Clearwater Paper Corp

Previous wording

The following table provides our Adjusted EBITDA from continuing operations for the periods presented and a reconciliation to net income (loss).

Current wording

The following table reconciles our Net loss to Adjusted EBITDA from continuing operations for the periods presented.

Previous 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.

Current wording

Net sales decreased 5% for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025 with increased sales volume to existing customers more than 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 nine months ended September 30, 2025 and 2024.

Current wording

Costs included in our cost of sales include input costs (principally raw materials and energy), labor and overhead and supply chain costs (principally freight and outside warehousing). The table below provides the details of our cost of sales for the quarters ended March 31, 2026 and 2025.

Previous 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.

Current wording

Selling, general and administrative expenses decreased 29% for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025 primarily as a result of our planned cost reduction efforts.

Previous wording

Operating income from continuing operations and Adjusted EBITDA from continuing operations decreased for the quarter ended September 30, 2025 as compared to the quarter ended September 30, 2024 due to timing of our major maintenance outage and lower sales prices, offset by higher sales volumes, lower input costs and our planned cost reduction activities. Additionally, impacting operating income from continuing operations was the goodwill and other impairment charges..

Current wording

Operating income from continuing operations decreased for the quarter ended March 31, 2026 as compared to the quarter ended March 31, 2025 due to the weather event and lower sales prices, offset by higher sales volumes and insurance recovery. For the quarter ended March 31, 2026, Adjusted EBITDA from continuing operations decreased as compared to the quarter ended March 31, 2025 due to the weather event and lower sales prices, offset by higher sales volumes.

Previous wording

One of our union agreements associated with our Lewiston, Idaho facility expired in the third quarter of 2025. Our relationship with this union remains good and we are negotiating a new agreement. When a new agreement is ratified, we expect to incur retroactive payments on wage increases back to the expiration date which cannot be recorded in our financial statements until the ratification process is complete.

Current wording

One of our union agreements associated with our Lewiston, Idaho facility expired in the third quarter of 2025. Early in the second quarter of 2026, we ratified the agreement and expect to incur retroactive payments on wage increases back to the expiration date of $2.0 million to $2.5 million.

Previous wording

GPK made customary representations and warranties in the Purchase Agreement for a transaction of this nature relating to periods prior to, and as of, the closing of the acquisition. We obtained representation and warranty insurance, subject to exclusions, a policy limit of $105 million, and certain other terms and conditions, to cover losses resulting from a breach of these representations and warranties. We have notified the insurance carriers of alleged breaches of certain representations and warranties contained in the Purchase Agreement. In July 2025, we submitted our claims to the insurance carriers for losses arising of the alleged breaches. Although we believe that our claims are meritorious, no assurance can be given as to whether we will recover all, or any part, of the losses for which we have made such claims. No gains or receivables have been recognized related to this claim as of September 30, 2025.

Current wording

In connection with our acquisition of our Augusta, Georgia mill from Graphic Packaging International, LLC, a wholly owned subsidiary of Graphic Packaging Holding Company, we obtained representation and warranty insurance, subject to exclusions, a policy limit of $105 million, and certain other terms and conditions, to cover losses resulting from a breach of these representations and warranties. During 2025, we notified the insurance carriers of alleged breaches of certain representations and warranties contained in the Purchase Agreement. During the quarter ended March 31, 2026, we received a partial settlement of $17.5 million related to these claims, of which $5.6 million was related to reimbursable costs and recorded within "Cost of sales" and $11.9 million related to other breaches and reported within "Other operating charges, net" in our Consolidated Statements of Operations. As of March 31, 2026, we have $50 million remaining under our policy limit. Although we believe that our claims are meritorious, no assurance can be given as to whether we will recover additional proceeds related to these claims.

Previous 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.

Current wording

Net cash flows provided by operating activities for the quarter ended March 31, 2026 were $0.5 million compared to $1.5 million for the quarter ended March 31, 2025. This decrease was driven by lower operating performance offset by insurance recoveries of $17.5 million and income tax refunds of $4 million. Accounts receivable and accounts payable agings as of March 31, 2026 have remained relatively consistent with balances as of December 31, 2025.

Previous 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.

Current wording

Net cash flows used in investing activities for the quarter ended March 31, 2026 were $9.1 million compared to $32.7 million in the same period of the prior year related to capital expenditures. Included in "Accounts payable and accrued liabilities" on our Consolidated Balance Sheets were $6.9 million and $16.6 million related to unpaid capital expenditures at March 31, 2026 and 2025.

Previous wording

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

Current wording

During 2026, we expect cash paid for capital expenditures to be approximately $65 million to $75 million.

Previous 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.

Current wording

During the quarter ended March 31, 2026, net cash provided by financing activities was $14.3 million. We borrowed $15.0 million under our credit agreements. We used $0.5 million in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

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 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).

Current wording

We are party to a Credit Agreement, dated July 26, 2019, with JPMorgan Chase Bank, N.A., as administrative agent and several lenders (which may be amended from time to time, the “ABL Credit Agreement”) consists of a $375 million revolving loan commitment, subject to borrowing base limitations. The ABL Credit Agreement matures on November 7, 2027. As of March 31, 2026, our eligible receivables and inventory supported up to $213.3 million availability under the ABL of which we utilized $82.5 million, consisting of $79.0 million borrowings outstanding and $3.5 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).

Previous wording

Under the ABL Credit Agreement, loans may bear interest based on SOFR or Alternative Base Rate, as applicable, plus, in each case, an applicable margin that is based on availability, as calculated under the ABL Credit Agreement that may vary from 1.25% per annum to 1.75% per annum in the case of SOFR loans and 0.25% per annum to 0.75% per annum in the case of annual base rate loans. In addition, a commitment fee based on unused availability is also payable which may vary from 0.25% per annum to 0.375% per annum.

Current wording

Under the ABL Credit Agreement, loans may bear interest based on SOFR (secured overnight financing rate) or annual base rate, as applicable, plus, in each case, an applicable margin that is based on availability, as calculated under the ABL Credit Agreement that may vary from 1.25% per annum to 1.75% per annum in the case of SOFR loans and 0.25% per annum to 0.75% per annum in the case of annual base rate loans. In addition, a commitment fee based on unused availability is also payable which may vary from 0.25% per annum to 0.375% per annum.

Previous wording

The ABL Credit Agreement also contains a financial covenant, which requires us to maintain a consolidated fixed charge coverage ratio of not less than 1.10x to 1.00x, provided that the financial covenant under the ABL Credit Agreement is only applicable during an event of default or if availability, as calculated under the ABL Credit Agreement, is at any time less than or equal to the greater of (i) 10.0% of the lesser of the borrowing base and the maximum $375 million of current revolving loan commitments and (ii) $25 million.

Current wording

The ABL Credit Agreement also contains a financial covenant, which requires us to maintain a consolidated fixed charge coverage ratio of not less than 1.10x to 1.00x, provided that the financial covenant under the ABL Credit Agreement is only applicable during an event of default or if availability, as calculated under the ABL Credit

Previous wording

At September 30, 2025, we were in compliance with the covenants associated with our ABL Credit Agreement, and based on our current financial projections, we expect to remain in compliance. However, if our financial position, results of operations or market conditions deteriorate, we may not be able to remain in compliance. There can be no assurance that we will be able to remain in compliance with our ABL Credit Agreement or other credit agreements.

Current wording

At March 31, 2026, we were in compliance with the covenants associated with our ABL Credit Agreement and PCA Credit Agreement, and based on our current financial projections, we expect to remain in compliance. However, if our financial position, results of operations or market conditions deteriorate, we may not be able to remain in compliance. There can be no assurance that we will be able to remain in compliance with our credit agreements.