Clearwater Paper Delivers Strong Q2 2026 Performance, Drives Industry Momentum with Strategic Moves
Clearwater Paper, a leading provider of pulp and paper products, has reported impressive second-quarter 2026 results, driven by strong shipment volumes and strategic cost-cutting initiatives. According to the company's recent conference call transcript, Clearwater Paper's shipment volumes grew by a robust 8% year-over-year, offset by a 9% decline in market pricing.
Adjusted EBITDA for the quarter came in at negative $8 million, within the company's guidance range. However, this was largely due to higher-than-expected transportation costs, partly driven by the ongoing Russia-Mexico (RM) war. Despite these challenges, Clearwater Paper successfully completed a major maintenance outage at its Lewiston, Idaho facility on time and on target, with total direct expenses of around $22 million.
The company has also been actively working to reduce costs and improve margins through the cycle. This includes restructuring its Cypress Bend Arkansas facility, resulting in a 20% reduction in roles at the mill and an expected cost savings of $8 million to $12 million on an annualized basis. Furthermore, Clearwater Paper's SG&A expenses remained below its targeted range of 6% to 7%, coming in at 5.6% of net sales for the quarter.
One of the most exciting developments from the company is the launch of Circa, its new CRB product line. This line will be sold and distributed through Clearwater Paper's network while being manufactured by Green Paper, aligning with the company's strategy to offer a broader product range to its North American converter customers.
Industry conditions are also showing signs of improvement, with SBS shipment volumes up 6% year-to-date. Industry imports have declined by 11%, and RISI has reflected approximately 300,000 tons of reduced SBS production across the industry since the beginning of the year. This is driving an improvement in SBS operating rates from the low 80% range to a RISI forecast of 88% in the second quarter and over 90% by year-end.
Clearwater Paper has responded to these developments with strategic pricing initiatives, including a $60 per ton price increase announced in June. A second price increase of $60 per ton across all products is set to take effect in August, while RISI forecasts further price increases later this year and into 2027.
As a result, Clearwater Paper expects its second-quarter price increase and the subsequent RISI price index changes to lead to a $50 million to $60 million annual improvement in EBITDA. This is a testament to the company's ability to navigate industry challenges and drive growth through strategic initiatives.
