The following is a summary of the Clearwater Paper Corporation (CLW) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Clearwater Paper reported Q3 adjusted EBITDA of $64 million, which fell within their guidance range despite a $5 million negative impact from Hurricane Helene.

• The company experienced significant gains from the sale of their tissue business to Sofidel for $1.06 billion, expecting to net approximately $850 million in cash after adjustments.

• Debt reduction was achieved by using the proceeds from the tissue business sale to pay off all outstanding credit facilities, retaining only the 2028 notes with a principal of $275 million.

• A $100 million share repurchase program was approved, underscoring their capital allocation strategy and confidence in the company's value.

Business Progress:

• Clearwater Paper has strategically shifted focus post-sale of its tissue business, concentrating on establishing itself as a premier paperboard packaging supplier in North America.

• Investment in operational and cost improvements, expanding product ranges, and a strong commitment to sustainability were highlighted.

• The company has outlined plans for internal projects aimed at innovation in products, including lighter weight paperboard options and compostable solutions, demonstrating adaptability to market trends and consumer preferences.

Opportunities:

• No explicit opportunities detected.

Risks:

• The company acknowledged the cyclical nature of the industry, with the current position being a downturn due to excess SBS capacity and a slowdown in consumer spending.

• Despite these challenges, the strategic sale of the tissue business and ongoing industry adaptations are expected to stabilize and strengthen the company's market position.

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