การแถลงผลประกอบการไตรมาส 3 ปี 2026 ของ Clearwater Paper (CLW): อานิสงส์จากการปรับขึ้นราคา การหยุดชะงักใน Augusta และแนวโน้มไตรมาส 4

บริษัท Clearwater Paper (NYSE: CLW) รายงานกำไรก่อนหักดอกเบี้ย ภาษี ค่าเสื่อมราคา และค่าตัดจำหน่ายที่ปรับปรุงแล้ว (Adjusted EBITDA) สำหรับไตรมาสที่ 3 ปี 2026 ที่ระดับ 24 ล้านดอลลาร์ ซึ่งอยู่ในช่วงประมาณการที่ 20 ล้านดอลลาร์ถึง 30 ล้านดอลลาร์ การกำหนดราคาปรับตัวดีขึ้นเมื่อเทียบกับไตรมาสก่อนหน้า แต่การหยุดชะงักของการดำเนินงานที่โรงงาน Augusta และอัตราเงินเฟ้อที่เกี่ยวข้องกับความขัดแย้งยังคงเป็นปัจจัยกดดันสำคัญ

ประเด็นสำคัญ

• ยอดขายสุทธิอยู่ที่ 385 ล้านดอลลาร์ ลดลง 4% เมื่อเทียบเป็นรายปี ขณะที่ยอดจัดส่งลดลง 1% และการกำหนดราคาตามกลไกตลาดลดลง 4%
• Adjusted EBITDA อยู่ที่ 24 ล้านดอลลาร์ บริษัทรายงานขาดทุนสุทธิจากการดำเนินงานที่ต่อเนื่อง 2 ล้านดอลลาร์ หรือ 0.10 ดอลลาร์ต่อหุ้นปรับลด ซึ่งรวมถึงเงินชดเชยจากประกันภัยจำนวน 17.5 ล้านดอลลาร์
• ราคาขายเฉลี่ยเพิ่มขึ้น 34 ดอลลาร์ต่อตันจากไตรมาสที่ 2 ช่วยเพิ่มผลประกอบการประจำไตรมาสได้เกือบ 8 ล้านดอลลาร์ ทั้งนี้ Clearwater Paper ได้ปรับขึ้นราคาครั้งแรก 60 ดอลลาร์ต่อตันเต็มจำนวนแล้ว และกำลังดำเนินการปรับขึ้นราคาครั้งที่สอง
• การหยุดชะงักของโรงงาน Augusta ส่งผลให้การผลิตและการจัดส่งลดลง ฝ่ายบริหารเปิดเผยว่า เมื่อเร็ว ๆ นี้โรงงานดังกล่าวเดินเครื่องต่ำกว่าระดับการผลิตที่จำเป็นสำหรับประสิทธิภาพการทำงานปกติอยู่ 10% ถึง 15%
• คาดว่า Adjusted EBITDA สำหรับไตรมาสที่ 4 จะอยู่ที่ 10 ล้านดอลลาร์ถึง 20 ล้านดอลลาร์ ซึ่งสะท้อนถึงปริมาณการขายที่ลดลงตามฤดูกาล ความท้าทายในการดำเนินงานของโรงงาน Augusta ค่าใช้จ่ายในการบำรุงรักษา รวมถึงต้นทุนพลังงานและต้นทุนที่เกี่ยวข้องกับความขัดแย้งที่สูงขึ้น
• Clearwater Paper เสร็จสิ้นการรีไฟแนนซ์ซึ่งขยายอายุหนี้ออกไปเป็นปี 2031 โดยอัตราดอกเบี้ยที่แท้จริงในไตรมาสที่ 3 อยู่ที่ 8.25% และคาดว่าค่าใช้จ่ายดอกเบี้ยรายปีจะอยู่ที่ประมาณ 25 ล้านดอลลาร์ในอนาคต

ข้อมูลทางการเงินที่สำคัญ

ผลการดำเนินงานทางธุรกิจและการปฏิบัติการ

การกำหนดราคาเริ่มปรับตัวดีขึ้นในระหว่างไตรมาส ฝ่ายบริหารคาดว่าการปรับขึ้นราคาครั้งแรก 60 ดอลลาร์ต่อตันจะให้ผลประโยชน์รายปีมากกว่า 70 ล้านดอลลาร์ โดยคาดว่าจะเกิดขึ้นในปี 2026 จำนวน 15 ล้านดอลลาร์ถึง 20 ล้านดอลลาร์ ทั้งนี้ เกือบ 50% ของปริมาณการขายของบริษัทเชื่อมโยงกับดัชนี RISI ส่งผลให้เกิดความล่าช้าหลายไตรมาสก่อนที่การเปลี่ยนแปลงของดัชนีจะสะท้อนเข้าสู่ราคาของลูกค้าอย่างเต็มที่

ฝ่ายบริหารระบุว่าอุปสงค์และยอดขายรอรับรู้รายได้ (Backlog) ของกระดาษแข็ง SBS ยังคงแข็งแกร่ง โดยยอดจัดส่งในอุตสาหกรรมตั้งแต่ต้นปีจนถึงไตรมาส 2 เพิ่มขึ้น 6% อุปสงค์สำหรับกระดาษเกรดถ้วยสูงเกินกำลังการผลิตของ Clearwater Paper ทั้งนี้ บริษัทประเมินว่าการผลิตของอุตสาหกรรมแบบปรับเป็นรายปีลดลงประมาณ 800,000 ตันนับตั้งแต่สิ้นปี 2025 ซึ่งอาจส่งผลให้อัตราการเดินเครื่องผลิตสูงเกิน 90% ภายในสิ้นปีเมื่อพิจารณาจากกำลังการผลิตในปัจจุบัน

โรงงาน Augusta ยังคงเป็นข้อจำกัดหลักในการดำเนินงาน โดยเหตุขัดข้องทางไฟฟ้าและเครื่องกลส่งผลกระทบต่อการผลิตเยื่อกระดาษ พลังงาน และการฟื้นคืนสารเคมีของโรงงานในช่วงปลายเดือนกันยายนและตุลาคม Clearwater Paper วางแผนที่จะหยุดเดินเครื่องเพื่อบำรุงรักษาด้วยงบประมาณ 12 ล้านดอลลาร์ถึง 15 ล้านดอลลาร์ในเดือนมกราคม 2027 ตามด้วยการหยุดเดินเครื่องอีกครั้งซึ่งประเมินค่าใช้จ่ายไว้ที่ 7 ล้านดอลลาร์ถึง 10 ล้านดอลลาร์ในไตรมาส 2 หรือไตรมาส 3 ปี 2027

บริษัทยังกำลังขยายกลุ่มผลิตภัณฑ์กระดาษแข็งให้ครอบคลุมยิ่งขึ้น ผลิตภัณฑ์ Circa CRB ที่เปิดตัวร่วมกับ Greenpaper อยู่ระหว่างการทดสอบโดยลูกค้า และ Clearwater Paper วางแผนเปิดตัวกลุ่มผลิตภัณฑ์ CUK จากโรงงาน Cypress Bend ภายในสิ้นปี โดยเลือกใช้ทางเลือกการลงทุนด้วยเงินทุนที่ต่ำกว่าซึ่งใช้เงินประมาณ 3 ล้านดอลลาร์ถึง 5 ล้านดอลลาร์ แทนแนวทางเต็มรูปแบบที่ต้องใช้เงิน 60 ล้านดอลลาร์ ทั้งนี้ ฝ่ายบริหารตั้งเป้าส่วนแบ่ง 20% ถึง 30% จากตลาดรวมที่สามารถเข้าถึงได้ (TAM) สำหรับ CUK ซึ่งประเมินไว้ที่ 300,000 ถึง 400,000 ตัน

แนวทางและประมาณการจากฝ่ายบริหาร

สำหรับไตรมาสที่ 4 ปี 2026 ฝ่ายบริหารคาดว่า:

• Adjusted EBITDA จะอยู่ที่ 10 ล้านดอลลาร์ถึง 20 ล้านดอลลาร์
• ยอดจัดส่งและการผลิตกระดาษแข็งจะลดลงเมื่อเทียบกับไตรมาสก่อนหน้า เนื่องจากปัจจัยทางฤดูกาลและความท้าทายในการดำเนินงานของโรงงาน Augusta
• ผลประโยชน์จากการกำหนดราคาเมื่อเทียบกับไตรมาสก่อนหน้าจะอยู่ที่ 8 ล้านดอลลาร์ถึง 12 ล้านดอลลาร์
• ค่าใช้จ่ายในการบำรุงรักษาโรงงาน Cypress Bend จะอยู่ที่ 5 ล้านดอลลาร์ถึง 7 ล้านดอลลาร์
• ต้นทุนพลังงานที่เพิ่มขึ้นตามฤดูกาลประมาณ 4 ล้านดอลลาร์
• ต้นทุนเพิ่มเติมที่เกี่ยวข้องกับความขัดแย้งจำนวน 1 ล้านดอลลาร์ถึง 2 ล้านดอลลาร์

สำหรับเต็มปี 2026 Clearwater Paper คาดว่ารายได้จะอยู่ที่ประมาณ 1.5 พันล้านดอลลาร์ และปริมาณการจัดส่งจะทรงตัวถึงเพิ่มขึ้นเล็กน้อย แรงกดดันย้อนหลังจากการลดราคาในปี 2025 คาดว่าจะรวมอยู่ที่ประมาณ 70 ล้านดอลลาร์ ซึ่งชดเชยได้บางส่วนด้วยเงิน 15 ล้านดอลลาร์ถึง 20 ล้านดอลลาร์จากการปรับขึ้นราคาในเดือนกรกฎาคมและสิงหาคม

ต้นทุนที่เกี่ยวข้องกับความขัดแย้งตลอดทั้งปีคาดว่าจะอยู่ที่ 28 ล้านดอลลาร์ถึง 32 ล้านดอลลาร์ ขณะที่ต้นทุนทางตรงจากการหยุดเดินเครื่องเพื่อบำรุงรักษาคาดว่าจะสูงถึง 27 ล้านดอลลาร์ถึง 29 ล้านดอลลาร์ ส่วนรายจ่ายลงทุนคาดว่าจะอยู่ที่ 55 ล้านดอลลาร์ถึง 60 ล้านดอลลาร์ ฝ่ายบริหารคาดว่ากระแสเงินสดอิสระสำหรับทั้งปีจะเป็นบวก โดยได้รับการสนับสนุนจาก EBITDA เงินชดเชยจากประกันภัย 50 ล้านดอลลาร์ การลดลงของเงินทุนหมุนเวียน 25 ล้านดอลลาร์ถึง 30 ล้านดอลลาร์ และการคืนภาษี

ฝ่ายบริหารได้ย้ำเป้าหมายตลอดวัฏจักรเศรษฐกิจสำหรับอัตรากำไร Adjusted EBITDA ที่ 13% ถึง 14% และกระแสเงินสดอิสระรายปีมากกว่า 100 ล้านดอลลาร์ โดยระบุว่าหากการปรับขึ้นราคาที่อ้างถึงทั้งหมดเกิดขึ้นจริงครอบคลุมปริมาณการขายของบริษัท รันเรตของ Adjusted EBITDA อาจปรับตัวดีขึ้นเกือบ 200 ล้านดอลลาร์

ความเสี่ยงและประเด็นที่ต้องติดตาม

• โรงงาน Augusta ต้องการเงินทุนและเวลาในการหยุดเดินเครื่องเพิ่มเติมเพื่อแก้ไขสภาพสินทรัพย์ ซึ่งฝ่ายบริหารระบุว่าไม่สามารถตรวจพบได้โดยง่ายในระหว่างการตรวจสอบวิเคราะห์สถานะ
• อัตราเงินเฟ้อที่เกี่ยวข้องกับความขัดแย้งทำให้ต้นทุนในไตรมาสที่ 3 เพิ่มขึ้นประมาณ 12 ล้านดอลลาร์เมื่อเทียบกับปีก่อน โดยหลักมาจากค่าใช้จ่ายด้านการขนส่ง เคมีภัณฑ์ ไม้ และค่าใช้จ่ายที่ผูกกับน้ำมันดีเซล
• การนำเข้าจากยุโรปยังคงทรงตัวได้อย่างแข็งแกร่ง แม้จะมีภาษีศุลกากรและต้นทุนการขนส่ง พลังงาน และเคมีภัณฑ์ที่สูงขึ้น
• การรับรู้ผลจากการปรับขึ้นราคาครั้งที่สองขึ้นอยู่กับส่วนหนึ่งของการยอมรับดัชนี RISI และระยะเวลาความล่าช้าของการกำหนดราคาตามสัญญา
• ได้รับการชำระเงินประกันภัยคำรับรองและการรับประกันงวดสุดท้ายแล้ว ฝ่ายบริหารระบุว่าจะทบทวนทางเลือกที่เหลือซึ่งเกี่ยวข้องกับการเข้าซื้อกิจการ Augusta แต่ไม่ได้ให้รายละเอียดเพิ่มเติม

ประเด็นสำคัญจากการถาม-ตอบกับนักวิเคราะห์

ฝ่ายบริหารประเมินค่าใช้จ่ายในการบำรุงรักษารวมในปี 2027 ไว้ที่ประมาณ 50 ล้านดอลลาร์ ซึ่งรวมถึงค่าใช้จ่ายระดับ 20 ล้านดอลลาร์ตอนต้นถึงตอนกลางที่ Augusta จำนวนเงินใกล้เคียงกันที่ Lewiston และประมาณ 7 ล้านดอลลาร์ถึง 8 ล้านดอลลาร์ที่ Cypress Bend

การปรับขึ้นราคาครั้งแรก 60 ดอลลาร์ต่อตันอาจส่งผลประโยชน์อีก 50 ล้านดอลลาร์ถึง 55 ล้านดอลลาร์ในปี 2027 หากการปรับขึ้นราคาครั้งที่สองถูกนำมาใช้เต็มจำนวนและได้รับการยอมรับภายในสิ้นปี ฝ่ายบริหารประเมินว่าจะเกิดผลประโยชน์เพิ่มเติมอีก 30 ล้านดอลลาร์ถึง 40 ล้านดอลลาร์ในปี 2027 บนสมมติฐานการส่งผ่านต้นทุนตามสัญญาประมาณครึ่งหนึ่งถึงสองในสามของการปรับขึ้นราคา

ที่โรงงาน Cypress Bend ผลิตภัณฑ์ CUK จะถูกผลิตขึ้นโดยการสลับเครื่องจักรที่มีอยู่ระหว่าง SBS และ CUK ฝ่ายบริหารมองเห็นศักยภาพปริมาณการผลิต CUK ที่ 50,000 ถึง 100,000 ตัน และตั้งเป้าที่จะเพิ่มอัตราการใช้กำลังการผลิตของโรงงานไปสู่กำลังการผลิตเต็มที่ซึ่งมากกว่า 300,000 ตัน

ฝ่ายบริหารกล่าวว่าในท้ายที่สุดโรงงาน Augusta อาจสร้าง EBITDA ได้ประมาณ 150 ล้านดอลลาร์ หากราคาในตลาดฟื้นตัวและโรงงานกลับมามีประสิทธิภาพการทำงานปกติ ทั้งนี้ บริษัทเน้นย้ำว่าการบรรลุระดับดังกล่าวจะต้องใช้เงินลงทุนมากกว่าที่คาดไว้ในตอนแรก

ถอดความการแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Thank you for standing by. At this time, I would like to welcome everyone to today's Clearwater Paper Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

I'd now like to turn the call over to Cheri Ellison with Investor Relations. Cheri, please go ahead.

Cheri Ellison

Thank you, Tracy. Good afternoon, and welcome to Clearwater Paper's Third Quarter 2026 Earnings Conference Call. Joining me today are Arsen Kitch, President and Chief Executive Officer; and Sherri Baker, Senior Vice President and Chief Financial Officer. Our third quarter results were released after today's market close, along with the filing of our 10-Q. Supplemental materials, including our current outlook, are available on the Investor Relations page of our website.

Today's discussion includes non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and supplemental materials. Please also refer to the forward-looking statement disclosure on Slide 2 of the supplemental materials, which we incorporate into these remarks by reference.

With that, I'll turn the call over to Arsen.

Arsen Kitch

Good afternoon, and thank you for joining us today. I'll begin with an overview of our third quarter results, provide some perspectives on industry conditions and discuss actions that we're taking to improve performance and broaden our product portfolio. I'll then turn the call over to Sherri to review our financial results in more detail, discuss our recent refinancing and provide our fourth quarter outlook.

Turning now to our third quarter performance. Our adjusted EBITDA was at $24 million, which was within our guidance range of $20 million to $30 million. Results were driven by benefits from our previously announced price increase and no major maintenance outages during the quarter. Partly offsetting that were incremental costs due to the conflict in the Middle East and operational issues at our Augusta mill.

While revenue decreased by 4% versus the third quarter of last year, primarily due to lower market-driven pricing, we're now beginning to realize the benefits of our announced price increases. Average selling price was $34 per ton higher than in the second quarter, contributing nearly $8 million to our quarterly results. We have fully implemented our first announced price increase of $60 per ton and are making progress implementing our second $60 an ounce increase.

Our shipment volumes and production were impacted by significant operational disruptions at our Augusta mill. This was largely offset by a portion of the representation and warranty insurance settlements that we received. On that subject, we received our fourth and final representation and warranty insurance payment of $17.5 million during the quarter for a total of $73 million. As a reminder, these recoveries are related to our August acquisition, where we believe certain representations and warranties made to us were either incomplete or inaccurate.

Finally and most importantly, we completed our debt refinancing, significantly extending maturities by 5 years to 2031. This simplifies our capital structure and provides sufficient liquidity to operate our business.

Let me address the operational disruptions at our Augusta mill during the quarter. In late September and into October, the mill experienced several electrical and mechanical failures in the pulp power and recovery areas of the operation. Due to the interconnected nature of a craft pulp mill and the continuous flow of our manufacturing process, these failures have significant downstream impacts. For those of you familiar with these processes, you will understand how challenging and time-consuming it is to recover from these types of events. We continue to work through the impact of these failures, but we will recover and return the mill back to its normal production capability.

Looking ahead, we will need to invest additional capital dollars in the mill to address asset conditions that were not easily identifiable through a typical diligence process and were not accurately represented to us during the sale. As a result of these disruptions, we were unable to complete some of our planned maintenance work at the Augusta mill in October. We're planning on executing a maintenance outage in January of 2027 with an estimated cost of $12 million to $15 million. We will likely have to take additional downtime in Augusta in Q2 or Q3 of 2027 and to perform maintenance work, with that cost estimated at $7 million to $10 million.

Let me now turn to industry conditions. We are seeing signs of recovery in SBS with year-to-date shipments up 6% through the second quarter compared with declines of 2% to 3% in CUK and CRB. We believe SBS' attractive pricing on a per square foot basis, other with its strength and print characteristics as supporting substitution.

On the supply side, based on publicly available information, we estimate annualized production has decreased by around 800,000 tons since the end of last year. This is a combination of a permanent paper machine closure earlier in the year and temporary curtailments by several industry participants. Based on these assumptions, we estimate that industry operating rates should be above 90% by year-end for current operating capacity.

In terms of industry pricing, RISI has reported a $60 per ton price increase in folding carton and cup grades in July and August. We have fully implemented our first announced $60 price increase and are making good progress implementing our second increase. We see particular strength in our cup grades with customer demand exceeding our capacity. As a reminder, nearly 50% of our total volume is tied to RISI, and it generally takes us a couple of quarters to fully implement index-driven pricing. In total, our first $60 price increase is expected to result in more than $70 million in annual benefit, which started flowing through our financial results during the third quarter.

Let me now turn to imports. Total bleached imports declined by 1% year-to-date through August. We're seeing unexpected resilience in imports from Europe, even with tariffs, higher transportation costs and higher energy and chemical costs. It is likely that European competitors are facing their own supply and demand challenges in their home markets and see the North American market as an outlook for their excess capacity.

Let me summarize my industry comments. The green shoots that we mentioned in previous calls are starting to show up in our financial performance. Pricing is improving, demand and backlogs remain strong and industry operating rates are increasing. RISI SBS price index has already reflected a $60 per ton price increase, with an additional $100 per ton forecasted in folding carton grades by the end of 2027. If all these increases materialize across all our tons, we would expect our adjusted EBITDA run rate to improve by nearly $200 million, helping us get back to our target cross-cycle margins of 13% to 14%.

Lastly, I would like to provide an update on our strategy to broaden our product offering to be able to deliver a full range of paperboard options for independent converter customers. In July of this year, we launched Circa, our CRB offering in partnership with Greenpaper. We're trialing the product with several of our customers and initial feedback has been positive. Given domestic CRB overcapacity, our progress will likely be gradual. As a reminder, our CRB launch required no capital investment and we will take our time developing the right mix of strategic customer relationships versus selling spot tons.

We're continuing to make good progress on developing a CUK product offering from our Cypress Bend mill. We believe that we've developed a highly competitive folding carton grade that we're now trialing with several of our customers. Interest has been strong, and we're planning to formally launch a new CUK product line by the end of the year. As a reminder, we have engineered a capital solution that would enable us to swing the entire Cypress Bend mill this [indiscernible]. The full capital solution has an estimated cost of approximately $60 million. We're pursuing a lower cost capital alternative of approximately $3 million to $5 million. This alternative should provide us with sufficient capacity to establish a meaningful position with independent converter customers. We believe that addressable CUK demand is approximately 300,000 to 400,000 tons, and we're targeting to capture 20% to 30% at demand.

With that, I'll turn the call over to Sherri to discuss our third quarter financial results in more detail and provide our outlook for the fourth quarter.

Sherri Baker

Thank you, Arsen, and good afternoon, everyone. Turning to our third quarter financial performance. We reported a net loss from continuing operations of $2 million or $0.10 per diluted share, including $17.5 million of insurance proceeds. Net sales were $385 million, with shipments down 1% and a 4% decline in pricing compared with the prior year. Adjusted EBITDA was $24 million towards the midpoint of our guidance range of $20 million to $30 million. As Arsen mentioned earlier, operational disruptions at Augusta were mostly offset by a representation and warranty insurance reimbursement received in 2026. SG&A was at 5.2% of net sales, down from 6.2% in the third quarter of 2025, reflecting our continued focus on cost discipline. Year-to-date, we reduced net debt by $56 million, supported by $29 million in cash tax refunds, $50 million in insurance proceeds and working capital initiatives.

Let me now provide a brief update on our debt refinancing. We closed the transaction in September with our partners in the Farm Credit System. The transaction extends our maturity profile to 2031 and reduces refinancing risk, simplifies our capital structure, provides us with adequate liquidity and establishes a stable foundation to execute our long-term strategy. We used proceeds from a new $275 million term loan to redeem our 2020 notes, which were redeemed on October 3. We also replaced both the ABL and term revolver with a new $200 million revolving facility, with $15 million outstanding at quarter end. The revolver includes a $100 million accordion option that may be exercised after we file our 2027 Annual Report, subject to agreement from our Farm Credit partners.

Pricing is determined by a tiered gross leverage framework measured quarterly. As of the third quarter, our effective interest rate was 8.25% with a fixed base rate for a 1-year term.

Let me also provide an update on our recovery efforts related to representation and warranty insurance. We received a fourth and final settlement payment of $17.5 million in Q3. Year-to-date, we have recovered nearly $50 million, bringing total recoveries since the fourth quarter of 2025 to $73 million against the $105 million policy limit.

Turning to input cost inflation and tariffs. We continue to face higher cost and transportation and chemicals driven by the conflict in the Middle East. Oil-derived chemicals, particularly polyethylene have experienced increased price volatility. Transportation and wood costs have also been affected by significantly higher diesel prices. In the third quarter, we incurred approximately $12 million in higher costs related to the conflict versus last year. We expect these costs to increase by another $1 million to $2 million in the fourth quarter and continue into 2027. Our total impact from the conflict is approaching $30 million this year.

As we look at today [indiscernible] tariffs, we ship approximately 50,000 to 60,000 tons of paperboard into Canada annually. We also procure some of our inputs from Canada, particularly chemicals. At this point, both our imports and exports are largely exempt from various tariffs.

Turning now to our outlook. For the fourth quarter, we expect adjusted EBITDA of $10 million to $20 million. We expect paperboard shipments and production to decline sequentially with normal seasonality and continued operational challenges at our Augusta mill in October. We expect our announced price increases to contribute $8 million to $12 million in the quarter sequentially. Our planned major maintenance outage at Cypress Bend is expected to result in direct expenses of $5 million to $7 million. Finally, we expect roughly $4 million of seasonal energy cost increases and [ $1 million to $2 million ] in incremental conflict-related costs, primarily in transportation and wood.

For the full year 2026, our assumptions include revenue of roughly $1.5 billion -- flat to slightly higher shipment volumes. We continue to expect approximately $70 million of carryover pricing pressure from 2025 price decreases, partially offset by $15 million to $20 million of benefit from the July and August price increases. Our productivity and restructuring efforts are expected to mostly offset higher cost including a full year conflict-related impact of $28 million to $32 million. We expect direct major maintenance outage costs of $27 million to $29 million this year, driven by Lewiston and Cypress Bend. Augusta's annual outage is now planned for January of 2021, with direct costs estimated at $12 million to $15 million. We will likely need to have an additional outage in Augusta in the second or third quarter of 2027 at a cost of $7 million to $10 million to complete necessary work.

In addition to the Augusta outage in January, Lewiston [indiscernible] is scheduled for Q2 of 2027, while Cypress Bend is scheduled for Q4 of 2027.

In terms of cash flows, we now expect to finish the year generating positive free cash flows. This is due to a combination of positive EBITDA, $50 million in insurance recoveries, $25 million to $30 million reduction in net working capital and tax refunds. Offsetting that are capital expenditures, which we are now projected to be in the $55 million to $60 million range for the year. SG&A expected to be well below our target range of 6% to 7% of net sales as we continue to focus on managing our cost structure.

Let me now turn the call over to Arsen for closing remarks.

Arsen Kitch

Thank you, Sherri. Let me close with a few thoughts on where we stand today. We have successfully refinanced our debt with our long-term partners in the Farm Credit System, establishing a strong foundation as we navigate challenging industry conditions and execute our strategy. We have continued our focus on managing costs and have been able to largely offset some of the cost headwinds that we faced this year. We're implementing our second announced price increase and are close to launching a new CUK product line. We remain confident that the industry cycle will recover. We will return to our cross-cycle target of adjusted EBITDA margins of 13% to 14% with more than $100 million of annual free cash flow.

Let me wrap up our remarks with an organizational announcement that was included in today's filing. Sherri will be leaving us in a few weeks for a new opportunity. She joined us more than 3 years ago and has been an important part of our journey. She played a key role in our strategic transformation in 2024, including securing financing for our Augusta transaction as well as in refinancing our debt last quarter. Sherri has also led the finance function through significant changes and helped us achieve our cost reduction targets over the last few years. On behalf of our Board and the rest of our organization, I would like to thank Sherri for her contributions and wish her nothing but the best in this next chapter for...

Sherri Baker

Thank you, Arsen. I want to thank everyone at Clearwater for the opportunity to be part of this organization over the past 3 years. I feel very fortunate to have worked alongside such a talented team of Clearwater enters its next chapter. My new opportunity will bring me back to my home state of Texas, both to family and friends, and I am grateful for this opportunity. I remain confident in Clearwater's ability to execute a strategy for growth and value creation, and I look forward to following the company's progress in the years ahead. Thank you for the opportunity to be part of journey.

Thank you, everyone, for joining us today. Operator, please open the line for questions.

Operator

[Operator Instructions] Your first question comes from the line of Sean Steuart with TD Cowen.

Let's move to the next caller. Your next call comes from the line of Mike Roxland with Truist Securities.

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Michael Roxland

Sherri, wishing you the best of luck in your new role.

Sherri Baker

Thank you, Mike.

Michael Roxland

Arsen, my first question is you mentioned CUK adding tons by end of the year, somewhere in the range of 50,000 to 100,000 tons. I mean how big do you expect to CUK to ultimately be for you? And what's the timing in terms of trying to achieve that?

Arsen Kitch

Good question. Thanks, Mike. So as we mentioned previously, CUK is going to go into our Cypress Bend facility. If you recall, we've reduced production across our system, particularly in Cypress Bend. So this will help us fill out the Cypress Bend mill and it will become a swing mill for us between SBS and CUK. Until we launch the product, and we're in the market, it's hard to tell what the ramp is going to look like and what ultimately we're going to sell. But reception so far has been very positive. And I think independent converters are looking forward to having an independent -- a third independent supplier in the space offering the CUK.

Michael Roxland

Got it. Okay. In terms of CRB, obviously, it sounds like you made some headway there in terms of new partnership. What are you seeing with respect to CRB demand the weakness there? And at what price spread to SBS do you think the weakness in CRB could normalize?

Arsen Kitch

Yes, it's a good question. So we've started working with our customers and trialing the product. We think the independent market is in that few hundred thousand ton range in CRB. So kind of remains to be seen how big that business becomes for us. Meaning it's important to note this was a no capital solution where we're essentially private labeling green papers, CRB and offering our services along with it. I don't want to comment on pricing and spreads at this point between CRB and SBS. What I would tell you is on a per square foot basis. SBS has been more attractive than CRB because it takes a heavier weight CRB to replicate the performance of SBS customers typically buy by area, not by weight, which is why I think SBS has been competitive and which is why I think you've seen SBS growth here this year while the other substrates have been flat or declining.

Michael Roxland

Got it. And one just quickly, you mentioned with respect to Augusta that RWI issues that you incurred were due to reports that were not available, that were maybe you were most led on when you -- for the purchase. Can you comment on what those reps and warranties were as it relates to the electrical issues you experienced in the quarter and post quarter end? And then second question is for Sherri, how much debt do you currently have outstanding? Is it -- and then really how much interest expense should we expect on an annual basis?

Arsen Kitch

All right. Let me start with RWI. So we borrowed WI as part of the Augusta acquisition. So the limit on the policy is about $105 million. During an M&A process, the seller makes representations and warranties on assets on customer contracts and so on and forth. So as we -- after we acquired Augusta, it became clear to us that some of those representations and warranties work either incomplete or inaccurate and they deal with both customer agreements, commercial agreements, as well as assets. So in Q3, the events that occurred, the failures that occurred we were able to allocate $9.5 million of our RWI recoveries to offset the losses that we experienced in Q3 from the operational disruptions.

Sherri Baker

And then to answer your question on interest. So you should expect probably in the range of, call it, $25 million on an annual basis, you'll see something smaller than that in '26 just because of the lower interest rates that we had on the notes for the predominant amount of the year. But as you think about going forward, I'd probably use an estimate in the range of $25 million.

Operator

Your next question comes from the line of Sean Steuart with TD Cowen.

Sean Steuart

Apologies for the technical problems beforehand. Congratulations, Sherri, best wishes going forward. I want to start with what's the CapEx plans. So $55 million to $60 million this year, it sounds like on the capital side, you would plan to spend more next year for Augusta. Maybe confirm that's the case? And if not, you guys have talked about $70 million to $80 million being normalized maintenance level. How long can you spend under that level before you're worried about as those other productivity issues creeping into the mix for the company?

Arsen Kitch

Sean, I think part of the $55 million to $60 million this year versus our original estimate is pushing out the Augusta outage into 2027. A lot of work -- capital work takes place during those outages. I think delaying the outage pushed some capital into 2027. So we'll spend that capital in 2027. At this point, we're not going to forecast or project capital into next year, but it will certainly be higher than this year, whether it's higher than the $70 million to $80 million that we said we'd spend across the cycle remains to be seen. But we do think there will be some additional investments in Augusta next year to take care of some of the liabilities that we've uncovered. Just don't know exactly what that's going to be yet.

Sean Steuart

Okay. And then you connected some of the dots on the maintenance schedule for next year. Is there any guide? I think we have the quarterly cadence down. But overall, maintenance expense guide for next year? Can you connect some of the dots for that number?

Arsen Kitch

Yes. Yes. So I think we said Augusta will be $12 million to $15 million in Q1 and another $7 million to $10 million Q2 or Q3. So that's somewhere in the low $20 million range, low to mid-20s in Augusta. Lewiston, I mean, I think there'll probably be something similar to what we spent this year, which was somewhere in that low $20 million range. And Cypress Bend will be -- I think we're spending $6 million, maybe it will be a little bit higher next year, maybe $7 million or $8 million. But I would expect we're probably somewhere in the $50-ish million range for next year.

Sean Steuart

Okay. And then, Sherri, just on the interest expense question again. I think you said $25 million for this year. And I think you said similar next year, and I'm hoping you can square that up. I think with the [indiscernible] and being based off the SOFR rate, it looked like the effect of interest expense is going to be up a few points. Maybe if you can reconcile the comments you made before on expected interest expense next year.

Sherri Baker

Yes. The $25 million that I was referring to is on a go-forward basis. So that would be more of the expectation for next year. This year, we'll be closer to probably around $20 million, just because we have the lower interest rate on the notes for the predominant amount of the year. But going forward, I would expect something close to $25 million.

Operator

Your next question comes from the line of George Staphos with Bank of America.

George Staphos

Thanks for the detail. Sherri, best of luck and congratulations. I wanted to talk about Augusta, again, can you reference whether you have any other recourse at this juncture, Arsen and Sherri, in terms of Augusta and how it's performed relative to what you thought you'd be getting? Do you have any other ability to get remuneration? Or is it at this juncture you need to spend capital to get the mill to where you want it to be?

Arsen Kitch

Yes. So George, we're done with the RWI policy. So we recovered $73 million on $105 million policy limit. I think your question is, do we have any other recourse? I think the right answer here is, we'll review all of our facts and all of our options related to the acquisition, but we won't be able to provide any additional details at this time.

George Staphos

Okay. Understand. Recognizing that the goal is to with the maintenance and with the capital you're going to put into Augusta to get it back to where you thought it would be. Can you give us some way of dimensionalizing what the EBITDA contribution from Augusta is in its current state relative to what you thought you were getting. In other words, is EBITDA, $10 million lower, $5 million lower or $20 million lower. Is there a way to have us think through what the variances at this juncture, recognizing it's going to get better.

Arsen Kitch

Yes. So George, the right way to think about it is the biggest gap in Augusta EBITDA performance is the price changes that we've seen since early 2024. So our acquisition -- in our acquisition, we believe we got $100 million worth of EBITDA in about 400-somewhat thousand tons, if I recall correctly. Since then, pricing has decreased, and I'm rounding here by a couple of hundred dollars a ton. So as you may imagine, that has a very substantial impact on the P&L. I think that's been the biggest delta versus what we expected. We have achieved our supply chain synergies. We have loaded up the mill with volume. We're making good progress on our large strategic customer in Augusta, but we've got to work through some of these asset and performance issues. I would say the mill is probably performing somewhere in the 10% to 15% below what it needs to from a production standpoint right now across the last several quarters. So we have to get that back into a normal -- kind of a normal production capability for us to be able to achieve those that EBITDA. I think in the long run, once the market recovers and we get Augusta back to normal, I think we'll be at that $150 million EBITDA contribution.

George Staphos

Okay. I was not including the pricing change because the pricing change is driven by the market, not by the mill's performance or lack of performance. So you would say 10% to 15% times 400,000 tons times some margin per ton would give us a reasonable estimate. Would that be, I don't know, $50 million, would you say, in terms of the performance you could get back if you just get the mill running the way it should be running?

Arsen Kitch

Yes. I think 10% to 15% is based off of capacity of 600,000 tons. So yes, I think you can apply the variable contribution margin to that kind of to dimensionalize what the upside is. We think we'll get there. It's just going to require more than we originally expected.

George Staphos

Of course. I just want to try 2 more questions, I'll turn it over. One on pricing and then one on -- as Sean was getting at maintenance. If I take the latter, if the maintenance negative variance $27 million versus $26 million. Would it be sort of basically what you're spending on Augusta incrementally, like $15 million in terms of if we're doing a waterfall to $27 million, would that be fair? Or am I missing something there?

Arsen Kitch

No, it's almost entirely Augusta. And then we really didn't have a -- yes.

George Staphos

Okay. That's fair. And then Arsen and Sherri on pricing, so holding the second price hike in advance right now because I don't think the trade pubs picked it up yet. Correct me if I'm wrong. On what's been recognized how much incremental pricing would you get in '27 versus '26? And then if you do get the second increase reflected, I know timing will have a little bit of an effect here, but let's say, sometime in the fourth quarter, how much incremental would you get on top of that given normal timing lags into '27?

Arsen Kitch

George, you're making me do math, but let me try it. So what we said is this year, that first price increase should deliver $15 million, $20 million of upside. And we said that full price increase is worth about $70 million on an annualized basis. So for next year, I would say this first price increase should deliver another $50 million, $55 million of upside. The second price increase, we're implementing, I think we're making good progress. Whether RISI reflects it or not, that's up to RISI. But let's just assume that price increase is fully implemented and recognized by RISI by year-end. It takes us a couple of quarters to roll through those prices into to our customers based on agreements. So if you get, let's just say 1/2 or 2/3 of that second price increase, that would be another $30 million, $40 million next year of additional pricing benefit, if that second price increase is fully recognized.

Operator

Your next question comes from the line of Matthew McKellar with RBC Capital Markets.

Matthew McKellar

Congratulations, Sherri, best of luck to you in your new role. Just wanted to follow up on the CUK production at Cypress Bend and confirm, are you intending to restart that second line at Cypress Bend as CUK volumes pick up maybe in early '27? Or would you intend to run those volumes on the line that's operating today for some period of time? And if so, how should we think about what that does from a mix perspective at Cypress Bend?

Arsen Kitch

Good question. So Matt, just a small clarification. We have one paper machine in Cypress Bend. So our intent is to create swing capacity and to campaign the machine between the 2 grades. If we get into that 20%, 30% of demand, addressable demand, you're probably in the 50,000 to 100,000 ton range. We would just fit it in on our schedules in Cypress Bend and that machine would run SBS and the campaign and swing to CUK. Our goal is to get that mill 100% utilized to 300-some-odd thousand tons of its on capacity.

Matthew McKellar

Okay. Great. And then just quickly wanted to touch on SG&A as well. It seems like your run rate there has been pretty favorable compared to where expectations were. Is that a pretty sustainable run rate here for the next few quarters? Or anything we should be thinking about that develops from here just in the near term.

Arsen Kitch

I think it's pretty sustainable. I think we've been very cost focused. Setting aside any kind of cost of living changes or incentive compensation changes, I think this is a fairly sustainable SG&A cost structure for the time being.

Operator

We have one more question from George Staphos.

George Staphos

Just a quick question further on Cypress Bend. So what did you find that you could do in terms of the second version of the CUK implementation as opposed to going with the -- in the less costly version versus I think, Arsen, so it said would be a $60 million project if you had the full ability to swing? What was it that you found? And what will you be able to do? And what won't you be able to do when Cypress Bend is up and running with that capability?

Arsen Kitch

Yes. So let me tell you what I think we'll be able to do is we'll be able to deliver a very high-quality CUK product that matches up to what the 2 largest players in the space are providing. So we -- and that's our goal. That's what we want to launch into the market. The trade-off between the full $60 million project and what we are doing is going to be around speed as well as total available capacity at the mill. The $60 million solution would enable the mill to run on CUK at its current speeds with this much smaller capital investment, I think we'll be more limited in terms of speed and as well as potentially have some higher costs associated with the product that we make.

That being said, I think the trade-off is worth it, especially as we're launching a new product line. And it helps us fill out some open capacity we have at the mill, which price -- if you do the analysis on variable contribution margin makes it very, very attractive.

Operator

We have now reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.