Clearwater Paper Corporation (NYSE:CLW) Q1 2023 Earnings Conference Call May 2, 2023 5:00 PM ET

Company Participants

Sloan Bohlen - Investor Relations

Arsen Kitch - President and Chief Executive Officer

Mike Murphy - Chief Financial Officer

Conference Call Participants

Paul Quinn - RBC Capital Markets

Operator

Hello and welcome to the Clearwater Paper Corporation’s First Quarter 2023 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Sloan Bohlen, Investor Relations. Please go ahead.

Sloan Bohlen

Thank you, Sarah. Good afternoon and thank you for joining Clearwater Paper’s first quarter 2023 earnings conference call. Joining me on the call today are Arsen Kitch, President and Chief Executive Officer; and Mike Murphy, Chief Financial Officer. Financial results for the first quarter of 2023 were released shortly after today’s market close, along with the filing of our 10-Q. You will find a presentation of supplemental information, including a slide providing the company’s current outlook posted on the Investor Relations page of our website at clearwaterpaper.com.

Additionally, we will be providing certain non-GAAP information in this afternoon’s discussion. A reconciliation of the non-GAAP information to comparable GAAP information is included in the press release and in the supplemental information provided on our website. Please note Slide 2 of our supplemental information covering forward-looking statements. Rather than rereading this slide, we are going to incorporate it by reference into our prepared remarks.

With that, let me turn the call over to Arsen.

Arsen Kitch

Good afternoon and thank you for joining us today. Now please turn to Slide 3. We had a solid first quarter in 2023 with better results as compared to the first quarter of 2022. We reported net sales of $525 million and adjusted EBITDA of $66 million. Let me share a few highlights. Prices increased in both paperboard and tissue as compared to the first quarter of 2022. Private branded tissue share strengthened as consumers sought to offset inflation. Paperboard demand softened as customers manage down their inventories. We resolved the operational issues that we experienced in the fourth quarter of last year. Inflation moderated as compared to the fourth quarter, particularly in pulp, energy and transportation. And finally, we repurchased $1.7 million of shares during the quarter and have $23 million remaining on our buyback authorization.

With that, let’s discuss some additional details about both of our businesses. Let’s start on Slide 4 with a few comments on our paperboard business. In 2021 and 2022, the industry experienced high operating rates with strong demand. As a result, RISI reported price increases for the U.S. market that totaled $250 per ton in 2022. Based on our previously announced price increases, we expect year-over-year improvements to carry into 2023.