CLW earnings analysis
What we found in CLW's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Clearwater Paper reported Q2 revenue of $374.8 million, down 4% year over year, and a GAAP diluted loss per share of $1.33 versus diluted EPS of $0.17 a year earlier. Gross margin fell from 11.0% to negative 2.8% and operating margin declined from 2.5% to negative 6.4%, as lower selling prices and the Lewiston maintenance outage outweighed higher paperboard volumes and lower SG&A. Liquidity and six-month cash generation improved materially, but that improvement was substantially supported by $32.5 million of insurance proceeds and $30.0 million of tax refunds rather than operating performance.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Higher paperboard volume could not offset pricing
- Q2 net sales were $374.8 million, down 4% from $391.8 million a year earlier. Paperboard shipments increased 8% to 328,722 short tons, but paperboard price per ton fell 9% to $1,077.
- Cost-reduction actions lowered SG&A
- SG&A declined 19% to $21.1 million from $26.1 million, which management attributed to planned cost-reduction efforts.
- Cash flow improved on recoveries and tax refunds
- Six-month operating cash flow was $69.5 million, compared with cash used of $26.7 million in the prior-year period. The improvement included $32.5 million of insurance recoveries, $30.0 million of income-tax refunds, and inventory reductions; less $18.7 million of capex, implied six-month free cash flow was $50.8 million.
- ABL liquidity remained available
- Liquidity under the ABL was supported by $197.7 million of eligible receivables and inventory at June 30, 2026; $82.8 million was utilized, including $79.0 million of borrowings and $3.8 million of letters of credit.
- Insurance recovery provided a meaningful benefit
- The company received $32.5 million of Augusta representation-and-warranty insurance proceeds during the first six months, including $9.2 million recorded in cost of sales and $23.3 million in other operating charges. A further $25.0 million remains under the policy limit, though recovery is not assured.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Pricing and outage costs drove gross loss
- Margins deteriorated sharply: Q2 cost of sales rose 10% to $385.2 million while sales fell 4% to $374.8 million, producing an approximately $10.4 million gross loss (negative 2.8% margin), versus an approximately $43.0 million gross profit (11.0% margin) a year ago.
- Pulp decline compounded paperboard pricing pressure
- Pulp volumes and pricing were both weak: shipments declined 25% to 29,313 short tons and price declined 22% to $557 per short ton. Management cited the Lewiston maintenance outage as limiting pulp production capability.
- Profitability remains pressured by outages
- Adjusted EBITDA from continuing operations fell to negative $8.2 million from positive $39.9 million, while the net loss was $21.5 million compared with net income of $2.7 million in Q2 2025. Q4 2026 will also include a planned Cypress Bend outage and a reduced-scope Augusta outage.
- Leverage and covenant headroom require monitoring
- The company had $79.0 million outstanding under its ABL at June 30, 2026 and disclosed that covenant compliance could be jeopardized if financial performance or market conditions deteriorate. The ABL fixed-charge coverage covenant is 1.10x to 1.00x when triggered.
- No material risk-factor updates disclosed
- Item 1A states there were no material changes to risk factors from the Form 10-K for the year ended December 31, 2025; therefore, the filing did not identify a newly added or materially revised risk factor.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-1.33
- Gross margin
- -2.8%
- Operating margin
- -6.4%
What they said about what is next.
The 10-Q provided no quantitative revenue or EPS guidance. For Q3 2026, management expects lower operating costs without a planned major maintenance outage, partly offset by higher petroleum-based chemical and transportation costs. Cash capital expenditures are expected to be approximately $65 million to $75 million during 2026.
The filing reads worse than the one before it.
What came before.
- 10-Q · April 28, 2026
- Clearwater Paper reported Q1 2026 net sales of $360.3M, down 5% vs Q1 2025 ($378.2M), with paperboard shipments rising 4.6% but realized prices falling 7.3% per ton. Profitability compressed sharply — Adjusted EBITDA…
- 10-K · February 18, 2026
- Clearwater Paper (CLW) has repositioned itself as a pure-play SBS paperboard producer after the 2024 acquisition of an Augusta, GA mill for approximately $710.6 million and the October 2024 divestiture of its tissue…
- 10-Q · October 28, 2025
- Clearwater Paper reported Q3 net sales of $399.0M (up from $393.3M YoY) but swung to a large GAAP loss: net loss $(53.3)M (EPS $(3.30)) driven by a $48.0M non‑cash goodwill impairment and elevated operating costs.…
- 10-Q · April 29, 2025
- Clearwater Paper reported Q1 2025 revenue of $378.2M (up 46% vs Q1 2024 $258.8M) and Adjusted EBITDA rose to $29.8M from $14.2M a year ago, but the company posted a net loss of $6.3M (EPS -$0.38) and generated only…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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