Clearwater Paper Corporation (NYSE:CLW)
today reported financial results for the third quarter of 2012.
The company reported net sales of $480.2 million for the third quarter of 2012, down 4.2% compared to $501.1 million for the third quarter of 2011 due primarily to the sale of the company’s sawmill in the fourth quarter of last year. Net earnings were $19.1 million, or $0.80 per diluted share in the third quarter of 2012, compared to $8.6 million and $0.37, respectively, for the third quarter of 2011. Earnings before interest, taxes, depreciation and amortization, or EBITDA, was $59.0 million this quarter compared to $46.2 million in the same quarter last year.
“Strong Pulp and Paperboard results drove solid third quarter EBITDA,” said Gordon Jones, chairman and chief executive officer. “Additionally, our new paper machine at Shelby, North Carolina, remains on track to be operational in the fourth quarter of 2012. In connection with our acquisition of Cellu Tissue, we now expect approximately $29 million in net cost savings from synergies in 2012 and $35-$40 million annually beginning in 2013.”
The company repurchased 50,300 shares of its common stock at a total cost of $1.9 million during the third quarter of 2012. Since announcing its $30.0 million share buyback authorization in July 2011, the company has repurchased 622,082 shares at a total cost of $20.7 million for an average share price of $33.28.
THIRD QUARTER 2012 SEGMENT PERFORMANCE
Net sales in the Consumer Products segment were $293.0 million for the third quarter of 2012, as compared to third quarter 2011 net sales of $285.2 million. The 2.7% increase was attributable to higher all around volumes, which more than offset a slight decline in net selling price per ton. Operating income for the third quarter of 2012 more than doubled to $18.5 million as compared with the third quarter of 2011 primarily due to higher net sales and lower operating costs, particularly lower pulp costs.
Pulp and Paperboard
- Tissue sales volumes increased 3.5% to a record 138,848 tons in the third quarter of 2012 as increased parent roll demand was met by utilizing inventory as well as strong paper machine production at our existing facilities.
- Average net selling prices decreased 0.8% to $2,110 per ton in the third quarter of 2012 due to higher non-retail sales volume.
- The company realized $8.6 million in net synergies related to the Cellu Tissue acquisition during the third quarter of 2012.
Net sales of $187.3 million for the third quarter of 2012 were down 13.3%, compared to third quarter 2011 net sales of $215.9 million. The decrease in net sales was primarily due to the divestiture of the company’s sawmill last November and a reduction in the sale of external pulp due to increased internal usage. Operating income for the quarter increased 31.2% to $34.4 million, compared to $26.3 million for the third quarter of 2011. The improvement was primarily due to lower operating costs, including no major maintenance during the third quarter of 2012 as compared to $3.1 million in the third quarter of 2011.
- Stand alone paperboard net sales in the third quarter of 2012 increased 3.0% to $184.9 million as compared to the third quarter of 2011 due primarily to a 5.5% increase in paperboard volumes to 195,097 tons.
- External pulp sales in the third quarter of 2012 of $2.4 million declined from $14.3 million in the third quarter of 2011 due primarily to the company’s strategy to use more pulp internally.
The company's effective tax rate for the quarter was 40.2%, which was down slightly from 40.7% in the third quarter of 2011 and up from 39.2% in the second quarter of 2012. The company expects its annual effective tax rate to be approximately 43%-44% for 2012, including discrete items.