Clearwater Paper Corp Files 2023 Annual Report on Form 10-K

TL;DR

<b>Clearwater Paper Corp has submitted its 2023 annual report (10-K), detailing its financial performance and business operations for the fiscal year ending December 31, 2023.</b>

AI Summary

Clearwater Paper Corp (CLW) filed a Annual Report (10-K) with the SEC on February 20, 2024. Clearwater Paper Corp filed its 2023 Form 10-K on February 20, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal executive offices are located at 601 West Riverside Avenue, Suite 1100, Spokane, WA 99201. Clearwater Paper Corp was formerly known as Potlatch Forest Products Corp, with a name change effective July 28, 2008. The company is classified under the SIC code 2631 for PAPERBOARD MILLS.

Why It Matters

For investors and stakeholders tracking Clearwater Paper Corp, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Clearwater Paper Corp's financial health, operational results, and strategic positioning for the past fiscal year, which is crucial for investors and stakeholders to assess the company's performance and future outlook. The detailed financial statements and risk factors within the report offer insights into the company's revenue streams, profitability, debt levels, and potential challenges, enabling informed investment decisions.

Risk Assessment

Risk Level: medium — Clearwater Paper Corp shows moderate risk based on this filing. The company operates in the paperboard mills industry, which can be subject to market fluctuations, raw material price volatility, and environmental regulations, as indicated by its SIC code and the nature of its business.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand Clearwater Paper Corp's performance and potential challenges in the paperboard industry.

Key Numbers

• 2023-12-31 — Fiscal Year End (The report covers the fiscal year ending on this date.)
• 2024-02-20 — Filing Date (The date the 10-K was filed with the SEC.)
• 001-34146 — SEC File Number (The SEC file number assigned to Clearwater Paper Corp.)
• 0001441236 — Central Index Key (The SEC's unique identifier for Clearwater Paper Corp.)

Key Players & Entities

• Clearwater Paper Corp (company) — Filer name and subject of the report.
• Potlatch Forest Products Corp (company) — Former name of Clearwater Paper Corp.
• 2023-12-31 (date) — Fiscal year end date covered by the report.
• 2024-02-20 (date) — Filing date of the 10-K report.
• 2631 (industry_code) — Standard Industrial Classification code for PAPERBOARD MILLS.

FAQ

Industry Context

Clearwater Paper Corp operates within the paper and pulp manufacturing sector, specifically focusing on paperboard mills. This industry is characterized by its reliance on raw materials, energy costs, and demand from packaging and consumer goods sectors.

Regulatory Implications

The company is subject to various federal, state, and local environmental regulations governing emissions, waste disposal, and resource management, common for companies in the paper manufacturing industry.

What Investors Should Do

1. Analyze the financial statements within the 10-K for revenue trends, profitability, and cash flow.
2. Review the risk factors section to understand potential challenges and their impact on the company.
3. Compare key financial metrics with industry peers to assess competitive positioning.

Key Dates

• 2024-02-20: Filing of 10-K — Submission of the annual report for the fiscal year 2023.
• 2023-12-31: Fiscal Year End — End date of the reporting period for the 10-K.

Year-Over-Year Comparison

This filing is the 2023 annual report (10-K), providing updated financial and operational data compared to previous filings.

Key Financial Figures

• $0.0001 — ange on which registered Common Stock ($0.0001 par value per share) CLW New York Stock

Filing Documents

• clw-20231231.htm (10-K) — 1815KB
• a108i-formofperformancesha.htm (EX-10.8) — 45KB
• ex109iiirsuagreementforlti.htm (EX-10.9 1) — 48KB
• ex109ivnon-ltiprsuagreemen.htm (EX-10.9 2) — 47KB
• ex1011iiiannualincentivepl.htm (EX-10.11) — 67KB
• ex21q4-23.htm (EX-21) — 10KB
• ex23consentq4-23.htm (EX-23) — 2KB
• exhibit24-poaq4x23.htm (EX-24) — 29KB
• ex31q4-23.htm (EX-31) — 23KB
• ex32q4-23.htm (EX-32) — 10KB
• ex97incentivecompensationr.htm (EX-97) — 31KB
• clw-20231231_g1.jpg (GRAPHIC) — 10KB
• clw-20231231_g2.jpg (GRAPHIC) — 106KB
• 0001504337-24-000010.txt (&nbsp;) — 11390KB
• clw-20231231.xsd (EX-101.SCH) — 58KB
• clw-20231231_cal.xml (EX-101.CAL) — 79KB
• clw-20231231_def.xml (EX-101.DEF) — 524KB
• clw-20231231_lab.xml (EX-101.LAB) — 899KB
• clw-20231231_pre.xml (EX-101.PRE) — 717KB
• clw-20231231_htm.xml (XML) — 1679KB

Risk Factors 7

ITEM 1A. Risk Factors 7

Unresolved Staff Comments 19

ITEM 1B. Unresolved Staff Comments 19

Cybersecurity 19

ITEM 1C. Cybersecurity 19

Properties 20

ITEM 2. Properties 20

Legal Proceedings 21

ITEM 3. Legal Proceedings 21

Mine Safety Disclosures 21

ITEM 4. Mine Safety Disclosures 21 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22

[Reserved] 23

ITEM 6. [Reserved] 23

Management's Discussion and Analysis of Financial Condition and Results of

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk 32

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 32

Financial Statements and Supplementary Data 33

ITEM 8. Financial Statements and Supplementary Data 33

Changes in and Disagreements with Accountants on Accounting and Financial

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 66

Controls and Procedures 67

ITEM 9A. Controls and Procedures 67

Other Information 69

ITEM 9B. Other Information 69

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 69

ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 69 PART III

Directors, Executive Officers and Corporate Governance 70

ITEM 10. Directors, Executive Officers and Corporate Governance 70

Executive Compensation 71

ITEM 11. Executive Compensation 71

Security Ownership of Certain Beneficial Owners and Management and Related

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 71

Certain Relationships and Related Transactions, and Director Independence 71

ITEM 13. Certain Relationships and Related Transactions, and Director Independence 71

Principal Accounting Fees and Services 71

ITEM 14. Principal Accounting Fees and Services 71 PART IV

Exhibits, Financial Statement Schedules 72

ITEM 15. Exhibits, Financial Statement Schedules 72

Form 10-K Summary 77

ITEM 16. Form 10-K Summary 77 SIGNATURES 78 Part I CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION Our disclosure and analysis in this report contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding accounting standards; our strategy; raw materials and input usage and costs, including energy costs and usage; our operations and expectations; borrowing and credit facilities; cash flows; capital expenditures; disclosure controls; compliance with our loan and financing agreements; tax rates; debt repayments; operating costs; selling, general and administrative expenses; liquidity; benefit plan funding levels; tax benefits or liabilities related to worthless stock deductions; stockholder equity; capitalized interest; interest expenses; legal proceedings and t he proposed transaction between us and Graphic Packaging; the commitment letter to finance the proposed transaction; and the ability of the parties to complete the proposed transaction and financing considering the various closing conditions. Words such as "anticipate," "expect," "intend," "plan," "target," "project," "believe," "schedule," "estimate," "may," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based on management's current expectations, estimates, assumptions and projections that are subject to change. Our actual results of operations may differ materially from those expressed or implied by the forward-looking statements contained in this report. Important factors that could cause or contribute to such differences in operating results include those risks discussed in Item 1A of this report, as well as the following: the expansion of our business through the acquisition of a paperboard manufacturing facility and associated business may not be completed or proceed as anticipated; our

Business

ITEM 1. Business GENERAL We are a premier manufacturer and supplier of bleached paperboard and consumer and parent roll tissue. We supply bleached paperboard to quality-conscious printers and packaging converters, and offer services that include custom sheeting, slitting and cutting. We supply private branded tissue to major retailers, including grocery, club, mass merchants and discount stores. BUSINESS SEGMENTS We have two business segments: Pulp and Paperboard and Consumer Products. Sales for these segments for the last three years are included in the table below: Year Ended December 31, Increase (decrease) (In millions) 2023 2022 2021 2023-2022 2022-2021 Pulp and Paperboard $ 1,063.7 $ 1,136.3 $ 946.0 (6.4) % 20.1 % Consumer Products 1,023.4 950.2 835.0 7.7 % 13.8 % Eliminations (4.3) (6.4) (8.4) (32.8) % (22.8) % $ 2,082.8 $ 2,080.1 $ 1,772.6 0.1 % 17.3 % Pulp and Paperboard Segment Our Pulp and Paperboard segment markets and manufactures bleached paperboard for the high-end segment of the packaging industry and is a leading producer of Solid Bleached Sulfate (SBS) paperboard. This segment produces hardwood and softwood pulp, which is primarily used as the basis for our paperboard products or transferred to our Consumer Products segment. Minor amounts of pulp are sold to outside customers. We believe we are one of the five largest producers of bleached paperboard in North America with approximately 16% of the available U.S. production capacity in 2023. We also provide custom sheeting, slitting and cutting of paperboard products. SBS paperboard is a premium paperboard grade that is most frequently used to produce folding cartons, liquid packaging, cups and plates, blister and carded packaging, top sheet and commercial printing items. SBS paperboard is used for such products because it is manufactured using virgin fiber combined with the kraft bleaching process, which results in superior cleanliness, brightness and consistency. SBS paperboard is o

Risk Factors

ITEM 1A. Risk Factors Our business, financial condition, results of operations and liquidity are subject to various risks and uncertainties, including those described below, and as a result, the trading price of our common stock could decline. TRANSACTION RISK FACTORS The expansion of our business through the acquisition of a paperboard manufacturing facility and associated business may not be completed or proceed as anticipated. Our long-term growth strategy involves strengthening our position as a premier, independent supplier of paperboard products to North American converters. On February 19, 2024, we announced our entry into an agreement to purchase the consumer packaging business operating out of the paperboard mills and associated facilities in Augusta, Georgia (the "Mill Facility") owned by Graphic Packaging International, LLC. The completion of the acquisition entails many risks, including that one or more closing conditions to the transaction, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise; the proposed transaction may not be completed in the time frame expected by us, or at all; unexpected costs, charges or expenses resulting from the proposed transaction; and stockholder litigation in connection with the proposed transaction or other settlements or investigations may affect the timing or occurrence of the proposed transaction or result in significant costs of defense, indemnification and liability. We may not realize the expected benefits of the acquisition of the Mill Facility because of integration difficulties or other challenges. We may not be able to maintain the levels of revenue, earnings or operating efficiency that we estimate for the Mill Facility. In addition, the success of the acquisition will depend, in part, on our ability to realize the anticipated benefits from the acquisition, including anticipated revenue, customer growth and cost structure and production scale benefits. Th

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