VRS - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Verso Corporation Second Quarter 2018 Earnings Conference Call. [Operator Instructions]. Please note, this conference is being recorded. A replay of this call will be available on the Investors page of Verso's website at 11:00 a.m. Eastern Time today. like and the Landman. Chief I Verso over time, President Vice Accounting this to presentation turn to At Officer, Clint go ahead. Please

Clint Landman

Thank morning. good you, and

The refer release Investor website as Corporation as the on for before financial the slides Relations market the well second at that call of this available we'll the earnings Verso's announced during www.versoco.com. morning Verso The open. set quarter XXXX to of were results are

Officer; will Graphic Executive forward-looking Campbell, today materially and may statements. remind certain are assumptions and would course should we be Chris or these President to order more call, the risks Joining Chief or prove Senior better making like statements of results in expectations. me Should subject on and or incorrect, in understanding Chief These vary one Vice or risks underlying from to the call estimates Mike DiSantis, uncertainties. Weinhold, Papers. to Allen management's of Financial our you forward-looking Officer; give the are materialize that President of everyone uncertainties of I performance, a actual

to SEC on DiSantis. our Investor information you uncertainties which with If various Chris to this time, business, At filings, tab. the our posted the over risks please hand further the are website, presentation associated versoco.com, refer the and would regarding like under will I

Christopher DiSantis

Thanks everyone. welcome, and

We have a lot today. news of report good to

overview. Page market Slide to flipping current I'm So

markets we're the So pricing upward in Graphic seeing continued through the momentum second quarter. all Paper

the side successive system X structural multiple to all our benefit million-ton Papers. have grades The increases the across Graphic had supply in continue year-to-date. We

with continues to the demand. On the side, see erosion we in demand

your in the right. I'll see attention of in the bottom numbers the chart on that particular. to can couple You call

One X.X%. is printing, down commercial of them

The X.X%. catalog down other is

it's down XX% note macroeconomic versus revenue. but which of about, prior the Specialty paper thinking ones important is year, [indiscernible] continue to business that's to two to you're our are indicators significantly as strong. think down industry dynamics more those are tied good I XX.X% Verso's be

tightened demand. conversions due covered is contamination restrictions demand position. in continues to market So got strong China to remain that supply is that has with We with expanded coupled strong there paper. market pulp low capacity very waste Specialty Pulp worldwide growth. a thresholds very good. for Severe robust. The Market

generally seen groundwood, rate Additional X-point half to The up going operating a growing trade XX%. industry demand relationships on up globally exports is to operating changes XXX%. Depending impact happens at speaking, quarter ended the going rate operating X-point in tariffs, $X.XX. XX% from the significantly Coated what a of improvement we've is to XX% in euro freesheet second could from Coated XXXX. we've the seen certainly The for. is there. improvement, first versus agreements U.S. rates

coated domestic product continue the see share One up in gaining metrics coated We see the to groundwood [X.X]%. coated a is is the papers, lower imports XX%. to groundwood groundwood Verso. imports especially you Coated in note that's declining important thing up can imports that right

X coated that paper than it million of ton XX% groundwood. on system So numbers is Verso give you some total less

Turning highlights. the quarter page, second

of $XX year-to-date, Some EBITDA Sales do EBITDA of six really 'XX. got significant are through a cost price The spending on to mix. contributing over mix. Specialty six months second up of XX% slide that's XXXX quarter is maintenance XX%, production XXXX, and EBITDA, quarter in significantly to second I first versus increase We've XXXX. up EBITDA second cost the Adjusted sales at of the the both year-to-date operations look productivity, and good that: business numbers XXXX. XXX%. up of approved maintenance sales the of despite of revenue factors price And specialty up good quarter Lot first We've grown million. XX% the for months that. if of in Volume,

a year. Quinnesec planned this cycle X-year have outage. outage Mill We It's

perfectly every be to clear, Just that's once two years.

We have on-time, that completed outage on-budget.

So $X 'XX. Net for Inflation several second mill. to versus Wisconsin and to impact the mill continue with a potential executed costs of costs freight that of second and identified are regard are issues the Plan $X to infrastructure [ph] material million freight XXXX. of up quarter results. Rapids quarter input the and million incrementally, particularly costs raw outage $X respectively, up million, expense of electrical

production We Mill Androscoggin number have three paper in started machine.

under producing net We right in guidance. our The now. $XX on roughly the inflicted settlement Subsequent will the number versus of first drove quarter achieved The a was in from being countervailing qualification We second the work quarter. end in duties. are $XX orders during million quarter not XXXX. to be of million We That of subsequent down so debt the end successfully voluntary in capital June, a the on to CapEx $XX annual Canadian the this investments revolver. liquidity July, of - on the June, made we target. term funded million the loan available supercalendered end payment

identified of money We agreement second yet to so of of of none these through by in in been end far expect numbers. even, not year the collect $XX has quarter million the any the it's that collected the that of so full amount collected

economic firm in first The year season. We're going the bottom position momentum better and going Paper space. business strategy a back half at and than building So some flipping maintain first earnings the you're highlights lot to of for is going a had both Graphic line, turnaround here and solid our we're Verso. off year the American North is certainly of strong the half the of into a there better is cash to the the supplier be part process slide. As Strategy a building to business flow page,

to allow and business grow conversion we're to erosion select doing us to in at continue as at packaging to that's looking going we're advantage as also the that and production quickly All leader What market businesses opportunities. affect remain anticipated the and going have is number organically we well segment. high-value we're We're for service Graphic an that in in specialty our can We through will position. We're and those increase Market one cost that lines the looking we that Paper to break projects, offset various Application. business. within intend

treadmill problem on many for the erosion X XXX,XXX to So we business Graphic tons have treadmill annual of tons That's the X% XX,XXX million in quantify you million effect, effect solve this ton X.X here. the Grades, about X% to year. tons, X.X of have this notion I Private talked to past, filling the whole that for in to graphic system, just the for terms million times

other Some on grades coated the more good side Specialty across one progress highlights specific and entire system. Specialty. Very

and make machines July. folks and very number as of Specialty late in everywhere. was and businesses we on Androscoggin there, our those Specialty are high It's activity So successfully started today, Mill been and all both to Specialty two X a X to are almost machine level three Jay, Stevens Maine, But Point three now package. mills The X Androscoggin at machines.

very to rate at end XXX,XXX XX of We a the in typical to tons XX year produce will by year be be some product ton the of there. per product XX.X rate run expected

not the cost million be number We about is number three qualification expect have out qualification put $XX $XX.X the. previously than was XX in about conversion of We The of more highly to expected with process The interested we do million. capital. customers.

note important paper on where on like start Other million up machine demand. training advanced number close start-up be of to a see. onetime out. thing capital pretty to and $XX of sort costs. $XX So million in we thought offset that, project approved costs also for costs X-phase thing would million technology increase And We've got one come grand capacity four by that will the in be for. other $X the a there We that

machine that's completed first project embarked again five this CapEx phase to be areas increased in experiencing dollars going product, are our on annual on growth capacity We've that there the is already approved CapEx The We've of. project. The Focus we're a in paper year. reflected that guidance in number on forward. number. machine expected

believe it's I And of sales So assessment industry, there the that assessment monitor. the of we're out industry-leading ratio. our to comparables SG&A industry-leading, our are when maintain what on to we going say based cost of

we're going So be to very low-cost SG&A standpoint from business.

capital last business. SG&A part efficient balance very to going be get sheet. after the a are on focus been We really minimize over half structure. cost a lot the working There's the year and of to We're going mill of the

us to meant we have arbitrage we the measures countermeasures of equation. the that the of there. lot continue And amount cover of to there a So on costs. still a be that Anti-inflationary mill are of for lot And is side really reduce will implement. to margin to maximize out

products on between do difference spread. So versus what our the our sell we for what and key we items spend

energy, people, cetera wood, et on spend chemical, those managing So categories. are logistics, ambitiously

also tight very manage for just some We going associated got fund the that pretty paper. substantial a of savings the to flexibility very to prior on got restrictive there year, We're loan the continue generation of pension interest term overhang covenants going to limited couple valuation. the on expensive one we cash end are the to and have it. from reduce reasons pension It's and some is restrictive just has internal eliminate the

do care We're going on position return know that very we allocation, company continue we to and to act pension much of owners think like about has So on every. owners impact risk-adjusted valuation capital that how like shareholders we We taking the and for working. an risk. and we're manage manage terms capital as how think in underfunded

continue shareholders. no strategic have we for report until We to we will evaluate otherwise alternatives updates

deck. to top. why was added will slide start it vehicle? I an Verso talk that about titled investment, And is why is to the value I from new This proposition. is Turning we thought a attractive important to investment slide

The and first is is the the. Packaging. There Specialty

record got a demonstrated grow have substantially. being business track a Specialty to able of We

is Packaging us concerned, As the for in nothing there business. far as upside Packaging is for

going the be Secondly would we're the to system see wide. appreciation price

they market system the vertically many not Vertical are price through you assets manage. is been increases of sell everything see are in of everywhere all results. that the those all very integrated. traction. to numbers So have And reflected integration world-class increases that particularly we yet in have grades, cost price important, announced, truly We the have quarters

that major losses some operating net tax flow liability provide significant and cash forward. our limit advantage have going We

position Xx We're of improving. net leverage. pension XXXX, $XXX down about the substantially to pension The back factors. balance of end year go going this be to of That's underfunded variety deleveraging. rapidly is million. end If position already is of is the company of sheet our the Our we by

investment. the Rapidly retired just is we soon. with the balance fundamentally know a the expect know cost, Cash business capital, optimality to the strong. generation how more permanently manage We gives know flow and to deleveraging term how We allocate to how us very drive risk sheet. lowers loan be we lot associated to

the generation six particularly XXXX season. Graphic flow especially cash And back good, to expect We going during Papers be months strong dynamics favorable. are into the of

our structural advantage. the changes So that working

We market are the leader.

business we for for a what is I full to And our have future. are the We success is and lastly we operating the that the rates highlight positioned have at company. want

group professionals Allen really they fun other. shareholders, So incredibly that, really our and got CFO, to with And of financial turn to about it and They for each results. more great of talk for work going we multi-taskers the to communities customers, be our to excellent around, the our harder, are our best over Campbell, they I'm here. intentions they're have

Allen Campbell

Thank Chris. you,

Page for value in the going went a propositions more to that Chris through to X, just detail. Turning highlight I'm little

driven Our favorable. momentum, balance earnings strong generation, have the we demand being by significant Papers flow and very supply Graphic cash

there. margin improving are We

Our industry-leading Specialty to we mix have grow. and SG&A continues structure our of we business. revenue an And for paper Packaging believe

days. cash also the We and We strides mix capital We've by spite changing we've business significantly deleveraging maintaining sheet. balance accounts of reducing been our in in our strong expanding seen inventory interest; have of our very therefore, and management by working our manageable made our receivables lower payable significant still CapEx, generation. flow days,

of expecting our loan reduced we case are July. trade $XX And second from million settlement. the in payments $XX million our We half Canadian in to term

As mentioned earlier, we position. Chris pension

of making that the If significant favorable you last reduce the be to accounting end of would recall, at discount we're to million rise other $XXX in year with just will million. We rates, our by year, liability believe under was of asset and contribution the expenses. range a $XXX returns the the in that also million and $XXX exploring end underfunding balance We're range this improvement. alternatives

yield. tax is available Another our important value proposition

forward carry which build with NOL limitation. additional to operating have able We're restricted without year, use million. of million $XX We million million. of at net a each will be losses least $XXX $XX to And $XXX accumulated we have the

next come our would of earnings us. of So positive $XX significant million for

our Page going to X, through to fill forward I'm key Moving some metrics. of

shipment prior year outages. emphasis to papers, because Specialty improved the XX,XXX On in from more significantly. but is during that's with we're volume of our down use up just machines and X,XXX of on side, up internally tons, Pulp

prices up paper, up $XX and XX% are ton from quarter quarter. second about Our selling on from $XX we're per of ton last XXXX

pulp, the up first a versus XX% $XX For we're year versus and quarter. prior ton

second the quarter. is business, during mix X% as growing mentioned down Chris this business Top or XX% to down we're $XX As also, million. of Specialty our you can to process right see, up proud the earlier, see inventory in shows

show Page XX, Moving forward our income statement. to we

income of net positive, for quarter million. is our sales First $XX the driven increase by note

on cost of purchase We're have also being favorable. notes sold wood cost pulp, see and as and a the us while and of to some inflation priced mix freight in ops right for we is energy seeing spending is products still You the chemicals. in recently

like to reported onetime SG&A These driven some with associated strategic increase cost and increased alternatives. costs were million X.X. $X Our as expenses by

standard in We of Interest lined XX adoption associated million by had net just year. lower noncash of million award up new also our We second. income accounting case a Chapter million the our expense a income increase a nonoperating a of $X reported in XXXX Operating obviously $X There this driven fees. of pension loan. expense. term expenses reduction is include periodic that's $X equity with

will $X.X earlier Moving some on start-up equity products in million restructuring. $X quarter Page the future a with costs year-over-year. our The seen multiple U.S. of with over the new we just up second down and of the highlight EBITDA. were net margin noncash had is our million three initiatives as then [ph] next and primarily are final improvement number machine program $X periods. the in payment that the of X.X%, paper EBITDA our forward We income we to are AX three our We drop very annual mentioned respectable for XX, adjustments in to it catch adjusted high that million. $XX are in launching an in page. Strategic at quarter Trusty you've a key [Indiscernible] our million past, awards ones

as had were have year-over-year. remaining higher Higher reduction $X comp the quarter $X $X same And It's positive can As We SG&A approval a downtime tough comp by second for XX volume with million $XX much. we costs see, year improvement major occurred as favorable that's We primarily profit. Chris $XX also. pages, Pension we high, we slightly. show volume the the is on driven million mentioned freight expense, still a driven major prior million carry a margin an walk X pricing in hit adjusted EBITDA, $X million a pulp, adjustments. outage slide swing. first and primarily why and doesn't at the increase increase We to costs you Operations decline minus lot this expenses maintenance, maintenance does saw mix running last $X this primarily earlier, every at And year-over-year. year-to-date. significant which in mentioned over Major year, of had is quarter year do that's as box necessarily are of there. second less major million you improvement down by down. our million by as million. Inflation, two-year driven year-over-year.

that is million. X.X XX.XX, year just period. were same over to top As the page you this X.X, we similar up right, see year X.X on margin across The where walk up X.XXX our Gross sales can last are quarter. the in from very the the

major million. You $XX is see the maintenance

by on year, Major and six As a adjustment the SG&A, year, We we on same year-over-year will favorable has money see driven as on months, like And spend pension. more rates told we before. you and maintenance right expect - Page primarily can you significant of the blue this half swings expect despite first show quarter $X running bar spending million did show that $XX spend that. we're to our spend be XX, outages. as for we Inflation we feel we the XXXX spending, to million and numbers this important it's on we impact $XX million last in year.

spent spend in - in first the quarter, expecting see first I'm we're second sorry, $XX the we half million million to million half. can $XX $XX you and As

us be from combination expectation. So than a for with $XX going the to in key performance lighter strong We're the second going million. to third is $XX million to maintenance drop our and for half quarter

below So $XX our We've in run. million how maintenance. they timing down major included a drop by

on net Moving of proud debt, payable at achievements the an $XXX $XXX we're on the our liquidity. of that debt June. net by we reduced We've show of area our on Very debt. top months, to reducing proud over million left, improving end On million XX very net Page last XX.

seasonal the X.XX, earlier, down as million, last Our of quarter. decline million reduced improved term excellent the as our an million. we loan the And $XX down the number in earlier, in mentioned We which paid is Liquidity in million. covenants the liquidity by of Reduced the their inflow better about go up $XX first lower in obviously June months quarter, earnings. were second as $XXX XX to $XX with half net net to leverage, second half. year cash $XXX last and we're in down in talked million that and cash expect we flow debt to second reduced the

optionally our we're risk the of rapidly and business. So we're we're increasing decreasing deleveraging,

guidance. Moving forward our to

in will quarter Pricing the million. $XXX to of million favorable $XXX For next to be be we're quarter, two. range expecting sales to

in We the $XX three expenditures expect And we to maintenance quarter over including business. second positive, we as Mill. be seasonal expect as pension the range, residual $XX part million net number expect a to of in substantially up range Androscoggin to earlier. be Cash million. investment pension of the the to million funding to million decrease we mentioned capital $XX funding for $XX Major the machine be that income in to quarter earnings

pricing full revenue should to prior and year, the be For year. favorable

of costs. of and $XX input strategic million, pension funding first freight of to and maintenance the SG&A the face last continued versus will million be income all $X Cash was industry up the approximately logistics being less and X%. primarily $XX state of trade be the million $XX half to $XX $XX half year this year. Capital see our maintain from this we million settlement And the to case that's net headwinds of range higher inclusive our will of than million, We prior second will substantially in end other year. $X year. to expecting in EBITDA expenditures, of and half we're taxes second Cash taxes. Mentioned will earlier, before projects. expect for our all structure Major and be leading million a the year. income than million

it So questions. our the formal that up presentation. We with part ends like to of that, open for

Operator

[Operator Instructions].

B. comes from question Van Sinderen FBR. first The Riley Jeff of

Jeffrey Van Sinderen

the on across metrics Congratulations really the and board. strong improvement

get capacity half. of any pretty sense, just, strong the you're in guess, I pricing contemplate growth sort maybe given guess, first just environment expecting you look know at also in touch maybe to or you second on can QX guys magnitude to of potential year. And there? much. of have in full I we the a terms lot half My trying give the second a running order and You then might half? can in on might question us a what last if rate the I of second the grow you're expense done for for range you

Christopher DiSantis

of of can that you in to year. tailwind range of Yes. lot contributed tell But the I all factors. guide specifically the positively can't No, just back I effect. there for the a is They're terms

will better, the be the And will the better. be expect pricing so better, revenue be will cash we flow

metrics. So better mean, almost, in I every

chose of we in at you the So the what And second of look half. the also half be half words to second to months first of year substantially the expect expect we 'XX, year But we if of substantially the describe are terms improvement numbers back better. typically. this six and

XXXX you substantially six back are in numbers, the months. months can see the first better six of year than As the

good stuff opportunities, So of we of tailwinds, a a along. of lot of have lot a a lot execute important lot

not will better. give ready specific we're significantly to be us So range a

Jeffrey Van Sinderen

to mentioned operating Okay. that costs then your is turning And Fair an enough. area [indiscernible]. you just

I Just what there us there quarters? any more you're the color cuts the that focus you several about, are, kind can of thinking cost is give opportunities where over on guess next

Christopher DiSantis

in I the short-term, buy. easy environment increases. we the acquire to everywhere everything efficiently it and getting and of for inflationary kind attempted We're more use past price answer trying an So mean, that especially is we're

In a are get to big cost, costs. those projects. terms different mill There's after lot mill of of ways

get after mill tons. best One to the more to produce ways per costs is ton, mill costs, of particularly

So - higher-fixed businesses, your can fixed-cost you really lower lower really can ton by your cost per throughput. you lowering they're

of business looking break very to well. on at So the throughput side Specialty bottlenecks grow of there terms how lot a to that bottlenecks. projects that Break in we're are looking

pulp we the So can produce, make. of we're bottleneck the projects we the looking at there. up more money whole speed kind Pulp, more that

looking our projects So ability debottleneck at to pulp. we're produce to

money be sell for our pulp outside us saves So that market as we position. We're either will a pulp sold-out money internally in the us saves that on well. produced can

is only more to money So can be And graphic then it. side can make we you utilization of produce we'll as make able and that more product well. there there more expect

we're a we consume resources these, mill. looking lot all in of as at So

new. projects all at this we're all lot is a like shouldn't the we're is, these say at looking is looking always this there something I We're this costs. our And As of mill turning things, time. looking we're potential

improvement in mills. after program excellence operational world-class a that's continuous constantly have going We

to on So that. continue focus just to we're going

still how lot effect there, So but that just that a there. trade quarters there's next note get nothing a to few specific

Jeffrey Van Sinderen

me just to was put just great. million Okay, for AX, versus expectation? clarify And additional prior in that then more you $X one on it

Christopher DiSantis

Yes.

think budget We $XX million. around like million the in like I came $XX.X something original was that. at

with investment and finished we are. first phase the then So this capital of they

numbers on to You're we the going that $XX collect comes see future the as going to as the see the in when that you [$XX] from number. million off million see that

Jeffrey Van Sinderen

Okay. up you And then need? and you're running, how pretty at you're producing is so AX this point, and that it's orders confident are you running, the quality that

Christopher DiSantis

Yes. I saw those on physically myself locations.

So it's.

Operator

from The Khorsand Financial. next with question comes BWS Hamed

Hamed Khorsand

of Could first talk come of free was you million July, working in about the cash off that quarter? $XX source improvements from flow the paydown capital mainly does that the or

Christopher DiSantis

lot constantly a have that balance just capital, chasing flow. We've sheet, under we're constantly availability down and the we liquidity the cash the been chasing confidently working improving revolver our So chasing earnings paying of drive by debt.

there plenty and also will kind happen not more reduce credit we loan it of is to revolver be the eliminating by just doing of available. because that letters some We term

Hamed Khorsand

well? And just a QX. and you expect half clarify EBITDA improve, standpoint as you're then guys also concerned? your done higher as margins what the EBITDA you in far about second talking is EBITDA Can that also Should Okay. we so dollar to just have given from given as looking far being out into

Christopher DiSantis

It would be reasonable.

think that's closure. a I reasonable

Hamed Khorsand

gradual be full you running or a what machine Would just the capacity of And a it QX? then is expecting contribution it three from increase? comes it kind are when online

Christopher DiSantis

increases. gradual be would It

Hamed Khorsand

dynamics just supply in approaching the about. the paper of continuation my industry the think coated your going Okay. paper, tightness right thoughts forward? are we one-year is, question And the final What on since mark come tightness given saw this now, I then

Christopher DiSantis

terms operating in industry. rates the You mean, just for of

about talk - whether now. multiple segments So in we're

mean, I Packaging. more make. we The of and there is plenty the produce, market. the this more in Specialty So across we can

of come segments. rate Graphic of we expect to likely to it as one, part the operating In business, That continuously grow the continue terms XX% tight. down the be we of the other

got good we full very of that very operating year expect year, so backlogs. tight. line. will So will businesses. beyond, visibility. be is There we into be come good - We've see going But next lot next we supply-demand early don't continue still the until continues We've out off we got write-down And will the end to rate remaining we're a of of to this part from looking be would to XXXX the say standpoint. year wait capacity

Hamed Khorsand

any what's on far reason update going on industry is alternatives. then to year, And guys business has Is end? on or and the the looking there specifically achieve is that happened there there this you Okay. that an strategic are something nothing

Christopher DiSantis

No. have specifics any updates type. don't or on No, we

Operator

of next Research. Vertical question [indiscernible] from comes The

Unidentified Analyst

conversion. questions regarding have I a couple of BMX

Firstly, with regard our to side? you are the Are looking XX So companies? they little of color at can in integrated export terms provide a bit you some independent?

Christopher DiSantis

the all export, domestic non-integrated, integrated, above. Both

Unidentified Analyst

and approximately many greenwood And it's Perfect. on regard to curve year? can think how machine, you do going to of of consume tons an be with the new the will XXX,XXX us you every give tons indication of where

Christopher DiSantis

to other part is X What full part we of was run The rate the Second question? capacity expect Phase the over just we're XXX,XXX. question? at when the of

Unidentified Analyst

do terms of in the be terms of capacity, capacity maybe will you the to do just in And think machine greenwood, in XXX,XXX - much how require you of tons curve? Where be the produced? believe will these

Christopher DiSantis

say you let - When be me an it's integrated clear, machine.

So product, weight. it's of light I all correct line think

Allen Campbell

tons. XXX,XXX

good haven't a of curve, information, where machine. but on it's the put We any cost out

Unidentified Analyst

Okay, a just last perfect. as And question.

already Now start-up phase. in you're the

wondering, than just I CapEx think we're ton. less at but experience, looking think you high, a this with took $XXX,XXX still slightly So the I

much done now already a you have essentially some do this peers of that the you've conversions on per more than experience what ton that think with So basis? complete, at decently costed are looking

Christopher DiSantis

of I will color. little give you a bit

what to we're it down comes off, first So with. starting

machine are line the typically grades So And of of the making had from we're standpoint, of backend. credit. Those that is difficult more course, more good technically than a difficult. in starting with a products, an terms technical excellent making very

easier So we line We integrated the production for just in started good is us than very started to technical machine. opinion see level higher a manufacture. product our we the with with expertise that's

very you spend very we're we on creative would. in about So a much we what envelope business cost an and and limit pushing the side just like very good the on look terms were no it There is creative at to in the machine conversion. And can entrepreneur started with equation. of mills it

out this to low do figure scenario. very a Let's way in a risk

our yield, we on $XXX don't up wouldn't on return additional machine allocate just return. tonnage, look risk-adjusted we to to get system. risk-adjusted sequence get you're on to million. to improve up, And you $XXX sometimes to debt return mean help have. But capital to capital other second to you of it. looking invest an million, out That that could project. at cost smaller looking already And more more position investment start-up it's that potentially just capital where debt Those you capital here. the more. have through They When speed There we're capital asset going looking sometimes the speed looking the low point to dollar you're risk-adjusted or tonnage potentially system. are follow based they are doesn't third just we approach investment to philosophy in hard and So machines the really

adjusted to on best those have going best are that are capital, ones projects return get. the the So that the

Unidentified Analyst

Yes. Makes sense.

so just orders, they to wondering still do orders firm the you likely to customers are And or thing just for place as evaluating process, and yet? and I about - have you customers. they the Just new but them was going the haven't need probably they're later calibrate through firm described interested highly done qualification they're machine actually, last besides you

Christopher DiSantis

Yes.

have We both.

We backlog backlog a a orders substantial have and of follow-on of qualification LIBORs. substantial

Operator

questions. further no are There

Christopher DiSantis

attendance like to for would your We have. we and thank questions today good everybody

Thank it. you. day. of So your rest the Enjoy appreciate

Allen Campbell

Thank you.

Operator

now Thank concluded. today's you for has conference presentation. The attending

You now disconnect. may

Billerud Americas (VRS) 8 Aug 182018 Q2 Earnings call transcript