RYAM - Earnings call transcript Q4 2019 | Rayonier Advanced Materials Inc.

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Operator

Good morning, and welcome to the Rayonier Advanced Materials Fourth Quarter 2019 Earnings Conference call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to your host, Mr. Mickey Walsh, Treasurer and Vice President of Investor Relations for Rayonier Advanced Materials. Thank you. Mr. begin. may you Walsh,

Mickey Walsh

and fourth everyone. call quarter operator, Rayonier and again Advanced Materials XXXX good you, Welcome morning, to webcast. Thank earnings conference

Chairman, our Officer; High on and Vice Financial Cellulose President me today’s & and are Yield President Senior Boynton, Joining Frank of Finance, Ruperto, Purity call Officer and Businesses. Chief Vice Moeltner, Marcus our Executive of our Executive Chief Cellulose Paul President High

at are and we release issued materials I’d available you on remind presentation website statements will made presentation, and earnings Our pursuant safe last that our securities federal to were of laws. rayonieram.com. forward-looking today’s to like the evening in provisions harbor include

our statements on Slide Our They to actual SEC with referenced results the of we are materially also our may of earnings as list the from may cause release differ as make. forward-looking filings material. presentation the well X some factors which

presentation. certain Slide measures presentation. measures, measures will financial as also presentation useful information XX on measures. XX provide believe considered reference We investors GAAP measures GAAP their Slides alternative included for management to most noted but Today’s of financial reconciliation not be and on our non-GAAP non-GAAP non-GAAP measures should directly of these our X an comparable financial of A are to through

I’ll over Paul. to the now call turn

Paul Boynton

Thank Materials. you, Mickey for and good morning everyone. XXXX year Rayonier was a Advanced very challenging

lumber, from $XX viscose. products, of global We in for high tariffs EBITDA of our pricing million delivered to and the was we the X, and pulp, number a including general faced result. led Slide of an disputes commodity collapse yield which on unacceptable noted challenges the fluff As trade a impact year, as

year-over-year accumulated impact. result, EBITDA million to a $XXX declines price As

in performance difficult it the reflected our on managed operational half financial challenges these severely the also of We stock and resulted in underwhelming some first through and price. year issues

decisively I pulp through very in process our them. than to XXXX business conditions the I’m net in that resulted the a mill acted these evaluation portfolio of managed proceeds ultimately results, XXx and high-yield million, more a difficult the and We of $XXX how valuation commenced commodity for cycle. our am they facility of While for Matane respond proud sale disappointed team to representing

suspend reduced provide million plan focusing improve, a discuss will cycle. cash $XX the the per they million engaged basis. and saving primarily actions year through $XX necessary in announced or Today, to further detail reducing cash additional capital our challenges renegotiated more manage before spending and also reduce worsen Concurrently, costs that us common also asset with had to flow, which later. financial capital. a We maintenance by will below Knowing with flexibility a improve stock relief by lenders XX% unfortunately to of dividend on strategic covenant on we in go forward might we the we I

want on with you I as an some update provide on events to Page Now X. recent noted

there to positive while see the China region. signs First, challenges related the in also and disputes we many crisis, ongoing health trade are in

allow purchasers will certain to specialties, the pulp and On viscose for from fluff tariffs. exemptions it government for recently including Chinese dispute, products, the the announced trade cellulose apply

and quarter. in or working the the first later receive in early exemptions are to our expect with second We the customers quarter

our would And of benefit as the key collections from and a are $XXX crisis of shipments to our and to to reminder, the removal significant we health in Chinese that sales ongoing date to report results. the China, flow China yield product U.S. specialties light at continue levels. cash customers pleased normal a cellulose sell to orders, we In million tariffs of about from these

in some offset geographies. with being sales into see We slowing beginning of pulp, other are to high-yield orders are which

in and to We this continuing situation dynamic of are monitor outside China.

feet board housing XX% over X,XXX year, increased or we’ve decade. housing starts Lumber The by strong a the seen months per start as we’ve duties softwood since starts. very supported Recently, announced highest of from country. approximately the the recently XX% of seen in our prices progress home lumber a in reduce two have beginning $XX note in benefit that annual Canada, Closer August, various determination million. an X% in a realigns rate $XX preliminary blockades around in please to to of managing been to we’ve U.S. the also to

orders impact are to by methods working that ensure are developing mitigate alternative the completed. We shipping to sales

speedy We end and logistics are costs. to these a avoid other blockades hopeful for higher

at for marking the high-yield have on February, bottom have in business. pulp, modest excellence, more cycle potential operational of last several a we churn the the assets over through focused we With Lastly run a this in January reliably months. and pushed our increases price renewed

in result increased stronger ton markets fixed-cost increase volumes support I’m drive our expect a drive High Cellulose our Purity and We will ability will down that and segments, to I’m in our our for which optimistic businesses much improvements in to profitability confident overall XXXX. per significant XXXX.

Marcus going I’m ask outlook results Now for to our XXXX review Marcus? financial XXXX. and to

Marcus Moeltner

basis On XX% $XXX you, decline. the Slide million a Paul. of with Starting million operating for with or declined Thank $XXX price income consolidated X. declined accounting

and and volumes sales weaker softness in Purity by $XX Additionally, million High impacted XX%, Cellulose mix or further newsprint a results driven markets markets.

contributor and year expense It costs to include amendment corporate from worth of million in environmental the also loan million the reserve to $XX is a a operations. related first the $XX that noting million non-cash our loss primarily issues charge. significant $X Operational were half of

X% price volumes, both Cellulose previous with CS Purity sales guidance. decreased and Full were decline our Turning High XXXX a to by year by which in driven line CS of Slide X. in million, in $XX X% decline on sales a

fourth quarter year demand. quarter, from price declines accelerated XX% in prior including weaker the prices in commodity as Additionally, to declined the a reduction due

compared driven at The EBITDA ago. for largely price for $XXX was was to $XXX increased declines a commodity million million the change segment by year products volumes.

a XXXX meaningful earlier impact on increased results. reliability in from had issues the operating Lastly, costs from

including driven pricing, $XX by a inventory by sales EBITDA XXXX of million driven million favorable declined yield, for Also in to improved XX% the Turning loss X. our lumber million to Products $XX segment XXXX. fell decline this EBITDA Sales for costs, Slide a duties from products. Forest and offset lower segment by of $XX loss duties lower the in write-down. that partially includes by mind keep million an in reversal wood $XX

U.S. saw Department million Since of the accrued taken softwood the of of million this historically total vast $XX deposits. impact have lumber XXXX. the duties. the $X steps in should a recovered have prior Commerce into a we the or trade a on of upon on the month, start duties interest these shipments that on that have have U.S. of XXXX, has we And deposited Based Canadian majority we duties all of of disputes, results resolution. producers beneficial Earlier in

were Turning flat increased segment was for X. raw has pricing. lower $X slight a improved transportation at $XX broken million into throughout this costs. to by Slide logistics raw material partially lower this as EBITDA XXXX, Sequentially, Paperboard sales offset costs. segment costs as volume offset and improvements decline primarily own segment. material higher due to segment been out million Paperboard its in

due on to to our and in Sales Slide declined. XX. newsprint primarily & Pulp as Turning million XX% prices $XX segment for pulp Newsprint in reduction these prices a demand high-yield new XX% decline products decreased

decreased volumes driven market for issues. and High-yield $XX to $XX segment also due declined decreased XX% and volumes newsprint in lower sales market reliability X%. EBITDA this downtime pulp prices million downtime by by to Additionally, million, XXXX.

quarter our $XXX revolver. to fourth loans applied of we Slide XX. Total approximately $X.X decreased million cash to Turning towards sale debt Matane our from repaying term billion as asset and

ratio leverage of on most liquidity, $XXX to $XX than We and year available cash including ended secured the requirement of amendment. the year ended our X.Xx, compared not $XX the million million a facilities. credit on million covenant net Our revolving X.Xx at more with based of recent

XX. to forward XXXX on Looking Slide

we decision while We a by increase FX on In product preserving time impact expect commodity basis costs for to in enhance we Purity and controlling prices any years, and sales on our High at expect cash. markets CS for are contractual driven to modestly timing first focused X% to margins. before the Cellulose, seven recover,

volumes CS pursue volumes to due expected ramp certain decisions to CS driven not are margin contractual and in down our to lower business. decline a by

are towards expected to coming from volume with increase In segment forecasted markets. by and commodities sales more from the automotive productivity. about lower this volumes shift for expected by negative impact to Commodity half expect the XXXX. plus sales addition, mix end prices operational mid-single-digits increase commodities. improved volume timing driven This weakness in CS are a recent volumes is from Total we lows throughout

health current volumes. and pace the Products, and in as fluff are XXXX. on EBITDA anticipate positive the which near-term reduced and the dependent we largely supply Overall, to housing pricing growth of The data is as amount In China. well pricing the improved of leading positive improvement impacts in the commodity of viscose Forest in crisis

breakeven, segment million of EBITDA this segment, in requires positive of is which a board pricing on For we be per current for change loss Based approximately significant $XXX the to conditions, EBITDA duties. feet this X,XXX net realized expect from $XX it XXXX.

material expected expected stable to are XXXX, remain sales from are lower improve Paperboard costs. to raw in margins while

from pulp gradually high-yield to of current improve expect cycle. the prices bottom We the

will Meanwhile, are increases minor geographic due related to with We mitigating China to expected increase demand crisis February January in but the have volumes challenged achieved in and regions. productivity. are price improved to successfully sales health and impacts other weakness, to prices remain with newsprint

With that, to back over call I’d to like Paul. turn the

Paul Boynton

is Look, our of business we Marcus. midst know the in Thanks, a downcycle.

while positioned business on to cycles how that to the of upswing. is know managing capture proud I’m also downturn, well in our being turn. value ensure survival We the the team

covenants are ensure goal actions. with primary a number face. compliance of that financial in remain what To we end, we to market regardless of we Our conditions that is announcing our

XX cash XXXX. As have Slide that and identified costs noted to reduce flow on improve we in

to efficiencies operational cost our In by by programs. $XX XXXX combination $XX of in reductions include: implemented external primarily reduce million, of and improved we reducing million late chain million from $XX and supply from to benefits targeting actions services. a operations; the first, continuous headcount reductions come to will XXXX reduction our These million These $XX in costs million corporate in from $XX total, of the improvements through second, cost we are expect these levels.

addition to reduce plus further XXXX. in projects to high-purity CapEx XXXX, $XXX This will by primarily our the reduction $XX put cellulose an is that very on million. million in assets we capital Next, paybacks. place $XX or in focus additional million some of million near-term will from strategic certain maintaining we selective $XX in CapEx with

additional with reducing vendors $XX inventory and million targeting levels reduction capital, terms, in improving payment and upon we’re working Lastly, our primarily an both from customers.

price and sales, drive incremental help improvements. previously, at include we These discussed to opportunistically further right structure. Additionally, we we’ve identifying opportunities execute are as asset the will which,

also at conditions if We site curtailment even closures production permanent workforce we reductions, look or see additional don’t of market improve.

the that Down market signs returned we and we a to be always cycles to may recently recovery. some close positive, have have

necessary are us action value capture We the reliability to reduce as cycle the to business market improves. cash costs, allow to taking the both manage the will cycle and preserve and through that improve

emerge as stronger company. will a resilient and We more

operator, that, up please open With to call questions. the

Operator

RBC Thank your Instructions] the question Our from comes with question. first proceed Markets. Capital of you. line of [Operator Paul Please Quinn

Paul Quinn

Thanks morning, very much. Good guys.

Paul Boynton

Paul. morning, Good

Paul Quinn

we’re alone. lower-volume Just guidance Purity should up that of and X% the forward, mean, the High rid business, things Cellulose. is increase improvement cut on a getting will lower-margin doing one question because the your the in move prices mix going of – I

that Or in there I’m wondering, actually it just mix? price increase a all well? So is – there as just the is is X% effective

Frank Ruperto

a our going there’s the increase forward, And as this. from we some piece in Paul, XXXX to this stabilize last CS sales first the going of we you within of ground segments strategy need it start quarter forward. on putting material know, focus market, of and price actually Yes, to was, need a – our firmer

So the that. of goal that was

better And hard was viscose do very think I get those a a think forward. able pushed dynamic throughout were an we difficult I signals and year. so market, price so of outcome, that positive the very going which market to incredibly to in We increases face the

Paul Quinn

I so well $XXX the breakeven around, understand duties able including current Okay. prices to would with and that. $XXX And of sort guess to moving be then, up lumber, guess, somewhere I be are just it XX% I that above breakeven on right brings to net you now,

So looking XXXX is reasonable?

Paul Boynton

business. prices, ground. think part that, EBITDA let on we in $XX And me first at And of course, take today’s I a what you million the commented. that should Paul, of Yes, be we just EBITDA if in posted we just loss, last look yes, loss, year, positive

duty another the million, X% we the That’s $X that the So that from the should at contribute August we’re frame Marcus, not to that for I reduced will time $X million expecting XX% think, and improvement. least including of to think be year. balance in

good on improvement just yes, So anticipating we based there a were today’s prices.

you’ve got prices in even going I your think forward models. positive more

Paul Quinn

Great.

guess, then your And lastly, High to Okay. just Purity back just, I markets.

Just there will kind seeing specialty I’m and just confused, very and question, now be Maybe right that the equal are sounds recovery. because of market viscose volumes. you on viscose, price between the much volumes seeing like what it I’m also, then not in

maybe you market you guys are obviously than So closer lot the I a – am. are to

Frank Ruperto

Yes, Paul.

X% went be on better the some we’re get which think some about market We was basis. businesses. And going will were have to right? mix of things, of They not volumes, XX-XX roughly lower-margin we our go well. volumes anticipated those did about fact into to contracted contracts, – the align historical with two attractive that think said you the down. in that fact, in said strategy didn’t about down Two-thirds out overall think product when we We of a as impact we’re the be CS and a of very to will So X% here.

of in year. throughout we third the was loss which volume about half last really CS automotive markets, of about particularly markets, end the in a About second weaker talked the

we’re really well. we that So is looking but at operational have as improvements what

CS some one think got going so these on from into operations. lower about we’ve got volume we’ve two and And the on perspective from commodity then there’s if a volumes volumes; you of shift the improved going things it, the commodities: is

sealine just you operations of we’ve strategy assets. our fluff the second productivity well. so and in quarter in has as last productivity we mill the If year recall, machine just first that to increase of weak, on well making as And pretty a were of and pulp quarter significant got better as switch

for about what’s on really So our efficiencies the the the roughly not split mix, production commodity between XX-XX CS that’s the driving that’s two. improved of and the is XX% increased If facilities. other XX% the

Paul Quinn

was helpful. That Thanks much so guys.

Frank Ruperto

I heavily So And in is also in and the market prices by think just viscose asked we’re very been seeing there. China, we’re and Paul, seeing quiet what is about it’s Okay. that what you viscose influenced viscose market? over the market

because the pricing has So on the we market haven’t quiet. improvements material been viscose seen more in any market just

well China. specifically up into Our in very volumes market, have held the viscose going

customers think to tend some better in be that’s over the there. I because larger, our businesses of part funded

So that’s gone very well.

So that’s been a positive.

What’s though, customers, We’re some et keeping given on going our to smaller of our labor-intensive. spinners, cetera. the eye bit on, little more a the and from issues, be tend with downstream coronavirus who

but that on haven’t piece back So it. yet, up of keeping we that started we’re seen close eye a

pricing we part of away. are The in they pricing no increase I’d But need going some move, go if And I in pulp have again, longer into fluff that to we’ll side, haven’t see also to on pushing do, market, the for viscose prices the seen making March, as of the minus. away, price the some or our and pay where they price plus tariff March, modest customers reference we by some higher announcements benefit seen increases for going actually then those applying extent. in viscose tariff markets. big driven those think, the in guys to

Paul Quinn

again. Thanks, right. All

Operator

Our Please next D.A. question your Davidson. is from proceed Steve Chercover with from question.

Steve Chercover

everyone. morning, Good Thanks.

seven I of elements that on first first that – recognize Quinn. announced years, last Cellulose, High my some the contractual there’s the price couple X% X% yes, suppose, which So hike is a the to you fall, it. I hike, is Purity questions Paul On to follow are, in

in XXXX? hike from more trickle into be price there fall XXXX the will So

Frank Ruperto

let So bit. me up it little a Steve, back

pointed have XXXX So that’s did relatively hike, between at I which certain the flat XXXX and think had contracts levels. X% you out something important. set We and pricing

we price announced takes when increase of So look was those a that The account at into the X% that we X% some there. issues.

think not others. it. X% in roughly in it is, I certain of way as and think We to realized stronger about the strong realized we markets it

we sectors automotive more last we and that In a the filtration So how more sectors, pricing if through. some year, stable were and think to saw difficult of push better pricing improvement. the about weak you found growing

Steve Chercover

So on pushing be there’s still that. or struggle you’ll

secondly, not specialties, then up cellulose non-repeated And for slightly price hope But redundant. does the wood I again, the explicitly Okay. EBITDA it’s the include in boiler segment that Temiscaming southern spike?

Frank Ruperto

Yes.

Steve Chercover

Okay.

that reflect So the $XX VC decline And – it. got guidance SBS ton last flat printed does Friday? price Paperboard, in your per then

Paul Boynton

number. would our Yes, guidance came of our mind number of baked out Friday. lot keep that directly one, pricing that is to say index things: in I kind just that, you last hinged into a there. a But like VC out, couple said, any of isn’t And fully not

So that way. not fully I’d it’s in connected say

EBITDA be I pull same Steve. hard that will in well. way, it increasing team that a think time, on I volumes working business for a the the also as negative on is At know the

right I’d to it’s I’m already So got mix volume. not it has plans significant and that impact, some if in that pretty very team’s offset a one, say, an and now, the some with place confident positive

maybe is, $XX is although our in by EBITDA think you our little but a overall said, I good, pulled So case. bit the that guidance pricing down, not still as

you’d anything there add is Marcus, that? to

Marcus Moeltner

a good that’s characterization No, sales of our portfolio.

Steve Chercover

Paperboard also most then with respect to in high-yield blockades, the And to ability your Great, impacted, obviously, & rail but lumber ship thanks. Newsprint? Canadian is it is impacting the pulp

Paul Boynton

Yes.

out of why we issue, up should get we it. I Canada of kind that’s caught think thought mention a our recent of and lot products this into

British First the Nations project. benefit, spots for LNG are people up blockaded country in being in lines rail the construction Just of protest pipeline by set Columbia everybody’s different in

issue. So that’s underlying kind of the

a lot corridor. rail action up. is Toronto Ontario positive that move the concern that this some Montreal. And news, and there’s aggressive started we if product and the Police just in of between saw that line some We Provincial took major Our opening week

seeing but a product be a it’s permanently flow, opened and pathway and we’re so some tenuous, temporary. just And not needs to it

it. I – trucking do companies but passenger positive like it’s see railways back said, other flow, we to concern be just the open we most monitoring a needs And So everything to need China, have, working But again, and some in through and we’re else. and forth even open. developments, in we’re on and pathways

on to happens. see focus continue I monitoring make that all to we’ll that, Steve. So we’re it, But governments Canada a sure that lot of think in from

Steve Chercover

partial I an I the historical August. it’s know articulated, the in reduction lumber precedents again It’s then to And Yes. that And fair Is these duties. should interesting once how as was situation. admission that Marcus it? the interpret that by on expecting right? Canadian respect wrong the guess, this And you interpret with we’re case XX% to duties a U.S. that extension, duties, prevail.

Marcus Moeltner

files, Yes, it’s over determinations these files. adjustment. Steve, then rates. you’re the correct. might good see further, sign, evolves to out you market, this they much and file But I a time, lumber with you into very see lumber past the And and think tend is preliminary prior Like lower an come as confirm aligned

Steve Chercover

Okay. And don’t I call NAFTA. it still they what call to it. going then I’m care

and the knowledge, that’s working signed, to they Ottawa? Now between that, lumber are on Washington your file,

Paul Boynton

and focus to to that I shifts Well, be have part a certainly discussion. it of parties you that, but think need do to the cooperative opens

to I Steve. hey, I’m has do know in the I know got don’t been to that, any made. it. talk progress that has shifted to say, everybody’s about So focus

Steve Chercover

to then that be? that And to cash with flow moving all minimum might one your better. free Do – guess, want you’ll be with land? hazard expect Or guess do the your satisfied and Okay. your goal where a one, might stretch on parts, minimum I you you what be last

Marcus Moeltner

some the CapEx reduction Steve, million. targeting that cash you on just we’re $XXX And to $XX could items. was Well, cover deck maybe around you $XX of XX, from Obviously, a million. our I’ll of million can slide see flow Page see filing our in

should So and certainly, be our the those charges business in flow. fixed will lower cash help

on very it’s In payment $XX inventories the another is on million, and improvement lever capital finished of targeted important products, addition, terms. and working some

as can million $XX another So there. see, was you there

And those we see got this fiber continuing then we’re Paul and year market on strides further issues operationally, improvement And we’re our the synergy comments, right his making in keep as mentioned the in we’ve Temiscaming the saw it in in should addition, goes, direction. our further our this together help hardwood things us. in boiler cash as far to three-year targets are us team behind to flow – so issue global

Steve Chercover

promise $XX it’s And the boiler, sorry, but now mean, it? million, doesn’t I you’re last like a sure $XX going Temiscaming was savings, $XX Between benefit I specialty is wasn’t going million to sound be that for comment. hardwood my to Yes. and this like cellulose in the business. that million

Marcus Moeltner

use specialty look, – context improvement. chemical cellulose obviously that’s element of GDP our going of favorable HPC another the business pricing. our caustic thing an to as lot other operations. as theme pricing is well caustic That’s the global a another business, show The in year-over-year up We within throughout

Frank Ruperto

point out, that second quarter really thing Yes. in one fourth also the quarter. I’d prices fourth in viscose dramatically dropped and the Steve, is – The half remember

where so And and off year fluff average last starting below, below on the year. well we’re were prices viscose the

have how those bit and So we’re fight of develop. that’s that see going headwind markets a to to through a

Steve Chercover

Frank. everyone. Thanks All right. Thanks,

Operator

questions question. with Burns Stifel. of next Our your from of Instructions] come [Operator Sandy Please line the proceed

Sandy Burns

Good morning, everyone.

segment that segment in industry. of company flow of on you small would for commodity cost the given in how was it pricing Has EBITDA and/or the cellulose a it be cash most mean, Just gotten production – still of weak – to large is able for industry, industry? below discussing is side, the pricing the Or XQ, I a positive the comment bad?

Frank Ruperto

China, viscose of not to heard prices and online, and prices, the these all that viscose staple specifically for China. levels in that conducive specifically capacity the downstream prices, the fiber So at stay are what is we’ve in are

regards that. closures facility we either the see business, that. to our can So we prices at those tightening will at will as In and of we some look look supply own a side rise or

making at surprising. positive contributing not not to costs, positively EBITDA should is which we’re not are our but be levels, We these – fixed –

Sandy Burns

Right.

driven for the the it’s whole, much sounds hindsight? industry the by prices expectation start profitability not so improving prices coming or just like a capacity out higher So as more rising in to it XXXX, for on

Frank Ruperto

That will it. factor be one of

I and supply really the the cycle has the XX% U.S. impacted viscose think into the what’s been tariff textiles other piece of and from of China this the

So it’s any and demand better later. our the of see the we’d see growth We even the would rather but some recovery where than side that’s weak relief there pickup supply some market, a perspective. from in did demand been see issue, to that’s the expect earlier biggest

Sandy Burns

versus Okay. that much, cellulose And much side, that volume any, comment side spot your on the specialties on contract you – more is under sold then if could business? is under how in of how

Frank Ruperto

don’t business. under We spot sell typically

arrangements will most contract our volumes under have predominantly for the we or So of year. either

there. so minus, And on levels plus guidance volumes depending pretty that demand good, typically or we’re we on with at those give market being

is critical business much it. really don’t the spot material you see that want into make and a because a to of it they’re covered going sure very cellulose So raw side in specialties people

Paul Boynton

I we to business. one, type contracts, that add that have, it, And three, specialties two, so Sandy, cellulose four-year in would probably

Sandy Burns

last for me. Yes. question Got you. And Thanks.

that the there three the a one-time year. in spike It we cost Any million was should that other been in amendment. $X like On you’ve expense it think about of of bank that bit won’t kind first be the side, XQ the of in XXXX? corporate repeated in the running costs did what up looks quarters versus of

Marcus Moeltner

run Marcus We support But one one-time just charge of the if look here. the we the and put as there well. There trade-offs, it’s on reserves million, other larger $XX targeting fees segment in can compensation, Gains items, targeting well. our million mentioned program our be in the And altogether that’s goes professional year-to-year. hedging our it to you we’re other we portfolio this Yes, there is in that had that some end, work. those corporate the to our obviously there mentioned, And FX as At the loan million change, $XX environmental all losses at year, includes obviously, is it’s you said charges we’re amendment. balance. through context, on $XX taking that’s our through why so in items key as will item target. disclosure, but that variable that

Sandy Burns

Thank with great. Okay, everything. good luck you and

Paul Boynton

and some other I’m goes going to Sandy, to the folks question. same just add it with maybe

again, covenants as a you look $XX disappointing our we our in EBITDA results goal primary for with manageable? negative. we’ve markets. is of compliance and I so and of right? guys, in be, well, see regardless positive that some these and XXXX, a on to on build at want the in we to compliance recap The question’s these can but straightforward think some of just you got kind said, along tick start here I do out of have thought to XXXX. financial on numbers. of here to I help I with path it’s all these, up it’s little And them. the you’ll a a our probably Because, think with bit coming million then numbers if is that that remain numbers just But the thrown kind just look, lot worthwhile, different Marcus, me you very of and And And ensure let’s maybe, on kind just

as our That’s, Products, some so us. right? costs, EBITDA-positive. got market certainly reduced talked in current help, and as have we’ve fiber will Forest is business, benefit, that well right, a got some pricing, about we Paperboard We’ve benefit cost right? to chemicals significantly the at We be One,

We – talked this also benefit about it. next of or coming right? X. beginning quarter and We We China quarter, have, as we that’s on benefit off substantial and a March just mentioned, two in Frank us. tier different areas, get into the to duties is it of should

a got million annualized. to going down And Products, million $XX duties China. and we’ve in If going we there. product least XX% that other the if to of $XXX about Forest U.S. duties with the from X% That’s lumber you about again, consider, for us. August, talked coming at benefit Steve talked we

So you elements. market got the

some we’ve So talked year, number HPC duties. we’ve recovering And business, going then You poor taking. we’re to cost some in got we’re the is that particularly right? higher actions volumes. one about that operations last just got And have lower and really

have forward talked we’ve our Three, year significant corporate $XX and in And out haven’t cost corporate synergies. in about the million nice us of April. about also XXXX, give a a year, and That’s kind also I benefit EBITDA benefit. the a finally, the but versus us. the of here also of we just talked this, and improvement be million will targeting pushing product launched it we cost some third for half think Two, with talked back will $XX we then in about new continuous that

fluff I be folks’ I we viscose think that said did to going levels to and opportunities positive offset. very a potential pathway mind, there’s Frank compliance a pricing but us really, XXXX, XXXX that in us question on straightforward that. be to mentioned offsets that’s so negative XXXX, are leads below got to think at and a for are that so And in that’s to

to be challenged. will We’ve think, got it a be And the challenged, breakeven newsprint EBITDA for Right? very year. market I that’s

coronavirus, well. the got which overlay as So then that’s an offset all an on of And it. is you

actions said, our way, ahead economics make the what for we take So things that going it look, at, be in why going sure that’s of – year. balance regardless additional and we have to and that look to come will the we’re go we’re but of positive those to that

and kind Marcus, dollars so notes went we to some can here, benefits. And a of and you thought run just through through maybe you’ve put those I lot, taken

Marcus Moeltner

Paul. Thanks, Yes.

Paul moving As some I Products $XX our and million year parts Forest that million swing. loss pricing various segment, context comments be If last could marketplace, the the in that on mentioned. of put look at you current mentioned, $XX pricing, perhaps, the a to that regarding our given

are pricing. On lower business Paperboard is some our the and chemical chemical cost side HPC and fiber pulp and prices getting benefiting our from operation high-yield is favorable

$XX be So that could another there. million

So those duties. it, call We the $XX million. mentioned together, two

end back impact a year. versus million drop to the that this the the our is of estimating around rate lumber We’re for X% business $X XX% in

And of in XXXX, exemption the comments. the the U.S. mentioned that for the the $X performance and in that HPC around China pricing have wood in cost We we the is equivalent the boiler mentioned business, given process covering tariffs Frank issues south. million our new been poor in the his

various If that around million mentioned you our through recall, was year last $XX we disclosures.

We million continue this our area. on corporate year three-year another costs. we’re in to make We progress $XX mentioned to our that targets. synergy hoping And achieve

That We’re to in really $XX million would focused $XX the be reducing range. reduction. that on million approximately

realize to $X the in the of mentioned the a in Paul we’re targeting range new end introduction, And of that’s the where benefits back product million. of and year,

could message take There you $XX to If that be of negative. the million positive to viscose But and prices this given these the range performance And million could those. and of the range the you mitigate in get the million and all $XXX the are and we things. $X chain them there. opportunities, $XX those, that in Paul supply slowdown mentioned, you the $XX certainly, of rail call fluff million we’re that we’re conscious with the in normalize million blockades perhaps with in that world, of perhaps range quickly prices, coronavirus could year. looking be negatives in newsprint for together,

all net should would to you performance to world, certainly and view moving picture versus $XX all of improve million have show where lend So approximately we of where your EBITDA a again, year. were parts the but those our the business this could

rough perhaps I’ll context, also put means covenants. what in to in our numbers, think And I that

$XXX look remain $XXX as our year, and X.X of environmental and the covenants times it’s we be you that that of our non-recurring that go to ratio loan compliant. debt I EBITDA adjusted, back tighten approximately equates to limit, net covenant and pension If and charges the the And up around as and to million stock other amendment should note does into allow we know such non-cash certain for around costs. secured compensation covenant at at million, end our

So confident you this. can we EBITDA math, an can that million, with that $XXX that, of million to feel maneuver range through see $XXX we with

Paul Boynton

to confident again, we’ll that up point you have a sitting you’re does at $XX bit. gives how additional Thanks, lot improvement, hope we a got all model, position. we starting that and then you of tried say, Marcus you looking numbers that in and you buffer taking want further to fluff then a of million, there looking viscose oh, Marcus. provide any I us more we with tallied at be we’re back that And million, transparency just we’ve guys again, confidence actions because will as know And math through manage million I your this And and this to well. are $XX a add good $XXX and are about these there, some offsets, pulp down pricing newsprint work?

today. for more and are a questions, want us that. to markets. we’re stronger everybody I there’s if time through But I no aggressive emerge our These actions So cycle their that the will confident appreciate see company. challenging much as thank

for morning. your this you thank So time

Operator

concludes conference. This today’s

and for You a at lines have your your may time. disconnect you this participation, day. Thank great

Rayonier Advanced Materials (RYAM) 26 Feb 202019 Q4 Earnings call transcript