Clearwater Paper reported financial results for the fourth quarter of 2016.
The company reported net sales of $425.6 million for the fourth quarter of 2016, down 1.4% compared to net sales of $431.6 million for the fourth quarter of 2015 due primarily to lower paperboard prices and shipment volumes. Net earnings determined in accordance with generally accepted accounting principles, or GAAP, for the fourth quarter of 2016 were $9.3 million, or $0.56 per diluted share, compared to $11.6 million, or $0.65 per diluted share, for the fourth quarter of 2015.
The decrease in net earnings was due primarily to lower paperboard pricing and shipment volumes and higher costs related to the impact of a fire at the company's Las Vegas facility. These items were partially offset by lower input costs for pulp and transportation. Excluding certain non-core items identified in the attached Reconciliation of non-GAAP financial measures, fourth quarter 2016 adjusted net earnings were $13.8 million, or $0.82 per diluted share, compared to fourth quarter 2015 adjusted net earnings of $13.3 million, or $0.75 per diluted share.
Earnings before interest, taxes, depreciation and amortization, or EBITDA, was $49.3 million for the fourth quarter of 2016 compared to $58.2 million for the fourth quarter of 2015. Adjusted EBITDA for the quarter was $54.1 million, down 8.1% compared to fourth quarter 2015 Adjusted EBITDA of $58.9 million. The $4.8 million decrease in Adjusted EBITDA was a result of the same factors affecting GAAP net earnings in the fourth quarter of 2016.
“We achieved fourth quarter and full year 2016 results at the high end of our outlook thanks to our team's relentless focus on managing costs while producing and delivering high-quality products to our valued customers,” said Linda K. Massman, president and chief executive officer. “Our priorities for 2017 are to complete what remains of our previously announced strategic projects, integrate our Manchester Industries acquisition and begin work on the newly announced paper machine in Shelby, North Carolina.”
Fourth quarter 2016 segment performance
Consumer Products
Net sales in the Consumer Products segment were $242.1 million for the fourth quarter of 2016, up 1.6% compared to fourth quarter 2015 net sales of $238.3 million. This increase was due to market share gains, which resulted in growth of total tissue volume and a richer product mix that included a 6.4% increase in retail tons sold.
Consumer Products had operating income of $13.8 million in the fourth quarter of 2016, compared to operating income of $10.8 million in the fourth quarter of 2015. Adjusted operating income of $17.0 million for the fourth quarter of 2016 was up from $11.5 million in the same period in 2015, after adjusting for certain non-core items identified in the attached Reconciliation of non-GAAP financial measures. Consumer Products operating margin increased to 5.7% in the fourth quarter of 2016 from 4.5% in the 2015 period.
The adjusted operating margin increased from 4.8% in the fourth quarter of 2015 to 7.0% in the most recent period due to a higher margin product mix and lower transportation costs which were partially offset by higher costs related to a fire at the company's Las Vegas facility.
Total tissue sales volumes of 96,886 tons in the fourth quarter of 2016 increased by 0.8% and converted product cases shipped were 12.9 million, up 2.1%, each compared to the fourth quarter of 2015.Average tissue net selling prices increased 0.7% to $2,496 per ton in the fourth quarter of 2016, compared to the fourth quarter of 2015.
Pulp and Paperboard
Net sales in the Pulp and Paperboard segment were $183.4 million for the fourth quarter of 2016, down 5.1% compared to fourth quarter 2015 net sales of $193.3 million. The decrease was primarily due to lower paperboard pricing and shipment volume. Operating income for the quarter decreased $11.9 million to $27.6 million, compared to $39.5 million for the fourth quarter of 2015, primarily due to lower paperboard prices and increased wood fiber prices in the Idaho region.
Paperboard sales volumes decreased 1.1% to 199,415 tons in the fourth quarter of 2016, compared to 201,580 tons in the fourth quarter of 2015.Paperboard net selling prices decreased 3.8% to $920 per ton compared to the fourth quarter of 2015.