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Share Name | Share Symbol | Market | Type |
---|---|---|---|
ClearWater Paper Corporation | NYSE:CLW | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.15 | -0.29% | 51.00 | 51.46 | 50.45 | 51.34 | 121,531 | 01:00:00 |
Clearwater Paper Corporation (NYSE:CLW) today reported financial results for the second quarter of 2011.
The company reported net earnings of $13.9 million, or $1.17 per diluted share, for the second quarter of 2011, compared to net earnings of $20.6 million, or $1.75 per diluted share, for the second quarter of 2010. The second quarter 2011 earnings before interest, taxes, depreciation and amortization, or EBITDA, was $52.4 million, compared to $49.2 million in the second quarter of 2010. EBITDA in the second quarter of 2011 includes $9.1 million of Cellu Tissue integration-related expenses and tissue expansion costs related to Shelby.
Clearwater Paper acquired Cellu Tissue Holdings, Inc. on December 27, 2010. The second quarter of 2011 includes Cellu Tissue’s results, which is the primary reason for many of the variances on a year-over-year basis.
“Second quarter results were solid after considering the significant cost pressures for many of our inputs,” said Gordon Jones, chairman, president and chief executive officer. “We continue to make good progress on integrating Cellu Tissue and on increasing the value we expect this acquisition to bring to Clearwater Paper. As a result, we are pleased to increase our estimated net annual synergies from $15-$20 million to $35-$40 million, expected to be achieved by the end of 2012.
“Additionally, we recently celebrated the grand opening of our converting and distribution facility at Shelby, North Carolina, with the start-up of the first two converting lines,” added Jones.
The company also separately announced today a 2-for-1 stock split in the form of a stock dividend and the Board of Director’s approval of a $30 million stock repurchase program.
SECOND QUARTER 2011 SEGMENT PERFORMANCE
Consumer Products
Net sales in the Consumer Products segment were $269.1 million for the second quarter of 2011, as compared to second quarter 2010 net sales of $145.4 million. The increase in net sales was primarily attributable to the inclusion of Cellu Tissue's operating results for the full quarter. Operating income for the second quarter of 2011 was $6.9 million, compared with operating income of $25.6 million for the second quarter of 2010. The decrease in operating income was primarily the result of increased operating costs, including $9.1 million of integration-related expenses and Shelby expansion costs, as well as $1.1 million in depreciation and amortization expense associated with acquisition accounting.
Pulp and Paperboard
Net sales of $225.5 million for the second quarter of 2011 were up 13.6%, compared to second quarter 2010 net sales of $198.5 million. Operating income for the quarter rose to $34.5 million, compared to $22.7 million for the second quarter of 2010.
Taxes
The actual income tax rate for the second quarter of 2011 was 38.3%, compared to an actual rate of 38.0% for the second quarter of 2010. The estimated annual effective tax rate for 2011, without discrete items, is expected to be approximately 35.2%.
Note Regarding Use of Non-GAAP Financial Measure
In this press release, the company presents its results for the second quarter of 2011 and 2010, including EBITDA. The EBITDA amounts are not in accordance with generally accepted accounting principles (GAAP) and accordingly a reconciliation of EBITDA to net earnings determined in accordance with GAAP is included at the end of this press release.
CONFERENCE CALL INFORMATION
A live audio webcast and conference call will be held today, Thursday, July 28, 2011 at 8 a.m. Pacific time (11 a.m. Eastern time). Investors may access the conference call by dialing 877-303-9241 (for U.S./Canada investors) or 760-666-3575 (for international investors). The audio webcast may be accessed on the company's website at http://ir.clearwaterpaper.com/events.cfm. An accompanying presentation including supplemental information will be available for downloading at the same site at 7 a.m. Pacific time (10:00 a.m. Eastern time). The webcast will be audio only. Investors are recommended to download the accompanying presentation prior to the call.
For those unable to participate in the call, an archived recording will be available through the Clearwater Paper Corporation website www.clearwaterpaper.com under "Investor Relations" following the conference call.
ABOUT CLEARWATER PAPER
Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, parent roll tissue, machine glazed tissue, bleached paperboard, pulp and wood products at 15 manufacturing locations in the U.S. and Canada. The company is a premier supplier of private label tissue to major retailers and wholesale distributors, which include grocery, drug, mass merchants and discount stores. The company also produces bleached paperboard used by quality-conscious printers and packaging converters. Clearwater Paper's more than 4,000 employees build shareholder value by developing strong customer partnerships through quality and service.
FORWARD-LOOKING STATEMENTS
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 the integration of Cellu Tissue, our estimated net annual synergies relating to the acquisition of Cellu Tissue, the stock split, the stock repurchase program, expected results and the company’s estimated tax rate. 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, fluctuations and volatility in the company’s stock price; risks and uncertainties arising from difficulties with the integration process or the realization of the benefits expected from the acquisition of Cellu Tissue; the company's ability to complete its new facilities; customers' product preferences; market acceptance of product price increases and competitive pricing pressure for the company's products; changes in the United States and international economies; changes in raw material and energy costs; cyclical industry conditions; loss of a large customer; changes in the Alternative Fuel Mixture Tax Credit or Cellulosic Biofuel Producer Credit regulations and the company's eligibility for such tax credits; changes in transportation costs and disruptions in transportation services; unanticipated manufacturing disruptions; changes in general and industry-specific laws and regulations; unforeseen environmental liabilities or expenditures; labor disruptions; and other risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission. 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.
Clearwater Paper Corporation Condensed Consolidated Statements of Operations Unaudited (Dollars in thousands - except per-share amounts) Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010 Net sales $ 494,627 100% $ 343,860 100% $ 960,457 100% $ 674,481 100% Costs and expenses: Cost of sales (433,358) 88% (286,415) 83% (848,278) 88% (588,379) 87% Selling, general and administrative expenses (27,476) 6% (20,145) 6% (54,840) 6% (38,238) 6% Total operating costs and expenses (460,834) 93% (306,560) 89% (903,118) 94% (626,617) 93% Income from operations 33,793 7% 37,300 11% 57,339 6% 47,864 7% Interest expense, net (10,992) 2% (4,132) 1% (22,325) 2% (8,417) 1% Other, net (229) - (705) - Earnings before income taxes 22,572 5% 33,168 10% 34,309 4% 39,447 6% Income tax provision (8,649) 2% (12,600) 4% (14,782) 2% (18,421) 3% Net earnings $ 13,923 3% $ 20,568 6% $ 19,527 2% $ 21,026 3% Net earnings per common share: Basic $ 1.21 $ 1.79 $ 1.70 $ 1.83 Diluted 1.17 1.75 1.65 1.78 Average shares outstanding (in thousands): Basic 11,519 11,478 11,516 11,468 Diluted 11,854 11,777 11,855 11,786
Clearwater Paper Corporation Condensed Consolidated Balance Sheets Unaudited (Dollars in thousands) June 30, December 31, 2011 2010 ASSETS Current assets: Cash $ 34,476 $ 18,928 Restricted cash 1,656 3,637 Short-term investments 92,000 126,095 Receivables, net 182,002 153,335 Taxes receivable 12,157 10,354 Inventories 223,604 228,321 Deferred tax assets 40,915 37,374 Prepaid expenses 9,177 11,415 Total current assets 595,987 589,459 Property, plant and equipment, net 696,836 654,456 Goodwill 229,533 229,533 Intangible assets, net 53,000 56,400 Other assets 13,505 15,488 $ 1,588,861 $ 1,545,336 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 183,226 $ 184,604 Current liability for pensions and other postretirement employee benefits 9,749 9,749 Current portion of long-term debt 15,215 760 Total current liabilities 208,190 195,113 Long-term debt, net of current portion 523,583 538,314 Liability for pensions and other postretirement employee benefits 180,405 187,116 Other long-term obligations 35,133 23,369 Accrued taxes 73,373 72,011 Deferred tax liabilities 75,454 61,064 Accumulated other comprehensive loss, net of tax (94,806 ) (98,352 ) Stockholders' equity, excluding accumulated other comprehensive loss, net of tax 587,529 566,701 $ 1,588,861 $ 1,545,336
Clearwater Paper Corporation Segment Information Unaudited (Dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2011
2010 (1)
2011
2010 (1)
Segment net sales: Consumer Products $ 269,118 54 % $ 145,373 42 % $ 538,370 56 % $ 283,196 42 % Pulp and Paperboard 225,509 46 % 198,487 58 % 422,087 44 % 391,285 58 % Total segment net sales $ 494,627 100 % $ 343,860 100 % $ 960,457 100 % $ 674,481 100 % Operating income (loss): Consumer Products $ 6,868 20 % $ 25,643 69 % $ 20,683 36 % $ 51,630 108 % Pulp and Paperboard 34,456 102 % 22,660 61 % 50,104 87 % 14,743 31 % 41,324 48,303 70,787 66,373 Corporate and eliminations (7,531 ) -22 % (11,003 ) -29 % (13,448 ) -23 % (18,509 ) -39 % Income from operations $ 33,793 100 % $ 37,300 100 % $ 57,339 100 % $ 47,864 100 %
(1) Prior period net sales and segment operating income have been adjusted to reflect our change in accounting for intersegment pulp transfers. Commencing January 1, 2011, rather than recording the intersegment transfer of pulp through net sales, the costs of pulp are transferred from the Pulp and Paperboard segment to the Consumer Products segment.
Clearwater Paper Corporation Reconciliation of Consolidated Net Earnings to EBITDA Unaudited (Dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2011 2010 2011 2010 Net earnings $ 13,923 $ 20,568 $ 19,527 $ 21,026 Add back: Interest expense, net 10,992 4,132 22,325 8,417 Income tax provision 8,649 12,600 14,782 18,421 Depreciation and amortization 18,870 11,861 37,539 23,727 EBITDA $ 52,434 $ 49,161 $ 94,173 $ 71,591
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