CLW

Clearwater Paper Corp

NYSE · MATERIALS · PAPERBOARD MILLS

19.29

+0.25 +1.31%

USD · close Oct 23

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MKT CAP $311.1MP/E —DIV YIELD —FCF YIELD -17.33%REV TTM $1.5B +2.3%NET INCOME −$25.1M −114.5%NET DEBT $237.3M52W 12.44 – 23.31SEC XBRL · TTM TO Invalid Date

How CLW rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

62%

of sentences unchanged

Added

new sentences

Dropped

sentences removed

Length

+92

words, now 10,173

New in FY2025

RISKS RELATED TO OUR INDUSTRY, THE MARKETS IN WHICH WE OPERATE, AND THE PRODUCTS THAT WE OFFER Difficult industry and market demand conditions have in the past and may continue to adversely affect the operating results and cash flows of our business.
Our business has historically been affected by cyclical market demand.
Increases in paperboard supply have and may continue to adversely affect our operating results and financial condition.
Several significant investments in paperboard manufacturing facilities in North America and globally have been announced, with one large facility beginning production in 2025.
This expanded supply has and could continue to significantly increase the production and supply of Solid Bleached Sulfate (SBS) and Folding Boxboard (FBB) paperboard in the market.
If demand does not increase commensurate with supply, it could continue to result in lower capacity utilization and affect the price of SBS, which could materially and adversely affect our results of operations and cash flows.
Lack of diversification of products exposes us to other market-related risks and uncertainties.
We currently manufacture only SBS paperboard and a limited quantity of market pulp.
Due to this lack of diversification, any adverse developments in the pulp and paperboard industry could have a significantly greater impact on our overall financial condition and results of operations than if we maintained multiple lines of business or manufactured multiple substrates within the paperboard segment.
Our top 10 customers accounted for 46% of our sales in 2025.
In 2025, we experienced increased price competition in our paperboard business along with a significant drop in demand due to market conditions.
Approximately 49% of our customer agreements in effect as of December 31, 2025 adjust pricing based on a third-party industry quoted list price and we have no influence over the timing and magnitude of these price changes.
If we lose one or more of our large customers or if we experience a significant decline in the volume of purchases or the pricing paid by any of them, we may not be able to quickly replace the lost revenue, and our operating results and business could be harmed.
The ongoing consolidation of paperboard and paperboard converting businesses, including through the acquisition and integration of converting businesses by competitors of ours, could result in a loss of customers and sales.
RISKS RELATED TO OUR BUSINESS STRATEGY If we are unable to continue to implement our business plan and strategic initiatives, our financial condition and operating results could be materially affected.
We may incur significant costs or be unable to realize the expected benefits of our restructuring initiatives.
In response to the Tissue Divestiture and current paperboard market conditions, we have made and expect to continue to make certain changes to our functional and leadership structure to reduce operating expenses and adjust cash flows.
We may not achieve the expected benefits from strategic acquisitions, partnerships, joint ventures, divestitures, capital investments and other corporate transactions that we have pursued in the past and may pursue in the future.
We may pursue strategic acquisitions, joint ventures, divestitures, capital investments and other corporate transactions, such as our acquisition in May 2024 of our paper mill in Augusta, Georgia.
We may not achieve the expected benefits associated with any such transactions in which we engage.
Among the benefits we would expect from potential acquisitions and joint ventures are synergies, cost savings, growth opportunities and access to new markets (or a combination thereof), and in the case of divestitures, the realization of proceeds from the sale of assets to purchasers who place higher strategic value on such assets than we do.
Corporate transactions of this nature which we may pursue involve a number of special risks, including our inability to realize our business goals with respect to such transactions as noted above, the focus of our management’s attention on these transactions and the integration of acquired businesses into our operations, the demands on our financial, operational and information technology systems resulting from acquired businesses, and the possibility that we may become responsible for substantial contingent or unanticipated legal and operational liabilities as the result of acquisitions or other corporate transactions.
Failure to achieve the expected benefits of a transaction could have a material adverse effect on our business, financial condition, results of operations and cash flows and may require us to record an impairment charge for goodwill or fixed assets.
RISKS RELATING TO OUR OPERATIONS AND COST STRUCTURE We incur significant expenses to maintain our manufacturing equipment and any interruption in the operations of our facilities may harm our operating performance.
For example, in the first quarter of 2024, extreme cold and related natural gas supply issues resulted in the shutdown of our Lewiston, Idaho mill.
We rely on information technology in critical areas of our operations, and a disruption relating to such technology could harm our operations and financial condition.
In addition to traditional IT systems, we rely on operational technology, industrial control systems, and plant-floor networks, collectively operational technology or OT, to operate manufacturing equipment, control processes, and maintain production continuity.
These systems are increasingly interconnected with enterprise IT systems.
We have different legacy IT and OT systems that we are continuing to integrate, upgrade and move to the cloud.
In addition, we may underestimate the costs, complexity and time required to develop and implement and operating new systems.
Our business operations rely upon secure technology systems for data capture, processing, storage and reporting.
Despite careful security and controls design, implementation and updating, our information technology systems or operational technology systems could become subject to cyber-attacks.
Cybersecurity threats facing us include ransomware, data encryption, extortion, denial-of-service attacks, and other attacks designed to disrupt system availability or impair our ability to access critical data and systems.
Such attacks could prevent us from operating manufacturing facilities, fulfilling customer orders, processing transactions, or meeting contractual obligations and may result in damage to equipment, safety incidents, environmental impacts, any of which could have a material adverse effect on our business, results of operations, and financial conditions.
In the event of a cybersecurity incident, our ability to restore systems, data, or operations in a timely manner may be limited by the complexity of our environment, the nature of the incident, or dependencies on third parties.
Recovery efforts may require significant time, resources, and expense, and in some cases systems or data may not be fully recoverable.
Extended recovery periods could magnify the operational, financial, and reputational impacts of a cybersecurity incident.
A cybersecurity incident may also affect our ability to make timely and accurate disclosures under applicable securities laws.
Determining the materiality, scope, and potential impact of a cybersecurity incident can involve significant judgment and may depend on information that is not immediately available.
As a result, we may face challenges in assessing disclosure obligations or communicating the full extent of an incident while investigations and remediation efforts are ongoing.

and 40 more.

Gone since FY2024

TRANSACTION RISK FACTORS We may not realize the expected benefits of the acquisition of the Augusta Facility because of integration difficulties or other challenges.
Our long-term growth strategy involves strengthening our position as a premier, independent supplier of paperboard products to North American converters.
On May 1, 2024, we completed the purchase of the consumer packaging business operating out of the paperboard mills and associated facilities in Augusta, Georgia (the “Augusta Facility”) from Graphic Packaging International, LLC.
We may not be able to maintain the levels of revenue, earnings or operating efficiency that we estimate for the Augusta Facility.
In addition, the success of the acquisition will depend, in part, on our ability to realize the anticipated benefits from the acquisition, including anticipated revenue, customer growth and cost structure and production scale benefits.
The integration process has been and will continue to be complex, costly and time-consuming.
The potential risks associated with our efforts to integrate the Augusta Facility operations and business include, among others: ▪ failure to implement effectively our business plan for the addition of the operations and business into our existing systems; ▪ unanticipated issues in integrating financial, manufacturing, logistics, information, information technology, communications and other systems; ▪ failure to retain key employees; ▪ failure to retain key customers; ▪ increased working capital needs, which could require additional debt and result in higher interest; ▪ inconsistencies in standards, controls, procedures and policies, including internal control and regulatory requirements under the Sarbanes-Oxley Act of 2002; and ▪ unanticipated issues, expenses and liabilities.
Further, the integration of the Augusta Facility requires the focused attention of our management team, including a significant commitment of their time and resources, which may divert management’s attention from other business concerns.
The need for our management to focus on integration matters could have a material and adverse impact on our sales and operating results.
Any inability by us to integrate and manage the Augusta Facility, any inability to achieve anticipated revenues, cost savings or other anticipated benefits from the acquisition in the time frame we anticipate or any unanticipated required increases in capital spending could adversely affect our business, financial condition, results of operations or liquidity.
The Tissue Divestiture may disrupt our remaining business or not achieve its intended benefits.
A number of risks and challenges may arise from the divestiture, including purchase price adjustments, unexpected costs, charges or expenses and disruption in our remaining business, including potential adverse changes to relationships with customers, employees, suppliers or other parties resulting from the divestiture process.
The Tissue Divestiture may also be disruptive to our regular operations, diverting the attention of our workforce and management team from the day-to-day operation of our business, making the execution of business and other potential strategies more difficult, and could result in increased undesired workforce turnover, including of key leaders or other personnel.
We may not realize some or all of the anticipated benefits from the Tissue Divestiture with respect to the anticipated performance of our remaining business.
The Company may experience continued financial exposure as a result of the Tissue Divestiture, through the retention of certain liabilities, including, for example, with respect to certain environmental claims.
The Tissue Divestiture may not enhance long-term stockholder value as anticipated and/or the efforts required to complete the divestiture process may be more costly or time-consuming than expected.
Any of the foregoing could result in the imposition of obligations that could have a material adverse effect on our business, operating results or financial condition.
We may incur significant costs or be unable to realize the expected benefits and long-term savings associated with our restructuring initiatives.
In response to the Tissue Divestiture, we have made and will continue to make certain changes to our functional and leadership structure to reduce operating expenses and adjust cash flows.
Our inability to take unilateral actions at the Lewiston facility could have an adverse effect on our business, operating results or financial condition.
The Tissue Divestiture changes our exposure to other risks and uncertainties.
As a result of the Tissue Divestiture, our pulp and paperboard segment is our only line of business, and thus we are a smaller and more narrowly-focused business than prior to the Tissue Divestiture.
Due to this lack of diversification, any adverse developments in the pulp and paperboard industry could have a significantly greater impact on our overall financial condition and results of operations than if we maintained multiple lines of business.
RISKS RELATED TO OUR BUSINESS OPERATIONS AND THE MARKETS IN WHICH WE OPERATE Difficult industry and market conditions may adversely affect the operating results and cash flows of our business.
For example, demand for our paperboard products surged during and following the COVID-19 pandemic, due to increased packaging and other usage of paperboard needed to address substantially higher consumer activity.
In response to this demand, our customers added to their paperboard inventories.
As consumer activity leveled out, our customers deployed their inventories to address their paperboard needs, leading to an overall decline in paperboard demand and prices in 2023 and 2024.
If this trend continues, we may experience a further decline in paperboard demand, we may be unable to sustain pricing, and we may need to take production downtime.
Our top 10 paperboard customers accounted for 45% of our sales in 2024.
In 2024, we experienced increased price competition in our paperboard business along with a significant drop in demand due to market conditions.
If we lose one or more of our large customers or if we experience a significant decline in the level of purchases by any of them, we may not be able to quickly replace the lost business volume, and our operating results and business could be harmed.
Increases in paperboard supply could adversely affect our operating results and financial condition.
Several significant investments in paperboard manufacturing facilities in North America and globally have been announced, which could significantly increase the production and supply of Solid Bleached Sulfate (SBS) and Folding Boxboard (FBB) paperboard in the market.
If demand does not increase commensurate with supply, it could result in lower capacity utilization and effect the price of SBS, which could materially and adversely affect our results of operations and cash flows.
The ongoing consolidation of paperboard and paperboard converting businesses, including through the acquisition and integration of such converting businesses by competitors of ours, could result in a loss of customers and sales.
Cyclical industry conditions have in the past affected and may continue to adversely affect the operating results and cash flows of our business.
Our business has historically been affected by cyclical market conditions.
We may be unable to sustain pricing in the face of weaker demand, and weaker demand may in turn cause us to take production downtime.
In addition to lost revenue from lower shipment volumes, production downtime causes unabsorbed fixed manufacturing costs due to lower production levels.
We incur significant expenses to maintain our manufacturing equipment and any interruption in the operations of our facilities may harm our operating performance.

and 40 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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