Clearwater Paper Corp (NYSE:CLW) has notified its executive officers and directors of an upcoming trading blackout period in line with the Sarbanes-Oxley Act of 2002 and SEC regulations. The temporary suspension of trading is due to the anticipated completion of the sale of its consumer products division to Sofidel America Corp.
This blackout period, affecting the company's 401(k) plans, is set to commence at 4:00 p.m. Eastern time on December 6, 2024, and is expected to conclude around December 13, 2024. During this time, Clearwater Paper's specified insiders, along with their immediate family members residing with them, are prohibited from trading the company's common stock.
The blackout is part of the company's compliance with federal regulations during significant corporate events, in this case, the divestiture of its tissue business. The transaction was previously announced in a Form 8-K filed on November 1, 2024.
Clearwater Paper has made it clear that the blackout period is directly linked to the divestiture process and has provided a contact for any inquiries regarding the trading restrictions. Marc Rome, Associate General Counsel and Corporate Secretary, is available for questions at the company's headquarters in Spokane, Washington.
This report is based on a press release statement and aims to provide shareholders and the public with essential information regarding the temporary trading restrictions.
In other recent news, Clearwater Paper Corporation reported its third-quarter earnings for 2024, which featured an adjusted EBITDA of $64 million, aligning with the company's guidance range despite being affected by Hurricane Helene.
The company also announced the completion of its tissue business sale to Sofidel for $1.06 billion, a strategic shift marking its transition towards becoming a leading paperboard packaging supplier. The net proceeds of approximately $850 million from this sale will be dedicated to debt reduction.
Furthermore, Clearwater Paper anticipates a decline in its fourth-quarter adjusted EBITDA due to the sale of the tissue business and a major maintenance outage. The company is also refocusing on paperboard packaging, targeting $1.8 billion in revenue at high utilization rates, and aims for $50 million in annual cost savings through fixed costs reduction and SG&A optimization.
Despite the projected decline in adjusted EBITDA of $25 million to $30 million in Q4 and an additional $2 million to $3 million impact expected from Hurricane Helene, the company maintains a strong position in the paperboard packaging market post the tissue business sale.
Clearwater Paper is exploring expansion into CUK supply due to its limited availability in the independent market, reflecting its innovative approach and response to market demands. These are among the recent developments in the company's strategic direction and financial performance.
InvestingPro Insights
As Clearwater Paper Corp (NYSE:CLW) prepares for the sale of its consumer products division, recent financial data and market trends provide additional context for investors. According to InvestingPro, the company's market capitalization stands at $447.49 million, reflecting its current market valuation as it undergoes this significant transition.
InvestingPro Tips highlight that management has been aggressively buying back shares, which could be seen as a vote of confidence in the company's future prospects post-divestiture. Additionally, the stock's valuation implies a strong free cash flow yield, potentially indicating that the market may be undervaluing the company's ability to generate cash.
However, it's worth noting that Clearwater Paper's stock has taken a significant hit over the last six months, with a price total return of -43.95%. This decline may be partly due to market uncertainty surrounding the upcoming sale of the consumer products division and its impact on the company's future performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide valuable insights into Clearwater Paper's financial health and market position during this transitional period.
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