CLW · Clearwater Paper Corporation

Clearwater Paper’s Q1 2026 results reflect acute industry headwinds: net sales declined 4.8% year-over-year to $360.3 million, driven entirely by a 7% reduction in average net selling price ($1,101/ton vs. $1,188/ton), which more than offset a 5% increase in sales volumes (302,918 tons). The company reported a net loss of $12.8 million ($0.80 per diluted share), widening from a $6.3 million loss in Q1 2025, with management attributing the deterioration primarily to lower market pricing and a severe weather event in the Southeast that disrupted operations and incurred an estimated $15 million impact. Adjusted EBITDA collapsed to $1.9 million (0.5% margin) from $29.8 million (7.9% margin) in Q1 2025 — a $27.9 million decline — with pricing/mix contributing -$7.2 million and weather-related costs adding further pressure, partially offset by $8.3 million in cost improvements and $1.8 million from higher volumes. Notably, the company received $17 million in representation and warranty insurance proceeds (tax-adjusted), which contributed to the $13 million net loss figure cited in the press release headline but is excluded from core operating metrics. Management highlighted solid operational execution amid adversity and launched Velora™, a new lightweight folding carton paperboard, while announcing the Cypress Bend restructuring — expected to yield $8–$12 million in annual savings, with $6 million anticipated in FY2026. Forward guidance for Q2 2026 projects Adjusted EBITDA between $0 and -$10 million, reflecting planned major maintenance outages ($22–$24M at Lewiston), $5–$7M higher input costs (including Iran war-related impacts), and continued pricing pressure. The company maintains a strong balance sheet (net leverage of 2.9x, $407 million liquidity) and remains focused on fixed-cost reduction, working capital improvement ($20M target), and strategic positioning for cyclical recovery — citing RISI’s forecast of improved industry operating rates (to 90% in 2026) and reduced imports.