Clearwater Paper Corporation (NYSE:CLW) Q4 2019 Earnings Conference Call - Final Transcript

Feb 26, 2020 • 05:00 pm ET


Clearwater Paper Corporation (NYSE:CLW) Q4 2019 Earnings Conference Call - Final Transcript


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Welcome to Clearwater Paper Corporation's Fourth Quarter and Full Year 2019 Earnings Conference Call. As a reminder, this call is being recorded today, February 26, 2020.

I would now like to turn the conference over to Mr. Sloan Bohlen, Investor Relations. Please go ahead.

Sloan Bohlen

Thank you, Dalam. Good afternoon, and thank you for joining Clearwater Paper's fourth quarter and full year 2019 earnings conference call. Joining me on the call today are Linda Massman, President and Chief Executive Officer; and Bob Hrivnak, Chief Financial Officer. Financial results for the fourth quarter and full year 2019 were released shortly after today's market close.

You will find a presentation of supplemental information, including an outlook slide providing the company's current outlook as to certain costs, price and mix, shipment volume, and other items for the first quarter of 2020, and for the full year of 2020, which is posted on the Investor Relations page of our website at Additionally we will be providing certain non-GAAP information in this afternoon's discussion. A reconciliation of the non-GAAP information to the comparable GAAP information is included in the press release or in the supplemental information provided on our website.

Please note Slide 2 of our supplemental information, rather than reiterating the slide, I'm going to incorporate it by referenced into our prepared remarks. Linda Massman will begin today's call with an ovreview of the fourth quarter 2019, Bob Hrivnak will then follow with a detailed review of the results for the quarter and the full year. Then Linda will conclude our prepared remarks with an overview of the business environment and update on our strategic projects, and an outlook for certain items in the first quarter and full year 2020. And then, we'll open the call for the questions-and-answers.

And now, I'll turn the call over to Linda.

Linda K. Massman

Thank you, Sloan. Hello, everyone and thank you for joining us today. We will begin on Slide 3 of the supplemental to provide some business highlights for the fourth quarter. We finished the quarter with net sales of $436 million, which were driven by another strong quarter in tissue, which grew sequentially for the fifth consecutive quarter and were up 8% over the fourth quarter of 2018. Total sales growth was partially offset by lower paperboard shipments, given a challenging compare from the fourth quarter of 2018.

To be clear, we are enjoying relatively strong paperboard conditions with favorable backlogs compared to recent history for this time of year. Most importantly, margins across both segments expanded both sequentially and on a year-over-year basis to drive a 4% operating margin for the fourth quarter. Bob will touch on more of this in his prepared remarks. In terms of adjusted EBITDA, lower input pulp and fiber costs, as well as lighter maintenance and expense timing drove adjusted EBITDA of $52 million. The best result we've had over the last eight quarters, despite a maintenance outage at our Arkansas mill.

Now turning to Slide 4. Let's look back at 2019.