Clearwater Adjusted EBITDA Turns Positive After Augusta Disruption

The Tip Desk · October 26, 2026 · 3 min read

Adjusted EBITDA from continuing operations was $24 million in the third quarter, after negative $8 million in the second quarter.

Clearwater Paper Corporation (CLW), an independent supplier of bleached paperboard, reported adjusted EBITDA from continuing operations of $24 million for the third quarter ended September 30, 2026, after a negative $8 million result in the second quarter.

Net sales were $385 million, down from $399 million a year earlier, primarily driven by lower market pricing. The paperboard maker posted a net loss from continuing operations of $2 million, or $0.10 a share, compared with a net loss of $54 million, or $3.34 a share, a year earlier. Adjusted EBITDA of $24.4 million fell within the company’s $20 million to $30 million guidance range and produced a 6.3% margin from continuing operations.

The year-over-year increase in adjusted EBITDA was due to the timing of a planned major maintenance outage at Lewiston, Idaho, offset by reduced sales prices. The Lewiston outage occurred in the third quarter of 2025 rather than in the second quarter of 2026. Selling, general and administrative expenses were 5.2% of net sales, versus 6.2% in the third quarter of 2025.

Average selling price improved by $34 a ton versus the second quarter of 2026, primarily driven by previously announced price increases and sales mix improvement, according to the company. Paperboard average net selling price was $1,111 a ton, down 4% from $1,160 a ton a year earlier. President and Chief Executive Officer Arsen Kitch said the company successfully implemented its first announced price increase and continued to make progress on a second.

Sales volumes were 322,265 tons, a decrease of 1% compared with 324,198 tons a year earlier. That reversed an 8% year-over-year volume increase in the second quarter, when shipments were 328,722 tons. Kitch said volumes and costs were negatively affected by a significant operational disruption at the Augusta mill late in the third quarter, with the impact largely offset by a portion of representation and warranty insurance settlements. Operational issues continued into October, he said, and the company was making progress getting the mill back to normal operating conditions.

The company received $17.5 million in additional representation and warranty insurance proceeds in the quarter. It executed a refinancing of all debt, meaningfully extending maturities, and reported net leverage of 3.2 times and liquidity of $221 million. Net debt was $260.7 million at September 30, 2026. For the nine months ended September 30, Clearwater reduced net debt by $56 million, driven by net working capital reductions, tax refunds and additional insurance proceeds.

Cash and cash equivalents were $35.7 million at quarter-end, with $276.7 million of restricted cash held for redemption of debt. Net cash provided by operating activities was $30.6 million in the third quarter. Additions to property, plant and equipment, net, were $14.7 million.

Kitch said the company is optimistic about a continued recovery in SBS industry conditions, even as it faces cost headwinds in transportation and chemicals. RISI is forecasting improved pricing later this quarter and into next year, which the chief executive said should help recover some of the cost increases and put the company on the path toward its cross-cycle adjusted EBITDA margins and cash flows.