Clearwater Paper reports $52M loss
Aug. 5—Unspecified Clearwater Paper tissue factories took downtime to reduce inventory levels in recent months as the country's recovery from the COVID-19 pandemic created challenges for the company.
The downtime happened during Clearwater Paper's second quarter of this year that ended with a net loss of $52 million, compared with earnings of $22.8 million for the same time last year, according to a Clearwater Paper news release issued Wednesday.
"Tissue demand bottomed out in April as consumers de-stocked pantries and retailers adjusted inventories," Clearwater Paper President and CEO Arsen Kitch said in the news release.
"Our tissue orders have started to build back to more normal levels since then."
It's not clear how much the temporary reduction in staffing affected the company's Lewiston site, where about 1,300 employees work making tissue, paperboard and pulp.
Clearwater Paper officials declined to release details Wednesday about the downtime, including which facilities were involved and how many employees experienced reductions in hours.
The setbacks were related to the changing behaviors of people emerging from the pandemic, Kitch said in a conference call for stock market analysts Wednesday after the release of the financial results.
As COVID-19 vaccinations became available and restrictions eased, people returned to more normal lifestyles.
That reduced purchases of Clearwater Paper's private label tissue products while consumers used up supplies they had in their pantries, Kitch said.
Net sales in the consumer products segment — which makes toilet paper, paper towels, paper napkins and facial tissue — were $181 million for the second quarter, which ended June 30, versus $271 million for the same time last year, according to the news release.
The difficulties in tissue are anticipated to be short-term for a number of reasons, Kitch said.
Tissue is a needs-based product that historically has not been negatively affected by economic uncertainty, and there's potential for private label tissue to command a higher percentage of the U.S. market in the future, Kitch said.
"After we get beyond the (COVID-19) related distortions in the market, we're optimistic that this business will generate meaningful cash flows over the long run," he said.
Conditions were different on the pulp and paperboard segment, which manufactures paperboard that's used for packaging and paper dishes.
Net sales in that segment were $227 million in the second quarter of 2021, compared with $216 million for the same time last year, according to the news release.
"We continued to experience strong demand from our folding carton customers and a recovery in food service segments," Kitch said. "Demand for food packaging products and retail paper plates has remained healthy throughout the pandemic."
Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.
