Clearwater Paper Q3 2026 Results: Adjusted EBITDA Rises to $24.4 Million as Pricing Improves

Clearwater Paper Corporation reported net sales of $384.9 million for the third quarter of 2026, down from $399.0 million in the corresponding period last year. Adjusted EBITDA from continuing operations increased to $24.4 million from $17.8 million, supported by improved pricing and product mix, cost-reduction initiatives and lower selling, general and administrative expenses.

The company recorded a net loss from continuing operations of $1.6 million, compared with a loss of $53.9 million in the third quarter of 2025. The prior-year result included a $48 million goodwill impairment charge.

Operating income from continuing operations reached $2.5 million, reversing an operating loss of $55.4 million a year earlier. The latest quarter also marked an improvement from the second quarter of 2026, when Clearwater Paper reported an adjusted EBITDA loss of $8.2 million.

Despite the improvement in profitability, production disruptions at the Augusta mill and lower paperboard sales volumes continued to affect the company's performance. Clearwater Paper expects adjusted EBITDA of $10 million to $20 million in the fourth quarter, reflecting seasonal shipment patterns, additional operational disruptions and planned maintenance.

Key financial results

Clearwater Paper's third-quarter financial performance improved year on year, particularly in operating income and adjusted EBITDA.

Net sales declined approximately 3.5% year on year, reflecting lower average selling prices and reduced volumes. However, the improvement in adjusted EBITDA demonstrates the benefits of pricing and product mix, cost reductions and lower overhead expenses.

Selling, general and administrative expenses decreased to $20.1 million from $24.7 million in the prior-year quarter. The company also recorded a net benefit of $1.4 million under other operating charges, compared with a net charge of $1.5 million a year earlier.

Adjusted EBITDA improves as pricing and cost reductions support margins

Adjusted EBITDA from continuing operations rose by $6.6 million compared with the third quarter of 2025.

The company attributed the improvement primarily to cost-reduction initiatives, lower selling, general and administrative expenses, and the timing and cost effects of operational disruptions. These benefits were partly offset by lower paperboard and pulp market pricing and reduced production volumes.

The adjusted EBITDA margin increased to 6.3% from 4.5% a year earlier, indicating improved profitability despite lower revenue.

On a sequential basis, adjusted EBITDA improved from a loss of $8.2 million in the second quarter to positive $24.4 million in the third quarter. Higher market pricing and a more favourable product mix contributed $8.9 million to the sequential improvement, while lower paperboard sales and production volumes reduced earnings by $1.6 million.

The absence of the Lewiston outage also supported the comparison, although the benefit was partly offset by war-related inflation. Lower selling, general and administrative expenses provided a further $1 million contribution.

Paperboard pricing shows signs of recovery

Market pricing remains an important factor in Clearwater Paper's financial outlook.

The company's average realised pricing in the third quarter was lower than a year earlier but increased by $34 per ton compared with the second quarter of 2026.

Industry pricing indicators also point to improving conditions. Folding carton and cup paperboard prices were reported to have increased by $60 per ton during 2026, with additional increases expected in the wider market through the end of 2027.

Approximately half of Clearwater Paper's sales volume is linked to the RISI price index, meaning changes in benchmark prices can take several quarters to flow through to the company's reported results.

The delayed effect of pricing changes is important for the earnings outlook. While recent market increases may support future revenue and margins, their full benefit will depend on contract structures, product mix, shipment volumes and the timing of implementation.

The company expects $15 million to $20 million in benefits from recently announced price increases during 2026. These gains are expected to be partly offset by approximately $70 million in carryover price decreases originating in 2025.

Production disruptions continue to affect volumes

Paperboard production and sales volumes remained under pressure during the third quarter.

Paperboard sales volumes totalled 322,265 tons, down from 324,198 tons in the third quarter of 2025. Production volumes declined to 307,749 tons from 319,615 tons.

The company reported that production disruptions affected volumes, with additional operational challenges at the Augusta mill expected to continue into early fourth-quarter operations.

Demand conditions nevertheless remained supportive in certain product categories. Clearwater Paper reported solid demand and robust backlogs for extruded products, providing some resilience against the wider production challenges.

The balance between market demand and available production capacity will remain important in determining how much of the benefit from improved pricing can translate into higher earnings.

Foodservice and folding carton sales show differing trends

Clearwater Paper's third-quarter net sales reflected contrasting performance across its principal product categories.

Foodservice sales declined to $162.6 million from $182.0 million in the third quarter of 2025. Folding carton sales increased slightly to $143.5 million from $143.0 million.

Sheeting and distribution revenue was broadly stable at $38.0 million, compared with $37.9 million a year earlier. Pulp and other revenue increased to $40.7 million from $36.1 million.

The results highlight the importance of product mix in Clearwater Paper's revenue and profitability. While folding carton and certain other categories remained resilient, lower foodservice sales represented a significant pressure on overall revenue.

The company continues to operate in a market where pricing and demand differ across end-use categories, including foodservice, folding carton and other paperboard applications.

Balance sheet strengthened through debt refinancing and cash management

Clearwater Paper reported net leverage of 3.2 times under its bank agreement definition and available liquidity of $221 million at the end of the third quarter.

The company also refinanced its debt, extending maturities to 2031. Net debt was reduced by $56 million during the first nine months of 2026 through working-capital initiatives, insurance recoveries and a tax refund.

The stronger liquidity position provides financial flexibility as the company manages operational disruptions, planned maintenance and capital expenditure requirements.

For the full year, Clearwater Paper expects capital expenditure of $55 million to $60 million. Major maintenance costs for the Lewiston and Cypress Bend mills are expected to total $27 million to $29 million.

The company also expects net working-capital improvements of $25 million to $30 million, primarily through inventory reductions.

Fourth-quarter outlook: Adjusted EBITDA expected at $10 million to $20 million

Clearwater Paper expects adjusted EBITDA from continuing operations of $10 million to $20 million in the fourth quarter of 2026.

The outlook reflects several offsetting factors:

• Lower seasonal shipments and additional operational disruption at the Augusta mill in early Q4.

• Expected benefits of $8 million to $12 million from price increases.

• Planned major maintenance costs of $5 million to $7 million at the Cypress Bend mill.

• Seasonal energy increases and additional war-related costs, primarily in transportation, estimated at $5 million to $6 million.

For the full year, the company expects revenue of approximately $1.5 billion.

Productivity improvements and restructuring measures are expected to help offset higher costs, including an estimated $28 million to $32 million impact associated with war-related costs.

The near-term outlook therefore remains dependent on operational reliability, shipment volumes, the timing of price increases and the company's ability to maintain cost discipline.

Outlook: Improving margins, but execution remains critical

Clearwater Paper's third-quarter results show progress in restoring profitability. Adjusted EBITDA increased year on year, operating income returned to positive territory and the company improved its balance-sheet flexibility through debt refinancing and working-capital measures.

However, lower net sales, production disruptions and continued pressure on volumes indicate that the recovery remains incomplete. The anticipated benefits from improved market pricing will also take time to flow through the company's results.

The fourth quarter will be an important test of Clearwater Paper's ability to maintain positive adjusted EBITDA while managing seasonal demand, mill disruptions and planned maintenance.

For the US paperboard sector, Clearwater Paper's results point to an environment in which improving prices offer support, but operational reliability, cost management and the timing of price realisation remain decisive for earnings.