Q Earnings Conference Call February 7, 2012

Transcription

1 Q Earnings Conference Call February 7, 2012 Henry C. Newell President and Chief Executive Officer Perry D. Grueber Director Investor Relations Scott P. Doescher Executive Vice President, Finance Q Earnings Call 1

2 Forward Looking Statements The matters discussed in this presentation concerning the company s future performance or anticipated financial results are forward-looking statements and are made pursuant to the safe harbor provisions of the Securities Reform Act of Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements. Among other things, these risks and uncertainties include the strength of the economy and demand for paper products, increases in raw material and energy prices, manufacturing problems at company facilities, and other risks and assumptions described under Information Concerning Forward-Looking Statements in Item 7 and in Item 1A of the company s Form 10-K for the year ended December 31, The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. Non-GAAP Financial Measures This presentation refers to certain non-u.s. GAAP financial measures. A reconciliation of those numbers to U.S. GAAP financial measures is provided on the Company's website at: Q Earnings Call 2

3 Q4 Summary Adjusted EPS $.04 Includes Estimated Brokaw Mill Impact Q4 ($.03) $.02 Tissue Operating Margins 12% Completed $43MM Sale of Remaining Timberlands Announced Exit from Print & Color Premium Brand Sale Brokaw Mill Closure $0.24 $0.12 $0.00 $0.22 $0.11 $0.00 Adjusted Net Earnings Per Share $0.14 $0.14 Q Adj. Earnings $0.11 $0.04 Q4 10 Q3 11 Q4 11 $0.06 Quarterly Q vs. Q ($0.10) ($0.02) Price / Mix Volume Fiber / Energy Price ($0.04) Other See Appendix for presentation of Adjusted Net EPS reconciled to EPS. $0.04 Q Adj. Earnings Q Earnings Call 3

4 2011 Summary Adjusted EPS $.25 Includes Estimated Brokaw Mill Impact Full Year ($.10) $.04 Strongest Technical Sector Profit Since 1999 $220 Million Tissue Expansion on Schedule $27 Million Brainerd Paper Machine Rebuild Complete Supports Tape Growth $0.80 $0.40 $0.00 $1.00 $0.50 $0.00 Adjusted Net Earnings Per Share $0.01 $0.59 $0.48 $ $0.48 $0.36 Annual 2010 vs ($0.29) ($0.32) 2010 Price / Mix Volume Fiber / Energy Price $0.02 $0.25 Other 2011 See Appendix for presentation of Net EPS reconciled to EPS. Q Earnings Call 4

5 TISSUE Q Earnings Call 5

6 Tissue Highlights Q4 Adjusted Operating Profit $10.4MM 12% Operating Margins Full Realization of Price Actions Wastepaper Costs Moderate From Q3 Peak Value-Added Mix Strong $MM $15 $10 $5 $0 $MM $60 $40 $20 $0 Adjusted Operating Profit Quarterly $11.1 $10.4 $9.0 $7.7 $6.5 Q4 Q1 Q2 Q3 Q Annual $49.5 $46.1 $32.8 $ See Appendix for presentation of Adjusted Operating Profit reconciled to Operating Profit. Q Earnings Call 6

7 $220MM Tissue Expansion Progressing on Schedule and on Budget $47MM Spending Through the Fourth Quarter Includes $2MM of Project Expense Expect Q1 Spending of $60MM Q Startup; Q Commercial Production Q Earnings Call 7

8 2013 Tissue Machine Startup Plan (tons 000) Q Startup Q1 Q2 Q3 Q4 Conventional ATMOS Q Earnings Call 8

9 Tissue Expansion EBITDA ($MM) $180 Estimated Growth Profile $150 $120 $60 $64* $ Goal 2017 * Adjusted to exclude expenses associated with the Tissue expansion project Q Earnings Call 9

10 PAPER Q Earnings Call 10

11 Paper Highlights Exit Print & Color Announced Brokaw Mill Closure Estimated Brokaw Mill Impact ($MM) Q4 $(2) $1 Full-Year $(7) $3 Weakness in Coated Products Overall Technical Markets Stable $MM $9 $6 $3 $0 -$3 $MM $40 $20 $0 -$20 $4.5 Adjusted Operating Profit Quarterly $2.6 $3.1 $5.6 -$1.1 Q4 Q1 Q2 Q3 Q $4.8 $21.9 Annual $16.2 $ See Appendix for presentation of Adjusted Operating Profit reconciled to Operating Profit. Q Earnings Call 11

12 Paper Technical Profit Growth ($MM) $30 $20 $19.3 $21.0 $10 $11.2 $0 -$10 -$ Q Earnings Call 12

13 Paper Segment Relatively Insensitive to Fiber Moves $/ton $1,000 $800 $600 $400 Market Pulp - NBSK Revenue % Market 60% % Contract Structures 40% Fiber % Market 42% % Integrated 29% % Contract Structures 29% Net Exposure Impact +/- $40 Ton (Pulp) +/- $2MM Q Earnings Call 13

14 Brainerd Commercialization on Plan 100% Percent of Machine Hours 50% 0% B7 Rebuild 12% 70% 70% 60% 40% 26% 24% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Technical Print/Transition Q Earnings Call 14

15 FINANCE Q Earnings Call 15

16 Timberland Sales Sold 80,200 Acres of Commercial Lands $42.9MM ($535/Acre) Extensively Marketed by LandVest Timberlands Available Offsets Effectively Defer Tax up to 6 Years Cellulosic Biofuel Producers Tax Credit Losses Associated with Brokaw Closure Bonus Depreciation Concludes Sales Program Initiated in 2005 Q Earnings Call 16

17 Print & Color Exit Sold Premium Brands, Select Equipment & Inventory to Neenah Paper for $21MM Brokaw Mill Closure 2012 Papermaking Q1 / Converting Q2 Expect Inventory / Receivables Liquidation $40MM Expect $20MM in Net Cash (2012) After Satisfaction of Liabilities & Closure Costs Pension and Post-Retirement Benefits Extend Beyond 2012 Q Earnings Call 17

18 Balance Sheet Highlights ($MMs) 12/31/11 9/30/11 12/31/10 Cash & Equivalents $26.7 $3.9 $2.0 Net Working Capital $71.0 $118.9 $109.1 Long-Term Debt $127.7 $162.8 $127.4 Shareholders Equity $196.2 $264.3 $259.7 Debt/Total Capital 39.4% 38.1% 32.9% Q Earnings Call 18

19 Capital Spending Full Year Spending $78MM $45MM from Tissue expansion Expect $162MM 2012 Spending $150MM from Tissue expansion Tightly Managing Remaining Capital ($MM) $200 $150 $100 $50 $0 $162 $78 $46 $43 $ F 2013F All Other Tissue Expansion Q Earnings Call 19

20 Debt Capacity $325MM Borrowing Capacity $200MM Senior Notes / Private Shelf $125MM Bank Credit Facility $224 Million Capacity Available First Maturities in June 2014 Effective Cost Structure ($MM) $400 $200 $0 Net Long-Term Debt $325** $101* 12/31/11 Capacity $224 available for borrowing * Net of $26.7 in cash & cash equivalents ** Includes $50MM in uncommitted private shelf (Note) borrowings Q Earnings Call 20

21 Debt Structure 12/31/11 Outstanding $MM Rate* Senior Notes due 2017 $ % Senior Notes due 2018 $ % IRB due 2023 $ % Bank Facility Exp $ - - Commercial Paper Issued $ % Total 12/31/11 Outstanding $ % Committed Borrowing Senior Notes due 2016 (4/12 Funding) $ % Total Borrowed/Committed $ % * Includes all applicable bank fees Q Earnings Call 21

22 SUMMARY Q Earnings Call 22

23 Wausau Paper Revenue Expectations 2011 $1.0B 2012 Expected $0.9B 2017 $1.1B Technical 37% Tissue 33% Technical 48% Tissue 52% Print 30% Transition 8% Q Earnings Call 23

24 2012 Imperatives Execute our Growth Strategy Tissue +8% Revenue / +3% Cases Paper (Technical) +13% Revenue Execute Tissue Expansion Startup PM3 Q4: Commercialize Q Reposition Brands Complete Exit of Print Q Earnings Call 24

25 2012 Outlook & First Quarter Guidance Moderating pulp and wastepaper costs returning to elevated levels by second half Weak worldwide economic outlook results in continued cautious near term margin outlook in paper Tissue margins back to 12-13% range First quarter guidance $.04-$.07 Q Earnings Call 25

26 Q Earnings Conference Call February 7, 2012 Henry C. Newell President and Chief Executive Officer Perry D. Grueber Director Investor Relations Scott P. Doescher Executive Vice President, Finance Q Earnings Call 26

27 Q & A Q Earnings Call 27

28 APPENDIX Q Earnings Call 28

29 Net Earnings Net Earnings to Adjusted Net Earnings Q4 10 Q3 11 Q4 11 GAAP Net Earnings (Loss) per Share $ 0.31 $ 0.10 $ (0.58) Gain on Sale of Timberlands - - (0.47) Capital Related Expense - Tissue Brokaw Closure Charges Alternative Fuel Mixture Excise Tax Credit Natural Gas Transportation Contract Adjustment Alternative Fuel Mixture Tax Credit Conversion (0.28) - - Cash Balance Pension Plan Curtailment Adjusted Net Earnings per Share 1 $ 0.14 $ 0.11 $ Differences in total due to rounding Q Earnings Call 29

30 Quarterly Reconciliations Operating Profit to Adjusted Operating Profit ($MM) Paper Segment Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Operating Profit (Loss) $ (0.7) $ (1.4) $ 2.4 $ 5.6 $ (82.9) Brokaw Operating Schedule Change and Closure Charges Alternative Fuel Mixture Excise Tax Credit Natural Gas Transportation Contract Adjustment Capital Related Expenses Adjusted Operating Profit 1 $ 4.5 $ 2.6 $ 3.1 $ 5.6 $ (1.1) Operating Profit to Adjusted Operating Profit ($MM) Tissue Segment Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Operating Profit $ 11.1 $ 6.3 $ 8.7 $ 7.0 $ 9.4 Capital Related Expense Adjusted Operating Profit 1 $ 11.1 $ 6.5 $ 9.0 $ 7.7 $ Differences in total due to rounding Q Earnings Call 30

31 Annual 2011 Reconciliations Net Earnings (Loss) to Adjusted Net Earnings FY 08 FY 09 FY 10 FY 11 GAAP Net Earnings (Loss) per Share $ (0.32) $ 0.42 $ 0.75 $ (0.44) Facility Closure and Machine Shutdown Charges Brokaw 24-5 Impact Brokaw Closure Charges Alternative Fuel Mixture Excise Tax Credit - (0.17) (0.00) - Capital Related Expenses Gain on Sale of Yeast Business - (0.03) - - Gain on Sale of Timberlands (0.08) (0.04) (0.10) (0.47) Change in Income Tax Law & Other Items (0.02) Natural Gas Transportation Contract Adjustment Alternative Fuel Mixture Tax Credit Conversion - - (0.28) - Cash Balance Pension Plan Curtailment Adjusted Net Earnings per Share 1 $ 0.01 $ 0.59 $ 0.48 $ Differences in total due to rounding Q Earnings Call 31

32 Annual 2011 Reconciliations Paper FY 08 FY 09 FY 10 FY 11 Operating Profit $ (38.6) $ 9.6 $ 12.3 $ (76.2) Capital Related Expenses Brokaw Operating Schedule Change Alternative Fuel Mixture Excise Tax Credit - (13.5) Facility Closure Charges Gain on Sale of Lake States Yeast - (2.7) - Natural Gas Transportation Contract Adjustment Adjusted Operating Profit $ (4.8) $ 21.9 $ 16.2 $ 10.2 Tissue FY 08 FY 09 FY 10 FY 11 Operating Profit $ 32.8 $ 49.5 $ 46.1 $ 31.4 Capital Related Expense Adjusted Operating Profit $ 32.8 $ 49.5 $ 46.1 $ 33.6 Q Earnings Call 32

33 Key Metrics Financial Measures ($MM): Net Sales $ 1,034.6 $ 1,055.7 $ 1,032.1 $ 1,191.8 EBITDDA* $ 29.7 $ $ $ 52.7 Dividends paid $ 5.9 $ 1.5 $ 4.2 $ 16.7 Average Shares Outstanding in period - millions Statistical Measures: Paper shipments - tons (short) 627, , , ,959 Fiber consumption: Market Pulp (metric tons) 341, , , ,137 Waste Paper (tons) 146, , , ,301 Energy consumption: Natural Gas DTH 3,001,698 3,616,586 3,497,682 3,117,804 Coal - tons 241, , , ,473 * 2011 includes charges of $81.8 million related to the closure of the Brokaw mill Q Earnings Call 33