CLEARWATER PAPER CP (NYSE:CLW) filed Quarterly Report for the period ended 2010-06-30.
Clearwater Paper Cp has a market cap of $739.3 million; its shares were traded at around $64.4 with a P/E ratio of 12.8 and P/S ratio of 0.6. CLW is in the portfolios of John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates.
Highlight of Business Operations:On June 10, 2010, we announced our decision to build a new tissue manufacturing facility in Shelby, North Carolina as part of our plans to expand our Consumer Products segment in the Southeastern United States. This site will include a Through-Air-Dried, or TAD, paper machine and seven converting lines capable of producing ultra grades of private label tissue products. We have estimated the project will cost approximately $260 million to $280 million with approximately $11 million of the project costs to be incurred in 2010 and substantially all of the remainder in 2011 and 2012.
Major equipment maintenance and repair in our Pulp and Paperboard segment also requires maintenance shutdowns generally lasting up to one week per year at our Idaho facility and up to one week approximately every 18 months at our Arkansas facility, which increases costs and may reduce net sales in the quarters in which the major maintenance shutdowns occur. In March 2010 we had machine downtime of eight days at our Idaho pulp and paperboard mill due to scheduled major maintenance costing $16.9 million. We expect to spend an additional $5 million to $6 million on major maintenance in the last half of 2010. Major maintenance and repair costs for 2010 are expected to be approximately $20-25 million.
In addition to ongoing maintenance and repair costs, we make capital expenditures to increase our operating capacity and efficiency, improve our safety and to comply with environmental laws. During the three and six months ended June 30, 2010, we spent $10.2 million and $15.5 million, respectively, on capital expenditures compared to $6.1 million and $9.7 million, respectively, in the same periods in 2009. Our capital expenditures for 2010 are expected to be between $40 million and $45 million, including an estimated $11 million associated with our North Carolina TAD paper machine and tissue converting lines.
In the six months ended June 30, 2010, we did not record any income in connection with alternative fuel mixture tax credits related to black liquor due to the termination of the tax credit for such use at the end of 2009. During the six months ended June 30, 2010, we received $99.5 million from the Federal Government, of which $83.2 million related to the alternative fuel mixture tax credits earned in 2009.
Debt retirement costsWe recorded $6.3 million of expenses in the first half of 2009 associated with the retirement of our $100 million note payable obligation to Potlatch. The $100 million note payable represented the principal amount of credit sensitive debentures originally issued by an affiliate of Potlatch. Prior to our spin-off, we agreed to retain the obligation to pay all amounts due to the holders of the debentures. The $6.3 million represented the interest payment, estimated as of June 2009, that would be required on the December 1, 2009 maturity date of the credit sensitive debentures.
Excluding the alternative fuel mixture tax credit of $76.4 million recorded in the second quarter of 2009, operating income increased $20.6 million in the second quarter of 2010 compared to the same period in 2009. The increase in operating income was largely attributable to higher net sales and was partially offset by higher wood fiber, chemical and transportation costs.
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