SPOKANE, Wash. (From news reports) -- Clearwater Paper lost $53 million in its third quarter of this year, mostly due to what the company describes as an "accounting exercise."

Included in the $53 million was a $45 million "non-cash impairment of goodwill," according to a Tuesday news release from Clearwater Paper reporting the financial results for July, August and September.

The "non-cash impairment of goodwill" involves last year's sale of Clearwater Paper's tissue operations to Sofidel America Corp. for $1.06 billion, said Virginia Aulin, vice president of public affairs for Clearwater Paper.

"This is an accounting exercise," Aulin said in an email. "Our stock price (market value of Clearwater Paper) has dropped, and, given the sale of tissue, our book value has increased. ... The increase in book value was driven by our almost ($300 million) gain on the sale of (the) tissue division."

The loss for this year's third quarter compares with a net income of $6 million for the same time last year, according to the news release.

In the first nine months of this year, Clearwater Paper had a loss of $56.9 million compared with a loss of $2.8 million for the same time last year, according to the news release.

Solid bleached board, the type of paperboard that Clearwater Paper manufactures, continues to be in an oversupplied position, Clearwater Paper President and CEO Arsen Kitch said in the news release.

The company believes that trend "is also impacting the broader consumer paperboard market," Kitch said.

"While we remain optimistic about a recovery, we are focused on what is within our control, namely reducing our fixed costs and maintaining our market share," he said. "We believe our high quality assets are well positioned to generate significant cash flows and strong returns on capital in the long run."

One of the challenges is that Clearwater Paper believes a competitor is continuing to ramp up capacity, which may add as much as 10% of additional supply to the industry, Kitch said in a conference call Tuesday for stock market analysts.

Absent other changes, that level of new capacity would result in utilization rates in the low 80% range by the end of the year, he said.

That would be well below "the normalized cross cycle average" of 90% to 95%, "and would result in supply exceeding demand by more than 500,000 tons" per year, Kitch said.

"These low utilization rates have led to margin pressure, resulting in returns that can't support investments into our capital-intensive industry," he said. "This is simply not a sustainable position to be in for the industry, which is why we believe that the industry will rebalance supply with demand in the medium- to long-term."

The rebalancing could happen in a number of ways such as companies reducing production, Kitch said.

Resource Information Systems, a provider of market data for the global forest products industry, Kitch said, is predicting an approximately 350,000 ton net capacity reduction per year in the first half of 2026.

Clearwater Paper has no plans to reduce its production, Aulin said, adding that "we do balance our supply and demand and do, on occasion, take strategic downtime."

Clearwater Paper's annual paperboard capacity is 1.42 million tons, including 480,000 tons in Lewiston, Aulin said.

Tariffs and a weakening dollar could put pressure on the price of more than 700,000 tons of annual solid bleached board imports into the United States, "encouraging customers to seek domestic suppliers," Kitch said.

Another possibility could involve companies making changes to use capacity to produce other kinds of paperboard, he said.

That's something Clearwater Paper has explored at Cypress Bend in Arkansas, but at this time has put the plans on hold, Kitch said.

The company has nearly completed the engineering work on swing capability for about 100,000 tons per year or about one-third of its Cypress Bend production for coated unbleached kraft paperboard, he said.

The estimated capital investment for the project would be about $50 million, Kitch said.

"It would take more than two years for us to deliver cash flow from this project, which means we'd have to finance it through debt," Kitch said. "And right now, we need to prioritize maintaining a strong balance sheet and focusing on running our (solid bleached board) mills and defending our market share."