SPOKANE, Wash.-- Mar. 12, 2019 -- Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the fourth quarter and full year of 2018.
The company reported net sales of $428.7 million for the fourth quarter of 2018, which was $8.0 million or 1.8% lower than net sales of $436.7 million for the fourth quarter of 2017. The decrease was primarily due to the sale of the company's mill in Ladysmith, Wisconsin in August 2018 and lower tissue shipments, partially offset by higher paperboard shipments and pricing. Net loss determined in accordance with generally accepted accounting principles, or GAAP, for the fourth quarter of 2018 was $187.8 million, or $11.39 loss per diluted share, compared to net earnings for the fourth quarter of 2017 of $80.9 million, or $4.88 per diluted share, which included a $70 million tax benefit related to the 2017 tax law changes.
The net loss included a $195.1 million non-cash goodwill impairment charge related to the consumer products business taken in the fourth quarter of 2018. The impairment charge relates to the goodwill arising out of the company's acquisition of Cellu Tissue Holdings, Inc. in 2010 and will not result in any cash expenditures or affect the company's cash position, cash flow from operating activities, liquidity position or availability under its credit facilities.
Excluding certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, fourth quarter 2018 adjusted net earnings were $7.4 million, or $0.45 per diluted share, compared to fourth quarter 2017 adjusted net earnings of $14.4 million, or $0.87 per diluted share.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, were $(149.7) million for the fourth quarter of 2018, compared to $52.2 million for the fourth quarter of 2017. Adjusted EBITDA for the quarter was $45.5 million, down 21.0% compared to fourth quarter 2017 Adjusted EBITDA of $57.5 million.
For the full year 2018, the company reported net sales of $1.7 billion, which was flat with 2017 net sales. Price increases in tissue and paperboard helped offset reduced tissue shipment volumes resulting primarily from the sale of the Ladysmith, Wisconsin mill and changes in customer orders. Net loss determined in accordance with GAAP for 2018 was $143.8 million, or $8.72 loss per diluted share, compared to net earnings of $97.3 million, or $5.88 per diluted share in 2017. The net loss in 2018 included the goodwill impairment charge described above, and net earnings in 2017 included the significant tax benefit described above. Excluding certain non-core items identified in the attached Reconciliation of Non-GAAP Financial Measures, 2018 adjusted net earnings were $42.0 million, or $2.55 per diluted share, compared to 2017 adjusted net earnings of $38.4 million, or $2.32 per diluted share.
EBITDA was $(0.9) million for full year 2018, compared to $177.3 million for 2017. Adjusted EBITDA for the year was $176.7 million compared to 2017 Adjusted EBITDA of $189.5 million.
“We are pleased to deliver solid fourth quarter results driven largely by the strong execution of our pulp and paperboard business,” said Linda K. Massman, president and chief executive officer. “Also, by executing against our strategic priorities, in 2018 we were able to successfully implement a regional consumer products operating model; accelerate the start-up of converting lines in Shelby, North Carolina; and complete the sale of a recycled tissue mill in Ladysmith, Wisconsin.”
“While the performance of our consumer products business continues to be impacted by an increasingly competitive market, we have made great progress across this business, and are encouraged by the improvements in our operating results. The strength of our longer-term fundamentals and the positive consumer trends for private label brands give us confidence that the company is well-positioned in a rapidly-evolving market.”
“Throughout 2019 we will be focused on two key areas - installing and operating the new paper machine at our Shelby plant; and optimizing our facilities and equipment to generate greater cash flow, increase our financial flexibility and pay down bank debt - all of which we expect will deliver significant value for our shareholders.”
Source: Clearwater Paper