Clearwater Paper (CLW) risk factors, FY2024 10-K

Other

1. 01We may not realize the expected benefits of the acquisition of the Augusta Facility because of integration difficulties or other challenges
2. 02The Tissue Divestiture may disrupt our remaining business or not achieve its intended benefits
3. 03We may not realize some or all of the anticipated benefits from the Tissue Divestiture with respect to the anticipated
4. 04We may incur significant costs or be unable to realize the expected benefits and long-term savings associated with our restructuring initiatives
5. 05Following the Tissue Divestiture, we share certain facilities in Lewiston, Idaho with Sofidel and we are required to provide certain services to Sofidel related to such shared facilities. Our relationship with Sofidel may impact our ability to conduct business at our Lewiston mill solely for our benefit
6. 06The Tissue Divestiture changes our exposure to other risks and uncertainties

RISKS RELATED TO OUR BUSINESS OPERATIONS AND THE MARKETS IN WHICH WE OPERATE

1. 07Difficult industry and market conditions may adversely affect the operating results and cash flows of our business
2. 08The loss of, or a significant reduction in, orders from, or changes in prices in regard to, any of our large customers could adversely affect our operating results and financial condition
3. 09Increases in paperboard supply could adversely affect our operating results and financial condition
4. 10Substitution amongst paperboard grades could have an adverse effect on our financial results
5. 11Consolidation in the North American paperboard and converting industry may adversely affect our business
6. 12Our products are vulnerable to declines in demand due to a shift in consumer preference for competing, sustainable materials which may have an adverse effect on our business
7. 13Cyclical industry conditions have in the past affected and may continue to adversely affect the operating results and cash flows of our business
8. 14We incur significant expenses to maintain our manufacturing equipment and any interruption in the operations of our facilities may harm our operating performance
9. 15We depend on external sources of wood fiber which exposes our business and results of operations to potentially significant supply and price fluctuations
10. 16The primary source for wood fiber is timber, the availability of which may be limited by adverse weather, fire, insect infestation, disease, ice storms, windstorms, flooding and other natural and man-made causes, thereby reducing supply and increasing prices
11. 17The cost and availability of chemicals and energy needed for our manufacturing processes significantly affects our results of operations and cash flows
12. 18Disruptions in transportation services or increases in our freight costs could have a material adverse effect on our business
13. 19The markets for our products are highly competitive, and companies that have substantially greater financial resources compete with us in each market. Some of our competitors have advantages over us, including lower raw material and labor costs and better access to the inputs of our products
14. 20Our business and financial performance may be harmed by future labor disruptions
15. 21products and our operations
16. 22We rely on information technology in critical areas of our operations, and a disruption relating to such technology could harm our financial condition
17. 23We face cyber-security risks
18. 24We are subject to significant environmental regulation and environmental compliance expenditures, which could increase our costs and subject us to liabilities
19. 25We may be subject to operational and financial climate change risks
20. 26Our operations require substantial capital and our capital expenditures may not achieve the desired outcomes or may be achieved at a higher cost than anticipated
21. 27We may face demand, supply, and operational challenges associated with effects of a disease outbreak, including epidemics, pandemics, or similar widespread public health concerns
22. 28We are exposed to lawsuits, governmental investigations and proceedings relating to current and historical operations and products, which could harm our business
23. 29We could be subject to changes in tax rates, the adoption of new tax laws or interpretations, or exposure to additional tax liabilities
24. 30If we are unable to continue to implement our business plan and strategic initiatives, our financial condition and operating results could be materially affected

RISKS RELATED TO OUR EMPLOYEE PLANS

1. 31We may be required to pay material amounts to multiemployer pension plans; our participation subjects us to potential liabilities, which could be significant, if we withdraw from a plan in the future
2. 32As we currently have no plans to withdraw from PIUMPF, we have not recognized any liability associated with a withdrawal from PIUMPF in our consolidated financial statements
3. 33Our pension and health care costs are subject to numerous factors that could cause these costs to change

RISKS RELATED TO OUR INDEBTEDNESS

1. 34Despite our current indebtedness levels, we may still incur significant additional indebtedness. Incurring more indebtedness could increase the risks associated with our substantial indebtedness
2. 35If we default under our Credit Agreements, or other indebtedness, we may not be able to service our debt obligations
3. 36To service our existing and future indebtedness, we must generate cash flows. Our ability to generate cash depends on many factors beyond our control, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
4. 37Our Credit Agreements contain various covenants that limit our discretion in the operation of our business
5. 38Our failure to comply with the covenants contained in our Credit Agreements or the indenture governing our outstanding notes, including as a result of events beyond our control, could result in an event of default that could cause repayment of the debt to be accelerated
6. 39Credit rating downgrades could increase our borrowing costs or otherwise adversely affect us
7. 40An increase in interest rates could have a negative effect on our business

GENERAL RISK

1. 41United States and global economic conditions could have adverse effects on the demand for our products and financial results
2. 42Recent fluctuations in economic conditions and cycles may have adverse effects on our financial results
3. 43We may fail to attract, motivate, train and retain qualified personnel, including key personnel
4. 44experience declining sales, manufacturing delays or other inefficiencies, increased recruiting, training and relocation costs and other difficulties, which may negatively impact our results of operations, cash flows and financial condition
5. 45Certain provisions of our certificate of incorporation and bylaws and Delaware law may make it difficult for stockholders to change the composition of our Board of Directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial