Clearwater Paper Corp., the Potlatch Corp. spin-off that has major operations in Lewiston, on July 30 reported second quarter net earnings of $75.4 million, or $6.43 per diluted common share, compared to $5 million, or 44 cents a share, a year earlier. Net earnings for this year's second quarter were $17.9 million, or $1.52 per share not including income from alternative fuel mixture tax credits, benefits from renewable energy tax credits, and a reduction in the valuation allowance related to state investment tax credits and debt retirement costs.

Real estate investment trust Potlatch, meanwhile, on July 28 reported earnings from continuing operations for the quarter of $3.7 million, or 9 cents per diluted common share, compared to $18.9 million, or 48 cents a share in the second quarter of 2008. Net earnings for the quarter, including discontinued operations, were $3.8 million, or 9 cents a share, compared to $21.5 million, or 54 cents per diluted common share for Q2 2008. Potlatch also announced a $50.2 million timber deed sale.

Clearwater said that in its pulp and paperboard segment, operating income for the second quarter of 2009 was $32.2 million compared to operating income of $7.1 million for the second quarter of 2008. Net sales of $139.4 million for the quarter were up 13 percent from a year earlier.

In Clearwater's wood products segment, the operating loss for the second quarter of 2009 was $4.5 million, compared to an operating loss of $3.6 million for the second quarter of 2008. Net sales of $16.6 million for the quarter were down 40 percent from a year earlier.

Corporate and eliminations expenses for the second quarter of 2009 were $7.4 million compared to a positive overall adjustment of $1.5 million for the second quarter of 2008. Clearwater Paper said the unfavorable comparison was due largely to higher corporate administration expenses in 2009 associated with being an independent, publicly traded company compared to the portion of Potlatch's corporate expense allocated to the company's business segments prior to the spin-off, as well as a positive intra-company inventory adjustment in 2008.

Clearwater Paper completed a private placement of $150 million in senior unsecured notes due in 2016. The notes have an interest rate of 10.625 percent and were issued at a price equal to 98.792 percent of face value. Net proceeds were used to satisfy the company's payment obligations with respect to principal and interest on $100 million principal amount of credit-sensitive debentures originally issued by an affiliate of Potlatch Corp., and, prior to the spin- off from Potlatch, the company retained the obligation to pay all amounts due to the holders. The remaining net proceeds are expected to be used for general corporate purposes.

Credit: IBR Staff

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