Clearwater Paper Corporation Q4 FY2025 earnings call

2025 was a transformational year for Clearwater Paper. The integration of the Augusta Mill and separation of the tissue business were completed ahead of schedule. Net sales increased due to higher shipments. Adjusted EBITDA improved driven by cost control. Completed major maintenance outages on schedule with lower costs. Delivered fixed cost reductions. Repurchased shares. Industry dynamics were challenging with paperboard facing supply - demand issues. Actions taken include focusing on efficient operation, announcing price increases, planning to balance supply and demand, and diversifying product portfolio like launching VOLURA and working on CUK investment

2025 was a transformational year for Clearwater Paper as it operated as a paperboard - focused business. Net sales increased by 12% year - over - year, driven by a 14% rise in shipments from operating the Augusta Mill for a full year. Adjusted EBITDA was $107,000,000, an improvement of $71,000,000 compared to the prior year. SG&A declined to 6.5% of net sales from 8.4% in 2024. For the fourth quarter, net sales were $386,000,000, flat year - over - year, and adjusted EBITDA from continuing operations was $20,000,000. For the full year, net sales were $1,600,000,000, up 12% year - over - year, and adjusted EBITDA from continuing operations was $107,000,000

For 2026, revenue is expected to be $1,400,000,000 to $1,500,000,000 with flat to modest shipment growth. There is approximately $70,000,000 pricing headwind from 2025 carryover. First - quarter adjusted EBITDA is expected to be approximately breakeven. Capital expenditures will be in the $65,000,000 to $75,000,000 range. Working capital improvement of approximately $20,000,000 is expected. RISI projects SBS operating rates to improve to 90% in 2026 with price increase, which would improve margins

Risks include challenging industry supply - demand dynamics leading to price and margin pressure, RISI price index reporting discrepancies causing pricing headwinds, operational disruptions and cost increases due to weather, ongoing capacity excess issues affecting future operations, and uncertainties in product portfolio diversification projects

Questions and answers include discussion on customer grade substitution, confidence in demand improvement, plans for capacity reduction, views on share repurchases, fiber cost risks and cadence of working capital improvement