.4
Interest expense, net	7.5		10.7		15.1		19.3
Depreciation and amortization	24.6		25.7		49.4		51.2
Other operating (income) charges, net1	(0.4)		5.7		0.6		6.3
Debt retirement costs	—		0.3		—		0.5
Other non-operating (income) expense	(0.1)		1.4		(0.2)		2.8
Adjusted EBITDA	$	71.5	$	63.0	$	137.2	$	121.9

Pulp and Paperboard segment income	$	42.0	$	52.0	$	99.1	$	102.3
Depreciation and amortization	9.3		9.2		18.5		18.5
Adjusted EBITDA Pulp and Paperboard	$	51.3	$	61.2	$	117.6	$	120.8

Consumer Products segment income	$	25.0	$	3.5	$	29.2	$	4.4
Depreciation and amortization	14.7		15.6		29.7		30.9
Adjusted EBITDA Consumer Products	$	39.7	$	19.1	$	58.9	$	35.3

Corporate and other expenses	$	(20.1)	$	(18.2)	$	(40.6)	$	(36.0)
Depreciation and amortization	0.6		0.9		1.2		1.8
Adjusted EBITDA Corporate and other	$	(19.5)	$	(17.3)	$	(39.3)	$	(34.2)

Pulp and Paperboard segment	$	51.3	$	61.2	$	117.6	$	120.8
Consumer Products segment	39.7		19.1		58.9		35.3
Corporate and other	(19.5)		(17.3)		(39.3)		(34.2)
Adjusted EBITDA	$	71.5	$	63.0	$	137.2	$	121.9

1 Other operating (income) charges, net consist of amounts unrelated to ongoing core operating activities. Please refer to Note 9 within Clearwater Paper's Form 10-Q filed with the SEC for the period end June 30, 2023 for the detailed breakout of this amount.


Clearwater Paper Corporation
Reconciliation of Non-GAAP Financial Measures
(Unaudited)

	Quarter Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2023		2022		2023		2022

Adjusted net income:
Net income	$	29.7	$	14.7	$	53.5	$	31.3
Add back:
Income tax provision	10.2		4.4		18.6		10.4
Income before income taxes	39.9		19.1		72.2		41.7

Add back:
Debt retirement costs	—		0.3		—		0.5
Other operating (income) charges, net	(0.4)		5.7		0.6		6.3
Adjusted income before tax	$	39.4	$	25.2	$	72.8	$	48.5
Normalized income tax provision	9.9		6.3		18.2		12.1
Adjusted net income	$	29.6	$	18.9	$	54.6	$	36.4

Weighted average diluted shares (thousands)	16,958		17,078		17,003		17,080

Adjusted income per diluted share	$	1.74	$	1.11	$	3.21	$	2.13

	June 30, 2023		March 31, 2023		December 31, 2022
Calculation of net debt:
Current portion of long-term debt	$	0.9	$	0.9	$	0.9
Long-term debt	564.8		564.9		564.9
Add back:
Unamortized deferred debt costs	3.0		3.2		3.4
Less:
Finance leases	23.7		24.0		24.2
Cash and cash equivalents	41.7		16.7		53.7
Net debt	$	503.3	$	528.3	$	491.3

Clearwater Paper Corporation

Investors contact:

Sloan Bohlen

Solebury Strategic Communications

509-344-5906

investorinfo@clearwaterpaper.com

News media:

Jules Joy, Director, Corporate Communications

509-344-5967

Julia.joy@clearwaterpaper.com

CLEARWATER PAPER CORPORATION SECOND QUARTER EARNINGS RELEASE MATERIALS AUGUST 1, 2023 ARSEN S. KITCH President, Chief Executive Officer And Director BECKY BARCKLEY Corporate Controller and Interim Chief Financial Officer

Cautionary Statement Regarding Forward Looking Statements This presentation of 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 order patterns; product demand and industry trends; production targets; impact of inflation of raw material and energy; assumptions for Q3 2023 and full year 2023, including maintenance outage impacts, operational factors, interest, capital, lower input costs, depreciation and amortization and income tax; our capital allocation priorities; our strategy, including achieving target leverage ratio and maintaining liquidity; expectations regarding the paperboard markets and tissue markets; and repurchases under existing share buyback authorization. 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, including but not limited to the following: competitive pricing pressures for our products, including as a result of capacity additions, demand reduction and the impact of foreign currency fluctuations on the pricing of products globally; the loss of, changes in prices in regard to, or reduction in, orders from a significant customer; changes in the cost and availability of wood fiber and wood pulp; changes in energy, chemicals, packaging and freight costs and disruptions in transportation services impacting our ability to receive inputs or ship products to customers; changes in customer product preferences and competitors' product offerings; larger competitors having operational, financial and other advantages; consolidation and vertical integration of converting operations in the paperboard industry; changes in the U.S. and international economies and in general economic conditions in the regions and industries in which we operate; manufacturing or operating disruptions, including equipment malfunctions and damage to our manufacturing facilities; cyber-security risks; our ability to successfully execute capital projects and other activities to operate our assets, including effective maintenance, implement our operational efficiencies and realize higher throughput or lower costs; IT system disruptions and IT system implementation failures; labor disruptions; cyclical industry conditions; changes in expenses, required contributions and potential withdrawal costs associated with our pension plans; environmental liabilities or expenditures and climate change; reliance on a limited number of third-party suppliers, vendors and service providers required for the production of our products and our operations; our ability to attract, motivate, train and retain qualified and key personnel; ability to service our debt obligations and restrictions on our business from debt covenants and terms; changes in our banking relations, or in our customer supply chain financing; negative changes in our credit agency ratings; and changes in laws, regulations or industry standards affecting our business. 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 or to retract future revisions of management's views based on events or circumstances occurring after the date of this presentation. Non-GAAP Financial Measures This presentation includes certain financial measures that are not calculated in accordance with GAAP, including Adjusted EBITDA, Adjusted Income, Adjusted income per diluted share, free cash flow and net debt. The Company’s management believes that the presentation of these financial measures provides useful information to investors because these measures are regularly used by management in assessing the Company’s performance. These financial measures should be considered in addition to results prepared in accordance with GAAP but should not be considered substitutes for or superior to GAAP results. In addition, these non-GAAP financial measures may not be comparable to similarly-titled measures utilized by other companies, since such other companies may not calculate such measure in the same manner as we do. A reconciliation of these measures (Adjusted EBITDA, Adjusted Income, Adjusted income per diluted share, free cash flow and net debt) to the most relevant GAAP measure is available in the appendix of this presentation. FORWARD LOOKING STATEMENTS © Clearwater Paper Corporation 2023 2

Overall • Net sales $525 million, down slightly versus Q2 2022 • Net income $30 million • Adjusted net income $30 million, up $11 million versus Q2 2022 • Adjusted EBITDA $71 million, up $8 million versus Q2 2022 Pulp and Paperboard • SBS prices increased from Q2 2022 • Soft demand as consumer spending slowed Consumer Products • Tissue prices increased from Q2 2022 • Strong operational performance • Demand for private branded products increased Capital Structure • Continued to maintain strong financial flexibility • Repurchased $8 million of stock, with $15 million remaining authorized under our stock repurchase program • Reduced net debt $25 million from Q1 2023 Q2 2023 BUSINESS HIGHLIGHTS © Clearwater Paper Corporation 2023 3

Industry (SBS) • Shipments, production, and operating rates decreased YTD Q2 2023 versus YTD Q2 2022 based on AF&PA data • Shipments (in tons) decreased 12.6% • Production decreased 9.1% • Operating rates decreased 7.1% to 83.8% • RISI reported no market price changes in Q1 and Q2 of 2023 • $20 per ton decrease in folding carton reported in July of 2023 Clearwater Paper • Demand and order backlogs continued to be soft during Q2 • Approximately 10% of planned capacity downtime in the quarter to manage inventories • Continued to benefit from previously announced price increases versus 2022 BUSINESS UPDATE – PULP AND PAPERBOARD PRICING OFFSETTING INFLATION, DRIVING STRONG RESULTS © Clearwater Paper Corporation 2023 4

Industry • Consumers shifting to private brands with economic uncertainty and inflation • Private brand market share hit a high of 36.3%1 • 94.2% capacity utilization during the quarter based on RISI data Clearwater Paper • Strong demand with Q2 2023 shipments of 12.8 million cases compared to 12.6 million in Q2 2022 and 12.7 million in Q1 2023 • Outstanding operational performance • Strong service levels with on-time performance greater than 95%, fill rates greater than 99% • Lower input costs in pulp, energy and transportation as compared to Q1 2023 • Continued to benefit from previously announced price increases BUSINESS UPDATE – CONSUMER PRODUCTS SHIPMENTS STRENGTHENED; PRICES INCREASED © Clearwater Paper Corporation 2023 5 1 Circana panel data for dollar share as of June 2023

© Clearwater Paper Corporation 2023 FINANCIAL PERFORMANCE ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 6 2023 2022 2023 2022 Net sales 524.6$ 526.4$ 1,050.0$ 1,014.6$ Cost of sales 438.7 455.2 887.2 877.2 Selling, general and adminstrative 39.1 33.9 75.1 66.7 Other operating charges, net (0.4) 5.7 0.6 6.3 Income from operations 47.3 31.5 87.1 64.4 Non-operating expense (7.4) (12.4) (14.9) (22.7) Income tax provision 10.2 4.4 18.6 10.4 Net income 29.7$ 14.7$ 53.5$ 31.3$ Diluted income per share 1.75$ 0.86$ 3.15$ 1.83$ Adjusted income per share 1.74$ 1.11$ 3.21$ 2.13$ Adjusted EBITDA 71.5$ 63.0$ 137.2$ 121.9$ Quarter Ended June 30, Six Months Ended June 30,

© Clearwater Paper Corporation 2023 SEGMENT PROFIT AND LOSS AND ADJUSTED EBITDA ($ IN MILLIONS) 2023 2022 2023 2022 Net Sales Pulp and Paperboard 272.3$ 295.8$ 551.0$ 562.0$ Consumer Products 253.6 232.1 502.0 455.2 Eliminations (1.3) (1.5) (3.0) (2.6) 524.6$ 526.4$ 1,050.0$ 1,014.6$ Operating Income Pulp and Paperboard 42.0$ 52.0$ 99.1$ 102.3$ Consumer Products 25.0 3.5 29.2 4.4 Corporate and other (20.1) (18.2) (40.6) (36.0) Other operating charges, net 0.4 (5.7) (0.6) (6.3) 47.3$ 31.5$ 87.1$ 64.4$ Adjusted EBITDA Pulp and Paperboard 51.3$ 61.2$ 117.6$ 120.8$ Consumer Products 39.7 19.1 58.9 35.3 Corporate and other (19.5) (17.3) (39.3) (34.2) 71.5$ 63.0$ 137.2$ 121.9$ Quarter Ended June 30, Six Months Ended June 30, 7

PULP AND PAPERBOARD Q2 2023 RESULTS Q2 2023 VS. Q2 2022 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 8 SEGMENT OPERATING INCOME SEGMENT ADJUSTED EBITDA

CONSUMER PRODUCTS Q2 2023 RESULTS Q2 2023 VS. Q2 2022 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 9 SEGMENT OPERATING INCOME SEGMENT ADJUSTED EBITDA

© Clearwater Paper Corporation 2023 CAPITAL STRUCTURE AND ALLOCATION Capital structure summary • Ample liquidity • No material near-term debt maturities • Corporate/Issuer ratings: Ba2/BB- Capital allocation • Repurchased 263,381 shares at an average price of $31.70 per share in Q2 2023 • Reduced net debt by $25 million from Q1 2023 $0.0 $0.0 $270.0 $0.0 $0.0 $275.0 2023 2024 2025 2026 2027 2028 Scheduled Debt Maturity Profile ($ in millions)2 Liquidity Profile ($ in millions)1 ABL Availability $275.0 Less Utilization (3.5) Plus Unrestricted Cash 41.7 Liquidity $313.2 1. ABL availability based on borrowing base calculations and consolidated balance sheet as of June 30, 2023, and utilization includes ABL borrowing of $275 million and outstanding letters of credit of $3.5 million. 2. This chart excludes finance leases as of June 30, 2023. Current debt maturities include $270 million of 5.375% notes due 2025 and $275 million of 4.75% notes due 2028. 10

OUTLOOK FOR Q3 AND 2023 OVERALL ASSUMPTIONS © Clearwater Paper Corporation 2023 Q3 2023: $73 to $83 million of Adjusted EBITDA • Lower input costs, specifically in pulp and transportation 2023 assumptions vs. 2022 • $42 million benefit due to fewer major maintenance outages and better operating performance • $15 to $25 million benefit due to previously announced price increases and lower input costs • Tissue margin recovery 2023 Other • Interest expense: $27 to $29 million • Depreciation and amortization expense: $98 to $101 million • CAPEX: $70 to $80 million • Taxes: effective rate ~ 25 - 26% 11

CAPITAL ALLOCATION PRIORITIES © Clearwater Paper Corporation 2023 • Invest capital to sustain current asset base • $60 to $70 million per year outside of major projects Sustain the business Preserve financial flexibility Enhance value DISCIPLINED APPROACH TO CAPITAL ALLOCATION 1 2 3 12 • Reduce leverage to increase flexibility • Target net leverage ratio around 2.5x through a cycle • Support financing of future value creating options • Invest capital to improve asset base • Opportunistic acquisitions • Share buybacks to offset dilution and opportunistically add value

PULP AND PAPERBOARD SEQUENTIAL QUARTER RESULTS Q2 2023 VS. Q1 2023 SEGMENT RESULTS © Clearwater Paper Corporation 2023 14 SEGMENT OPERATING INCOME SEGMENT ADJUSTED EBITDA ($ IN MILLIONS)

CONSUMER PRODUCTS SEQUENTIAL QUARTER RESULTS Q2 2023 VS. Q1 2023 SEGMENT RESULTS ($ IN MILLIONS) © Clearwater Paper Corporation 2023 15 SEGMENT OPERATING INCOME SEGMENT ADJUSTED EBITDA

KEY SEGMENT INFORMATION 1. Includes both retail and away-from-home (AFH) cases. AFH was exited in Q3, 2021 Q2’2021 Q3’2021 Q4’2021 Q1’2022 Q2’2022 Q3’2022 Q4’2022 Q1’2023 Q2’2023 Pulp and Paperboard Sales ($ millions) $227.4 $237.5 $261.3 $266.2 $295.8 $300.8 $273.5 $278.8 $272.3 Adjusted EBITDA ($ millions) $22.0 $43.5 $61.9 $59.5 $61.2 $73.0 $26.7 $66.2 $51.3 Paperboard shipments (short tons) 200.6 203.4 211.5 201.4 215.9 208.3 189.0 189.4 186.2 Paperboard sales price ($/short ton) $1,058 $1,102 $1,164 $1,263 $1,332 $1,405 $1,429 $1,441 $1,413 Consumer Products Sales ($ millions) $180.7 $214.2 $231.8 $223.0 $232.1 $240.9 $254.1 $248.3 $253.6 Adjusted EBITDA ($ millions) $6.7 $19.6 $8.0 $16.2 $19.1 $21.2 $17.6 $19.2 $39.7 Shipments Retail (short tons in thousands) 61.5 76.2 79.4 75.4 76.6 76.9 80.8 76.8 78.7 Non-Retail (short tons in thousands) 7.4 5.7 6.2 5.1 2.6 2.3 2.2 1.0 0.1 Converted Products (cases in millions)1 10.2 12.3 12.4 12.0 12.6 12.6 13.0 12.7 12.8 Sales Price ($ per short ton) Retail $2,755 $2,732 $2,831 $2,872 $2,984 $3,082 $3,095 $3,201 $3,214 Production Converted Products (cases in millions) 9.6 11.4 11.9 12.2 12.1 12.9 12.3 12.7 12.6 © Clearwater Paper Corporation 2023 16

RECONCILIATION OF ADJUSTED EBITDA ($ IN MILLIONS) March 31, 2023 2022 2023 2023 2022 Net income $ 29.7 $ 14.7 $ 23.8 $ 53.5 $ 31.3 Income tax provision 10.2 4.4 8.4 18.6 10.4 Interest expense, net 7.5 10.7 7.6 15.1 19.3 Depreciation and amortization expense 24.6 25.7 24.8 49.4 51.2 Other operating charges, net (0.4) 5.7 1.1 0.6 6.3 Other non-operating expense (0.1) 1.7 (0.1) (0.2) 3.3 Adjusted EBITDA $ 71.5 $ 63.0 $ 65.7 $ 137.2 $ 121.9 Pulp and Paperboard segment income $ 42.0 $ 52.0 $ 57.1 $ 99.1 $ 102.3 Depreciation and amortization 9.3 9.2 9.1 18.5 18.5 Adjusted EBITDA Paperboard segment $ 51.3 $ 61.2 $ 66.2 $ 117.6 $ 120.8 Consumer Products segment income $ 25.0 $ 3.5 $ 4.2 $ 29.2 $ 4.4 Depreciation and amortization 14.7 15.6 15.0 29.7 30.9 Adjusted EBITDA Consumer Products segment $ 39.7 $ 19.1 $ 19.2 $ 58.9 $ 35.3 Corporate and other expense $ (20.1) $ (18.2) $ (20.4) $ (40.6) $ (36.0) Depreciation and amortization 0.6 0.9 0.6 1.2 1.8 Adjusted EBITDA Corporate and other $ (19.5) $ (17.3) $ (19.8) $ (39.3) $ (34.2) Pulp and Paperboard segment $ 51.3 $ 61.2 $ 66.2 $ 117.6 $ 120.8 Consumer Products segment 39.7 19.1 19.2 58.9 35.3 Corporate and other (19.5) (17.3) (19.8) (39.3) (34.2) Adjusted EBITDA $ 71.5 $ 63.0 $ 65.7 $ 137.2 $ 121.9 June 30, June 30, Six Months EndedQuarter Ended © Clearwater Paper Corporation 2023 17

© Clearwater Paper Corporation 2023 RECONCILIATION OF ADJUSTED INCOME ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2023 2022 2023 2022 Net income 29.7$ 14.7$ 53.5$ 31.3$ Add back: Income tax provision 10.2 4.4 18.6 10.4 Income before income taxes 39.9 19.1 72.1 41.7 Add back: Debt retirement costs - 0.3 - 0.5 Other operating charges, net (0.4) 5.7 0.6 6.3 Adjusted income before tax 39.4 25.2 72.8 48.5 Normalized income tax provision 9.9 6.3 18.2 12.1 Adjusted income 29.6$ 18.9$ 54.6$ 36.4$ Weighted average diluted shares (thousands) 16,958 17,078 17,003 17,080 Adjusted income per diluted share 1.74$ 1.11$ 3.21$ 2.13$ Six Months Ended June 30,Quarter Ended June 30, 18

ADDITIONAL RECONCILIATIONS Net Debt Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 June 30, 2022 Sept 30, 2022 Dec 31, 2022 Mar 31, 2023 June 30, 2023 Cash $ 27.8 $ 25.2 $ 36.4 $69.5 $50.8 $53.7 $16.7 $41.7 Current debt 1.6 1.6 1.6 1.0 1.0 0.9 0.9 0.9 Long term debt 676.5 637.6 617.7 589.9 564.9 564.9 564.9 564.8 add: Deferred debt costs 5.6 4.8 4.4 3.8 3.6 3.4 3.2 3.0 less: Financing leases (19.5) (19.1) (18.7) (24.7) (24.4) (24.2) (24.0) (23.7) Subtotal 664.2 624.9 605.0 570.0 545.1 545.0 545.0 545.0 Net debt $ 636.4 $ 599.8 $568.6 $500.5 $494.2 $491.3 $528.3 503.3 Free Cash Flow Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Cash from operations $ 16.3 $ 32.1 $41.1 $78.5 $13.3 $17.4 $(9.1) $46.0 Additions to property, plant and equipment, net of proceeds from sales (8.9) 4.8 (7.9) (5.4) (6.7) (13.5) (21.5) (12.8) Free cash flow $ 7.4 $ 36.9 $33.2 $73.1 $6.6 $3.9 $(30.6) $33.2 ($ IN MILLIONS) © Clearwater Paper Corporation 2023 19

$2 $10 $22 $4 $20 $17 $5 $7 $28 $30 $24 $27 $5 - $7 $30 - $35 2017 2018 2019 2020 2021 2022 2023e 2024e Q1 Q2 Q3 Q4 Total $34 MAJOR MAINTENANCE SCHEDULE ADJUSTED EBITDA IMPACT ($ IN MILLIONS) 1. This information is based upon management’s current assumptions and estimates. 2. See “Forward-Looking Statements” on page 2. 1,2 © Clearwater Paper Corporation 2023 20 1

Cover	Aug. 01, 2023
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Aug. 01, 2023
Entity Registrant Name	CLEARWATER PAPER CORPORATION
Entity Incorporation, State or Country Code	DE
Entity File Number	001-34146
Entity Tax Identification Number	20-3594554
Entity Address, Address Line One	601 West Riverside,
Entity Address, Address Line Two	Suite 1100
Entity Address, Postal Zip Code	99201
Entity Address, State or Province	WA
Entity Address, City or Town	Spokane,
City Area Code	509
Local Phone Number	344-5900
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	CLW
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001441236
Amendment Flag	false