Clearwater Paper Corporation (NYSE: CLW), a premier supplier of bleached paperboard and quality tissue products, today announced an update to the company’s previous outlook for the fourth quarter and full year 2022.
Due to higher-than-expected major maintenance related costs at the company’s Lewiston, Idaho mill, and other operational issues, the company now expects Adjusted EBITDA for the fourth quarter of 2022 to be in the range of $28 to $34 million and full year 2022 Adjusted EBITDA of $227 to $233 million. The planned major maintenance outage at Lewiston has now been completed and the mill is operating normally. The other operational issues, particularly at the company’s Cypress Bend, Arkansas mill, have been identified and are being addressed.
With the completion of the outage in Lewiston, the company now intends to perform its next planned major maintenance outage at that site in early 2024, in conjunction with the recovery boiler tube replacement project. As a result, based on current assumptions, the company expects to incur approximately $28 million of lower major maintenance related expenses and other impacts in 2023 compared to 2022.
“We are glad to have the maintenance outage behind us. Despite the setbacks experienced, we completed the work as planned and are now anticipating the next Lewiston outage in early 2024,” said Arsen Kitch, president and chief executive officer. “We continue to experience solid demand for our products and believe that we are well positioned for continued success in 2023.”
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
This press release includes Adjusted EBITDA which is not calculated in accordance with GAAP. The company presents this non-GAAP amount because management believes it assists 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.
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 outlook and Adjusted EBITDA, major maintenance, timing, and costs associated with maintenance outages, product demand, market conditions, and operational and financial performance. 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: impact of the COVID-19 pandemic on our operations, our suppliers' operations and our customer demand; changes in the cost and availability of wood fiber and wood pulp; changes in freight costs and disruptions in transportation services; manufacturing or operating disruptions, including IT system implementation failures, equipment malfunctions and damage to our manufacturing facilities; changes in costs for and availability of packaging supplies, chemicals, energy and maintenance and repairs; changes in expenses; 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, 2021. 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.