SPOKANE, Wash. -- May 1, 2019-- Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the first quarter of 2019.
The company reported net sales of $428.8 million for the first quarter of 2019, which were $8.2 million or 1.9% lower than net sales of $437.0 million for the first quarter of 2018. The decrease was due to lower paperboard and tissue shipments including the impact from the sale of the company's mill in Ladysmith, Wisconsin in August 2018, partially offset by higher tissue and paperboard pricing.
Net earnings determined in accordance with generally accepted accounting principles, or GAAP, for the first quarter of 2019 were $3.8 million, or $0.23 per diluted share, compared to net earnings for the first quarter of 2018 of $2.6 million, or $0.16 per diluted share. The increase in net earnings was mainly due to improved operating results in paperboard driven by higher pricing and the absence of reorganization expenses associated with selling, general and administrative cost reduction efforts in 2018, offset by a tax provision in the first quarter of 2019 versus a tax benefit in the first quarter of 2018. Excluding certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, first quarter 2019 adjusted net earnings were $3.5 million, or $0.21 per diluted share, compared to first quarter 2018 adjusted net earnings of $5.2 million, or $0.31 per diluted share.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, were $38.9 million for the first quarter of 2019, compared to $35.4 million for the first quarter of 2018. Adjusted EBITDA for the quarter was $39.8 million, down 3.0% compared to first quarter 2018 Adjusted EBITDA of $41.1 million. In 2018, the company adopted a new accounting standard which requires all net periodic pension and postretirement costs (other than service cost) to be presented on a line outside of operating income. Beginning in the first quarter of 2019, the company is excluding these non-operating costs from its calculation of Adjusted EBITDA. The corresponding Adjusted EBITDA amount for the 2018 period has been reclassified to conform to this presentation.
“The Adjusted EBITDA of $39.8 million achieved in the first quarter of 2019 included approximately $3 million of additional professional fees associated largely with the assessment of material weaknesses and our evaluation of goodwill impairment, both of which were previously reported in the fourth quarter of 2018. It also included an approximate $4 million impact from significantly higher utility costs associated with an unusual gas pipeline disruption that occurred during the first quarter of 2019,” said Linda K. Massman, president and chief executive officer. “Excluding those items, our Adjusted EBITDA would have compared favorably to Adjusted EBITDA achieved in the first quarter of 2018 and would have been comparable to Adjusted EBITDA for the fourth quarter of 2018. For the remainder of 2019, we will be focused on ramping tissue production at our Shelby, North Carolina mill to meet the growing demand for ultra-quality tissue and reducing costs throughout our facilities to generate stronger cash flow and improved returns on invested capital.”
Source: Clearwater Paper