Clearwater Paper Corp

Previous wording

Net sales increased 14% and 28% for the quarter and six months ended June 30, 2025 compared to quarter and six months ended June 30, 2024. These increases were driven by higher sales volume due to the addition of the Augusta operations offset by market driven price decreases and changes in our product mix.

Current wording

Net sales increased 1% for the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024 due to increased sales volume to existing customers offset by market driven price decreases and changes in our product mix. Net sales increased 17% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 driven by higher sales volume due to the addition of the Augusta operations offset by market driven price decreases and changes in our product mix.

Previous wording

Costs included in our cost of sales include input costs (principally raw materials and energy), labor and overhead, supply chain costs (principally freight and outside warehousing). The table below provides the details of our cost of sales for the quarters and six months ended June 30, 2025 and 2024.

Current wording

Costs included in our cost of sales include input costs (principally raw materials and energy), labor and overhead, supply chain costs (principally freight and outside warehousing). The table below provides the details of our cost of sales for the quarters and nine months ended September 30, 2025 and 2024.

Previous wording

In 2024, planned major maintenance outages occurred at our Lewiston, Idaho facility and Cypress Bend, Arkansas facility in the second quarter and Augusta, Georgia facility in the fourth quarter. For the first half of 2025, we completed the planned major maintenance outages at our Cypress Bend, Arkansas facility in the second quarter of 2025. We expect to complete planned major maintenance outages at our Lewiston, Idaho facility in the third quarter of 2025 and at our Augusta, Georgia facility in the fourth quarter of 2025.

Current wording

In 2024, planned major maintenance outages occurred at our Lewiston, Idaho facility and Cypress Bend, Arkansas facility in the second quarter, and at our Augusta, Georgia facility in the fourth quarter. For the nine period ended September 30, 2025, we completed the planned major maintenance outages at our Cypress Bend, Arkansas facility in the second quarter, and at our Lewiston, Idaho facility in the third quarter. We plan to complete our planned major maintenance outage at our Augusta, Georgia facility in the fourth quarter of 2025.

Previous wording

Cost of sales increased 1% for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024 and due to the inclusion of the Augusta operations and timing of our planned major maintenance offset by higher inventory build. Input costs increased due to higher sales volume with higher costs on a per ton basis across energy and chemicals partially offset by lower fiber costs. Our labor and overhead decreased due to timing of our planned major maintenance outage and implementation of our cost reduction plan, offset by the absence of insurance proceeds received in the second quarter of 2024 related to the weather event that occurred in the first quarter of 2024. Depreciation increased due to inclusion of the Augusta operations. Supply chain costs increased due to higher volumes offset by lower freight costs per ton due to improved freight optimization related to our revised facility footprint.

Current wording

Cost of sales increased 5% for the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024 due to the timing of our planned major maintenance outage offset by cost reduction activities. Input costs decreased due to lower fiber costs offset by higher costs of energy and chemicals. Our labor and overhead increased due to timing of our planned major maintenance outage offset by the implementation of our cost reduction plan. Supply chain costs increased due to higher volumes offset by lower freight costs per ton due to improved freight optimization. Other cost increased due to inventory reductions in the third quarter of 2025 due to the planned major maintenance outage at our Lewiston, Idaho facility as compared to the third quarter of 2024 where inventory increased due to the anticipated planned major maintenance outage at our Augusta, Georgia facility.

Previous wording

Cost of sales increased 21% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 due primarily to the inclusion of the Augusta operations partially offset by the timing of our planned major maintenance outage. Input costs increased due to higher sales volume with reductions on a per ton basis across fiber, energy and chemicals. Our labor and overhead increased due to the inclusion of the Augusta operations offset by timing of our major maintenance outage and implementation of our cost reduction plan. Depreciation increased due to inclusion of Augusta operations. Supply chain costs increased due to higher volumes offset by lower freight costs per ton due to improved freight optimization related to our revised facility footprint.

Current wording

Cost of sales increased 14% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due primarily to the inclusion of the Augusta operations offset by cost reduction activities. Input costs increased due to higher production volume with increases on a per ton basis across energy and chemicals offset by reductions on a per ton basis in fiber. Our labor and overhead increased due to the inclusion of the Augusta operations offset by implementation of our cost reduction plan. Depreciation increased due to inclusion of Augusta operations. Supply chain costs increased due to higher volumes offset by lower freight costs per ton due to improved freight optimization related to our revised facility footprint. Other costs decreased due to inventory increases in the first nine months of 2025 as compared to the first nine months of 2024.

Previous wording

Gross profit increased for thequarter and six months ended June 30, 2025 compared to the same periods in 2024 due to improved operating performance, reduced costs due to timing on our major maintenance outages and planned cost reduction activities, offset by lower sales prices.

Current wording

Gross profit increased for the nine months ended September 30, 2025 compared to the same period in 2024 due to improved operating performance, higher sales volume and our planned cost reduction activities, offset by lower sales prices.

Previous wording

Selling, general and administrative expenses decreased 14% for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024 primarily as a result of our planned cost reduction efforts.

Current wording

Selling, general and administrative expenses decreased 22% for the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024 primarily as a result of our planned cost reduction efforts.

Previous wording

Selling, general and administrative expenses decreased 6% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily as a result of our planned cost reductions offset by additional sales costs associated with the Augusta acquisition.

Current wording

Selling, general and administrative expenses decreased 11% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 primarily as a result of our planned cost reductions offset by additional sales costs associated with the Augusta acquisition.

Previous wording

Operating income from continuing operations and Adjusted EBITDA from continuing operations increased for the quarter ended June 30, 2025 as compared to the quarter ended June 30, 2024 and the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 due to timing of our major maintenance outage, lower input costs and our planned cost reduction activities, offset by lower sales pricing. Additionally, impacting operating income from continuing operations were the integration cost associated with the acquisition of the Augusta facility and severance and other costs associated with our planned cost reduction activities.

Current wording

Operating income from continuing operations decreased for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 due to lower input costs and our planned cost reduction activities, offset by lower sales pricing. Additionally, impacting operating income from continuing operations were goodwill and other impairment charges, the integration cost associated with the acquisition of the Augusta facility and severance and other costs associated with our planned cost reduction activities.

Previous wording

Looking forward to the third quarter of fiscal 2025, we expect sales volumes to be flat from the second quarter. We expect energy costs to decrease in the third quarter due to seasonal trends and expect additional benefits from our fixed cost reduction efforts. In addition, we expect an increase in planned major maintenance expense due to our annual outage at our Lewiston, Idaho mill.

Current wording

Looking forward to the fourth quarter of fiscal 2025, we expect sales volumes to be down from the third quarter due to seasonality. While we anticipate continued benefits from our fixed costs reduction efforts, we expect energy costs to increase in the fourth quarter due to seasonal trends. In addition, we expect our planned major maintenance outage expense to decrease during the quarter at our Augusta, Georgia facility as compared to Lewiston, Idaho facility that occurred in the third quarter.

Previous wording

On April 2, 2025, the U.S. announced a new universal baseline tariff of 10% on imports from nearly all trading partners, excluding Canada and Mexico, plus an additional country-specific tariff for select trading partners, which were suspended until August 1, 2025. The U.S. has also imposed tariffs of 25% on certain imports from Canada and Mexico, subject to exemptions for goods that comply with the rules of origin of the United States-Mexico-Canada trading agreement (USMCA). These exemptions apply to certain of our raw materials (a portion of our chemicals, pulp and energy) imported from Canada. In July 2025, it was announced an intention to increase tariffs on Canada and Mexico to 35% and 30%, respectively, to be effective August 1. We are evaluating our other expenditures to assess the impact of the recent tariff announcements, but do not currently expect them to have a significant impact on our fiscal 2025 financial results. Given the timing and uncertainty of tariffs and other trade restrictions, including potential retaliatory tariffs, we have not included any material impact from potential tariffs in our outlook above.

Current wording

During 2025, the U.S. announced a new universal baseline tariff of 10% on imports from nearly all trading partners, excluding Canada and Mexico, plus an additional country-specific tariff for select trading partners. The U.S. has also imposed tariffs of 25% on certain imports from Canada and Mexico, subject to exemptions for goods that comply with the rules of origin of the United States-Mexico-Canada trading agreement (USMCA). These exemptions apply to certain of our raw materials (a portion of our chemicals, pulp and energy) imported from Canada. We are evaluating our other expenditures to assess the impact of the recent tariff announcements, but do not currently expect them to have a significant impact on our fiscal 2025 financial results. Given the timing and uncertainty of tariffs and other trade restrictions, including potential retaliatory tariffs, we have not included any material impact from potential tariffs in our outlook above.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We are currently evaluating OBBBA; however, it is not expected to have a material impact on the Company’s consolidated financial statements.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. This did not have a material impact on the Company’s consolidated financial statements for the third quarter of 2025.

Previous wording

Net cash flow used in operating activities for the six months ended June 30, 2025 were $26.7 million compared to net cash flows provided by operating activities of $80.3 million for the six months ended June 30, 2024. This decrease was driven by lower operating performance due to the divestiture of our tissue operations which are included in discontinued operations in the first six months of 2024 and reduced cash flows from remaining operations due to market weakness and lower pricing environment. Additionally, during the second quarter of 2025, we paid $57.2 million related to our 2024 income tax liability primarily related to the sale of our Tissue operations in 2024. Accounts receivable and accounts payable agings as of June 30, 2025 have remained relatively consistent with balances as of December 31, 2024.

Current wording

Net cash flow used in operating activities for the nine months ended September 30, 2025 were $7.3 million compared to net cash flows provided by operating activities of $96.5 million for the nine months ended September 30, 2024. This decrease was driven by lower operating performance due to the divestiture of our tissue operations which are included in discontinued operations in the first nine months of 2024. Additionally, during the first nine months of 2025, we paid $57 million related to our 2024 income tax liability primarily related to the divestiture of our tissue operations in 2024. Accounts receivable and accounts payable agings as of September 30, 2025 have remained relatively consistent with balances as of December 31, 2024.

Previous wording

Net cash flows used in investing activities for six months ended June 30, 2025 were $55.6 million compared to $744.8 million in the same period of the prior year related to capital expenditures and the acquisition of our Augusta, Georgia facility. Included in "Accounts payable and accrued liabilities" on our Consolidated Balance Sheets was $15.5 million and $35.1 million related to unpaid capital expenditures at June 30, 2025 and 2024.

Current wording

Net cash flows provided by investing activities for nine months ended September 30, 2025 were $86.0 million compared to $791.8 million in the same period of the prior year. During the nine months ended September 30, 2025, we paid $74 million related to capital expenditures and paid $12.1 million associated with the working capital adjustment related to our business divestiture that occurred during the fourth quarter of 2024. During the nine months ended September 30, 2024, we paid $83.6 million related to capital expenditures and $708.2 million related to the acquisition of our Augusta, Georgia facility. Included in "Accounts payable and accrued liabilities" on our Consolidated Balance Sheets were $11.8 million and $25.5 million related to unpaid capital expenditures at September 30, 2025 and 2024.

Previous wording

During 2025, we expect cash paid for capital expenditures to be approximately $80 million to $90 million.

Current wording

During 2025, we expect cash paid for capital expenditures to be approximately $85 million to $90 million.

Previous wording

During thesix months ended June 30, 2025, net cash provided by financing activities was$49.3 million. We borrowed$65.0 million and repaid$18.3 million on our ABL. We used $15.1 million to repurchase stock and $2.3 million in connection with income tax withholding requirements associated with our employee stock-based compensation plans. Additionally, as of June 30, 2025, we had collected $20.1 million in cash related to the transition services agreement which will be remitted during the third quarter of 2025.

Current wording

During the nine months ended September 30, 2025, net cash provided by financing activities was $33.5 million. We borrowed $72.0 million and repaid $18.0 million on our ABL.We used $17.2 million to repurchase stock and $2.3 million in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

Previous wording

During thesix months ended June 30, 2024, net cash provided by financing activities was$662.1 million. We received net proceeds of $723.5 million from the issuance of long-term debt related to the business acquisition. We used $4.5 million for debt issuance costs, $3.5 million to repurchase stock, and repaid debt of $50.5 million.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities was $688.9 million. We received net proceeds of $753.5 million from the issuance of long-term debt related to the business acquisition and to cover short term cash requirements. We used $4.9 million for debt issuance costs, $6.0 million to repurchase stock, and repaid debt of $50.9 million.

Previous wording

The Company is also party to a Credit Agreement, dated July 26, 2019, with JPMorgan Chase Bank, N.A., as administrative agent and several lenders, as amended on May 1, 2024 (as so amended, the “ABL Credit Agreement”) that includes a $375 million revolving loan commitment, subject to borrowing base limitations. The ABL Credit Agreement matures, on November 7, 2027. As of June 30, 2025, our borrowing base supported up to $245.1 million availability under the ABL of which we utilized $50.7 million, consisting of $47.0 million borrowings outstanding and $3.7 million under letters of credit. Borrowings under the ABL Credit Agreement are subject to mandatory prepayment in certain circumstances. We may also increase commitments under the ABL Credit Agreement in an aggregate principal amount of up to $100 million, subject to obtaining commitments from any participating lenders and certain other conditions. We may, at our option, prepay and reborrow any borrowings under the ABL Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty (except in certain circumstances).

Current wording

The Company is also party to a Credit Agreement, dated July 26, 2019, with JPMorgan Chase Bank, N.A., as administrative agent and several lenders, as amended on May 1, 2024 (as so amended, the “ABL Credit Agreement”) that includes a $375 million revolving loan commitment, subject to borrowing base limitations. The ABL Credit Agreement matures, on November 7, 2027. As of September 30, 2025, our borrowing base supported up to $213.9 million availability under the ABL of which we utilized $57.7 million, consisting of $54.0 million borrowings outstanding and $3.7 million under letters of credit. Borrowings under the ABL Credit Agreement are subject to mandatory prepayment in certain circumstances. We may also increase commitments under the ABL Credit Agreement in an aggregate principal amount of up to $100 million, subject to obtaining commitments from any participating lenders and certain other conditions. We may, at our option, prepay and reborrow any borrowings under the ABL Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty (except in certain circumstances).