Profits robust for Clearwater Paper
Feb. 26—Buoyed by elevated sales of tissue during the coronavirus pandemic, Clearwater Paper made a $77.1 million profit in 2020.
The net income followed a loss of $5.6 million in 2019 and $143.8 million in 2018, according to previous financial reports issued by the company.
The latter part of the year played a significant role in the earnings, with Clearwater Paper making $22.6 million in October, November and December, according to results released Thursday.
"Our tissue business drove results with both higher sales and production volumes year over year to meet volatile demand, which exceeded our expectations," said Clearwater Paper President and CEO Arsen Kitch in a conference call for stock market analysts.
"Our paperboard business delivered strong performance as well," he said. "Our backlogs are robust."
A portion of the earnings were shared with 2,800 employees, including 1,000 who work at Clearwater Paper's Lewiston manufacturing complex, one of the community's largest employers. Those employees received a $1,000 bonus in November.
The company's risk-mitigation strategies are helping to reduce the risk of COVID-19 at its sites, he said.
"Our human resources and manufacturing leadership teams are doing an exceptional job of proactively monitoring the health of our workforce and ensuring that we have the proper staffing levels in place," Kitch said. "Our people's diligence to date has been key to our success and will continue to be so."
In addition to the $1,000 bonuses, employees will be eligible for $200 if they are inoculated against the coronavirus, he said.
The pandemic isn't the only challenge Clearwater Paper has faced. Earlier this month, the company had to temporarily suspend production at its Cypress Bend paperboard plant in Arkansas.
Lost production, repairs and spikes in natural gas prices could reduce pre-tax income by $6 million to $8 million, Kitch said.
"Natural gas deliveries were curtailed to the point where we could no longer operate," he said.
"We are now back up and running thanks to the tremendous effort by our team to protect our assets from significant damage due to the cold weather."
Despite that setback, Kitch said, he's seeing continuing strength in tissue and paperboard.
During the middle of November, "the pandemic caused significant spikes" in demand that lasted for about one month, with demand for paper towels running higher than other types of tissue products, Kitch said.
"We are encouraged by our pipeline of (tissue) sales for the remainder of 2021," he said.
A similar trend is happening in paperboard.
"Demand remains robust and our backlogs have grown since the beginning of the year," Kitch said. "... We believe we are well positioned heading into 2021 to continue driving improvement in our business."
Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.
