RYAM - Earnings call transcript Q2 2020 | Rayonier Advanced Materials Inc.

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Operator

Good morning, and welcome to the Rayonier Advanced Materials Second Quarter 2020 Earnings Conference Call.

During today’s presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be open to your questions with instructions follow at that time.

As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mr. Vice Investor and Advanced for Treasurer Materials. Walsh, President Relations of Rayonier Mickey you, Thank Mr. begin. may you Walsh,

Mickey Walsh

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

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

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

noted We presentation. financial information SEC on to presentation. results measures Slides useful of measures. alternative cause provide investors, as considered X our may on Our Today’s XX which of believe may and differ factors, management to reconciliation make. measures included measures list to our be of directly X these referenced of most comparable on A some GAAP and not measures certain non-GAAP forward-looking earnings non-GAAP well for They with release as of but statements actual the Slide GAAP financial non-GAAP X from as presentation reference an their are measures materially Slide the should our financial our XX also we through will also material. are the presentation filings

to Paul. Now, I’ll turn call over the

Paul Boynton

everyone. and Mickey, morning, good you, Thank

a In of the June, to pandemic supply demand them we’ve we’ve safely contractors this kept the with our provide is has to Managing we’ve to complex plan to level of Throughout past supporting team continue facility environment normal teams all to protocols. our source how way pace support six reliable our assets has the a in proud over markets whole challenging. Let I our uninterrupted over me flex been to markets. down to successfully a The customers. demand am bringing pandemic, enabling the saying seen customers as have safely a serving levels. product responded first and months our where end Jesup critical products, in maintenance the able weakness, start admirably. global production executed adherence new COVID and for operated complexity significant by of in at shutdown a our very X,XXX we appropriate a under strict our In added their

in the areas, coming and We were but months. did pressured seeing to the guidance, which improvements discuss of are our will not I in results certain expectations similar Fernandina later. are Temiscaming outages compared in we maintenance signs Financially, by planning pandemic some and meet

laid Overall, quarter the compared $XX me as highlights provide second we Let EBITDA some million for $XX on first year. X. million delivered the of to last quarter adjusted Page out for

ask well decline as to before COVID-XX perspective and questions. go Marcus Cellulose as more the charges. key efforts call in high missing Our the yield pulp did Marcus? on improved results. taking the Purity goes while costs non-cash Then the were by in Corporate on enforced pandemic. prior I’ll offset on are year. markets on to up by contributed and a to impacted $XX from team brought as specialties cash I’ll Those year CapEx both demand commodity now We pressure pandemic. working you ongoing and costs from free our reduce provide High the actions we’re of fluff good in with job This million to saw price flow newsprint of quarters’ into prior to reducing capital. the an generated opening compared update the quarter, primarily from stemming products reduced provide detail a We a volumes guidance, response minimizing significant products. help to in COVID pulp

Marcus Moeltner

driven in sales Thank XX% Cellulose of commodity Starting volumes the were decreased segment operational by primarily $XX well commodity $X decline million, improved by an lower from quarter you, as Compared energy both construction to wood, as additional XX% mixed input for volumes, down decline. costs. XX% by Slide costs, year. improved by prices to and quarter higher with $X million, was logistic by issues, costs due related. offset plus as The and chemical industrial as compared accelerated $XX reduced of an of previous on shifts offset sales from decline lower guidance Price are product XX% in volume million, in a commodity declines from a and reliability. ago. the by well were COVID prior Paul. year volumes in X, was automotive, and driven X% and due grades, sales to by first the productivity XX% improved demand second CS pricing, High to significantly Declines for a volumes viscose driven to increase EBITDA Purity pulp XXXX, which CS EBITDA improved decline ethers from primarily million

EBITDA million and as the offset as of in in duties. segment lumber wood, curtail quarter year costs the as declines energy operations labor, quarter, reduced our from to took Sales XX% partially lumber a the volumes, Products second the were Forest several for XXXX, beginning improve Turning million for improved X% we demand to the segment by measures we increase Volume height by for at the reduced the proactive of driven $XX dissipated of mix Slide prior from X. able to sales, were in driven $XX volumes. for pandemic. by in decline sales our declined with weeks

$X year prior valuation XXXX. million a did which repeat in Additionally, adjustment, inventory not included results

have of of of $XX softwood Since lumber $X of million deposited the deposits. start $X historically for XX% we The As next all next a duties EBITDA duties the are or in a U.S. the reminder, these the have vast total of million will the into resolution. results majority recovered paid accumulated prior to the is process come expected on year, trade early decline to approximately a In duties or shipments X% on once upon million Canadian from as include in disputes, year finalized. step in preliminary XXXX, tariffs and interest duties lumber quarter. this later producers the determination

driven declined sales and EBITDA to Turning the for $X transportation costs year. costs. lower reduce raw material primarily the X. Meanwhile, sales XX% Paperboard sales million of segment improved to prior Slide volume from as this in fell due year, million segment timing by $X

yield prices, Pulp million on newsprint our and in from to Newsprint XX% decline year a decline Sales a pulp Turning due X. and Slide segment declined X% prior prices. in high $XX to

volumes sales results due XX% newsprint reduced were by XX% demand in million by elected and offset market the decline by for the $XX decreased Additionally, by COVID-XX. million impacted reduce to driven a in $X to by segment sales partially EBITDA to caused timing, the pulp lower to downtime take yield a costs. company decline volumes as loss high due a

million we helped on XX offset improvement the loss. to were the of At terms the in June, significant global flat we basis. costs seek and consumer significant a costs amendment Slide $XX market global year to our from was a offset In early pandemic declines room at prior to year, Turning benefits volume finalized markets. senior price of effort Operating and approached laid secured the lower improvements by continuous in the banking and prior uncertainty agreement. on Impacts of the to XX. headwinds. income are from signs the market input consolidated the Key partners face out Slide more our amendment first industrial quarter, proactively credit of operating the in an

improved a our we In cushion larger liquidity, to covenants. against addition obtained

associated return, increased We and with the definition EBITDA covenant currency In to also our from gain on amended the the borrowings to non-cash carve out long-term floor X%. we LIBOR fluctuations. X% of losses

that agreed letters of and also we sheet limit the balance that can credit the issue. of our hold We on cash we amount to standby of amount

needed reporting the incremental consent us the pay conditions obligations spurred amendment Overall, the pandemic. and market liquidity on In the covenant manage uncertain agreed increased addition, added to fee. by we with and COVID-XX headroom to provides through

debt XX. at remained Slide $X.X billion. Total to Turning

based ratio more finished leverage We a test part our amendment times as recent secured covenant of X.X leverage than LTM our EBITDA gross to have on gross of moved at times. a to not our million, requirement compared $XXX of covenant X.X

X.X $XX million While to of quarter the coverage credit available ratio facility compared a X.X by We a to the the the $XX the back the $XX of our With Paul. on $XXX in times, facility flow factoring our million credit from the quarter from XX% cash France. cushion covenant cash, I’d ended million million to of turn and with liquidity, of the million times to quarter quarter interest improved revolving driven including prior like to at over now Liquidity $XX that, our in covenant. free and ended amendment agreement. call $XX million

Paul Boynton

Marcus. thanks, Hey,

Turning XX. to Page

action decisive COVID-XX. in the to response taken we’ve noted, As

First to and overriding and foremost, safety be our continue been has will priority.

implemented employees all We protocols facilities in exacting operations. our our have and our protect to

the most and operations. other Jacksonville, protocol staff headquarters to continue offices. and and has areas, spread the Office work our remotely mitigate Our our strict including virus its teams in impact of helped to adherence employees on support Florida and global

with measures pandemic to minimize driven to our respect lumber losses, newsprint we Second, have facilities. both and certain curtailment control and taken costs

our assets production the demand. by capacity, While are addressing are lumber matching weakness currently in newsprint to operating market near market back we our to

to additional and assess of will to warrant We measures. business assets continue these conditions other implementation monitor whether

maximizing focused liquidity. on flow are we Third, cash and

improved agreement highlighted, has with flexibility further Marcus financial As and provides amendment our credit us liquidity.

to against XXXX, by and materials. benefits $XX of in track tailwinds for raw our cost initiatives, $XX million on to market reduce are executing remain costs the million savings excluding We

of Additionally, flow free levels. of rigorous focused and essential we inventory intensely generation, prudent CapEx deployment remain on including management cash

passed to our in in benefit million Page below $XX XX, to expect we CARES year. up kept year Wrapping the refund, receive earnings a the well on this the attributable features cash of tax potential. largely COVID-XX our a later Act form has significant earlier pandemic Finally,

taking manage through the necessary the recovery to on economic are its benefit backend. to impact actions We the

cellulose industry are positioned lines dedicated to of from global term. As leader five the and uniquely owner specialties, the of to we eight the benefit manufacturing

cellulose stabilize prices XXXX helped to have market We encouraged go been in XXXX. our in specialty implemented strategy has that

to start approximately these housing pulp also million and repair HPC the below remodel tons improvement. products trading for rebust and commodity have Forest $XXX and sales market through market this average other viscose Normalizing impacted roughly generate we would prices. seeing five continue. conditions are products. prices second alone. A are by helped quarter of ton and Our of current historical have been These early significantly $XX improvement produce per assets rebounding years recovery market to segment, $XXX price fluff incremental has In levels in Products our EBITDA $XX fast allowed to momentum significant XXX,XXX

As second were a in result, up lumber for quarter. compared to considerably the July prices

order bookings weeks. Our remains file strong out six with over

Additionally, this year we later the duties Canadian sales X% reduced or mills early to be to XX% expect States on from year. from United our next

sales sales experience volumes. Paperboard that United this provide Given paperboard, of based from pulp forecast to expected earnings. to could to as the benefit In many States, margins the lumber on analysts. may half pressure our stable we welcome some continue prices come are rise a experience

our in market costs out pressure for newsprint yield newsprint constraining And production business remain rising meet product the improvement to on our by through taking prices remains products. focused category. this continuous than be under expect the would earlier, we to we pulp offset losses more minimize we of pressure noted high and Irrespective are and demand environment, as program. our However, this of

remove business offset is at to the commitment of each a sufficient pressure. out Our level costs to year inflationary

focused mentioned our on working efficiently previously, maintain allocating and cash we through free capital flow As are capital to minimizing maximizing assets.

to are for to monitor our liquidity markets and capital evaluate and increase Lastly, maturities. extend portfolio continuing we opportunities

more questions. that confident are a we open up to emerge will call company. With please stronger, resilient We the that operator,

Operator

you. Thank

with of Bank session. We first from be [Operator question Please Instructions] will proceed question. a of comes your line John Babcock Our the America. question-and-answer with conducting now

John Babcock

my Hey, thanks questions. morning, for good taking and

reductions pricing, increase here, I you to we the as to million $XX products out about the commodities. getting its $XX have $XX commodity Just start have year. of beyond I and what wanted here. in the EBITDA does potential to But various I in mean, improve improvements think else to improvement talked cost million kind about earnings mean, know million you in in cyclical also then to from and Opportunities might your Rayonier to see, $XX the arsenal this from here? million for wanted

Paul Boynton

morning, we Hey, we Yes. right. now, off John. a at if act year, are calling good the for of kicked John, you Thanks internally program, remember, beginning the question. the

was corporate elements, we to that And target $XX And million. to $XX improvement, that with about cost Operating if strong so push. key achieve, talked were real million elimination those Both cost of four different right. big $XX on million target, not exceed. a

talked upon on improvement, CapEx we’re reduction finally as that. to $XX again, million. million. $XX there, improve I We about, out also to And capital million think opportunity to working an on we pace then $XX talked And of

and I bit continue I is proven think half inventories of the target that’s one around. behind that’s to and area largely But to back year moving think we’re we’re that. COVID a to and going in on, there the related the

the immediate So good on I things think in we’re controlling future. success that

commodity improve and right, beyond look restoring markets EBITDA we As therefore will alone. just mentioned significantly right, pricing you that,

to we’ve got as in be efforts. we��re work somewhat for we you’ve new opportunities come we’ve indicated be And well. past, there. the these business a specialty stabilize not can year up And the going markets continue path continue as just heard cellulose hard opportunities our again, we doing we it’s as focus the We of and continue out improve new for return. which again, there, should and worked year that it’s hope And of hard it pricing lot we slightly a products, down to John, product flat. stabilized, as to as this COVID course, around some And have on to related these

So I above $XXX here, forward. EBITDA. well markets if million a externally to were think improve both and with EBITDA just XX in keep And lot we fronts ago, of internally we a going had you mind, months

managing I improve we as job So future. do to a under near at time, And we we’re see through combine opportunity doing significant upon are at certainly it. pressure current think the the the years an but in that good

John Babcock

Might kind of, to XQ, That’s guess, efforts? on material raw I side. pretty And Okay. be improvement to versus continuous did particularly, able how you like was what well then helpful. seems it with cost out much cost regards the you parse from the

Paul Boynton

Yes.

would. you little flavor Marcus you that. Let to a me ask give on Marcus, if

Marcus Moeltner

Yes. Good XX, you the Page morning, John. saw out. we set that bridge On

probably $X And million, call So year versus costs in side piece synergy the the that, million quarter. smaller savings. quarter-over-quarter the XXXX of that XXXX, $XX for around $XX is million maybe in it,

gains that wood, higher the inputs. had on Temiscaming. north on we and chemicals energy continue up see and in remember, that south And U.S. productivity We to we in some we’re costs anniversarying wood also impact year the last had down

John Babcock

to possible inputs? wood, a of energy it breakdown and across chemicals get Is kind the

Marcus Moeltner

of for some that one the Like, in segment call the can we in bridge perspective, to you say detail. give give after but Wood range about some the you that high-purity and the was there. energy chemicals, then two, certainly cellulose

John Babcock

any and it in smells disruption had it the did in both Okay. experience XQ RYAM coronavirus That’d also to be operations issues any then has in from also want July? And check, I just great. that

Marcus Moeltner

Yes.

actually, but assets not newsprint, disruptions as the all we in So for or most we as to that at high those of just disruption that sawmills. assets assets had then talked all our when area transportation. part, in impact On talked disruption We in the purity a yield capacity our took the and overall the up on actual it the out well on itself, around no as itself, in quarter. business either is in is the curtailments high or the COVID. of significantly some HPC quarter, about volumes or pulp, comes of really actually actual high in to And demand to maybe the a saw based as again our third those early taking the balance you down volume we for about purity transportation really disruption result paperboard

John Babcock

Okay.

that, issues. I guess, volume, or that’s get that so that’s, And is lost back And you in that volume that on volume X% from assume logistics was that now. I for HPC mean, that I will kind

Paul Boynton

quarter. On shipping to have would really from the rolled next logistics delays. side, the That’s quarter one that

decrease seeing markets. in the of weakness last as the from other think XX put the that they’ve XX, is I broader what reduced seen from forecast some half to that out to we’re customers their our quarter XX we really the demand end

the and QX the Specifically, was construction sectors, industrial more feel I say a and of and in kind feels one would things it second automotive of that like is the in the most of reduction communicated now. thing stable though, half that

As of to concerns on recover that those money – how thing we’re where customers work uncertainty governments economies about is, put said, one to recoveries. being the continue and year, through looking quickly and out economic drive we the that see the uncertainty rest to

John Babcock

production Thank so downtime. quickly, want But just then of has about peers Okay. you. are the to And apologies that what if question kind I significant opportunities for there and ultimately reading you’re all to your this. sort I Or these. guess how see here sure I for of read curtailed any guess, situation. and you’ve last wanted kind I I’m mills. pretty on took of just commercial here, confirm are RYAM

Paul Boynton

Yes.

continued quality particularly where evaporated the in volume, very and volume at of been our disappeared. of our level, see the viscose for We’ve to the of Let’s of let answers give the I’ll however, purity think HPC, all out we’ve And Certainly, high first all, and market. yes, you’ve talked even the capacity with actually strength two continue. well. going in, to of And start some the about products fortunate commodity has relations. Frank so come scenarios area I customer we’re lot that. as a prepared

steady across. continue to We come have orders good

specialties of assets. see supports think And when business, So the helpful. our our that’s our it customers been overall cellulose I stability

over just it these can and let Now Frank me to opportunities, comment that. of taking maybe on turn he advantage

Frank Ruperto

Yes.

supply bit market. of I important lines still step kept happens or of key caused that, the change in that it’s facilities been extent, built inventory our has John, the to to we supply the or the that it’s most to whole. closures think, after any benefit that been future. some have closures Remember will have into close relatively have and recent customers keep the supply believe tend modest relatively real some early disruptions We’ve we a seen. downtime seen what chain be in That open. and To to they it is, take call said, that lines all opportunity

said, As important to our tell place of tons grades supply commodity in quality relations Paul given premium ability become secure has the long-term ability size these all stable on source. a of that have you our many of our more to due that I and we be and we supply have. to should believe than a putting customers security of would customers that the

will us assets obviously, It’s will it side that question. recovery these the going long from but should the the be it’s forward. The how inventory really us. be – too more of and tell impact think demand So work-throughs early re is the how I some that broadly, help will just positive and for to down magnitude a

John Babcock

Okay. Thank you.

Paul Boynton

Thanks, John.

Operator

Thank you.

Steve with question D.A. from line the next your comes Please Davidson. Chercover Our question. proceed with of

Steve Chercover

Good everyone. Thanks. morning,

Paul Boynton

Steve. morning, Good

Steve Chercover

start. of couple whole a I on lumber Quebec, just province basically So takes two in In August. the holiday week questions believe to

how and the global is about will – it I going Lumber’s guys you if correct of the job? convince kind guys stay fact much and I’m Can like, to currently. you this when vacation? if production lose Like, parabolic, in on gals guess So

Paul Boynton

Yes.

it’s the off a timeframe. right passed has us. Canadian time correct You’re at background big – Obviously, that. that And your take July to now time about

our up could. and tried expecting, all running to So We We as full. substantial we assets look downtime if in we up as got did you downtown. take and Steve, what we’ve many at, right. took running April, our normal keep we’re assets

to curtailment, you of the of of year, over at but And first we’ll the quite last took the half year won’t a volume that stronger we So up come the balance as look feet a at time. that half out the have levels. we back of result year market a if XX,XXX than board

kind well we’re of of perspective, to we try it. can take we’ll to that And put just obviously but do So advantage in running now. and everything

out. our were mid-September in be we discussed, a weeks out of order significantly. to As if there we’d Right now, couple Typically, out not we’re files later.

of outside It’d years. significant to happened. of trying And market take to in change normal more the a and year, back place just of continue normal we’ve out orders seen in in capacity there. so what the strength lines, we’re of half the advantage be the in past But volume the

Steve Chercover

but board you the feet. did XXX help And if XXX kind news mean, be we like us million of flip huge year sensitivity, a leverage as north the the I just running holiday, us could give I have of and board XXX that prices up, but of Well, the not flop, of mean, QX. with good kind hue feet, of is, million in last – maybe have. gone you’re the you because

Marcus Moeltner

capacity of you look we a on Two rated are at if feet for our disclosures, shifts. mills. those lumber three mills Steve, million quote XXX of our

of month around So state million. close million with to of on we those annualized mentioned, basis, a And XX feet of a the XXX you’re if them volume. as two shift Paul at I all took

Steve Chercover

about I’m not talking are QX. prices when QX talking I’m about good.

up prices So board in XXX million – on quarter-over-quarter, thousand. feet a $XXX $XXX, you a let’s are say, get QX,

Marcus Moeltner

you they’re that. print now, look over quoted at good If those up good right the numbers, But numbers. are yes,

Paul Boynton

Yes.

are think ballpark, numbers your the I in So look, right right. Steve,

of low market. So everything push can think if got the a very coming that’s above, up quarter, the quarter, we’ll do right. there into XXX and and to take that. put inventories beyond out you million we advantage I but Try We’ve

you get right. top, in they where strike a are As we said,

trying do that. we’re to So

Steve Chercover

there acknowledgement Can first XX% over XX potential duties place. within you then, are handicap that from the months? you’ll shouldn’t recovery? duties And going the the have of the the an duties to is what as mean, the I down been chances that X% are Okay. the in imminently recover kind next they

Marcus Moeltner

October. the now. determination. September, Washington’s preliminary we’ve confirmed supposed two to monitoring, It be right, had into was Steve, And successive been delays

to messaging to to But So at take deposits to rate. And possibly some right then early again, to have time on at this would continue going those have would year, back why of cash you a end the know, depositing confirmed, the rates time that’s we’re we as resolution next which the year accrue. lower it’s file,

Paul Boynton

whether that’s going grow months timeframe in So deposited. a XX Steve, XX should months, to – but going But Steve, that be be is XX certain to we’ve it’s it’s difficult. say it time, to that in that to now right, it million continues

Steve Chercover

it mean, I precedent nice Yes, get That you is the be ultimately for that back. guys. would

you’re Okay. gears Act Well, refund bit with year. and this CARES switching tax a anticipating the to the that

confirm to that’s anything. right. a not want money, That loan COVID or is Just your

Marcus Moeltner

Steve, assistance the to to is give that obviously No. program of genesis industry.

be related that that’s XXXX to to So XXXX. carried back can non-operating losses

So a that cash cash. clearly the That’s is refund company. for

Steve Chercover

taken mill you you Okay. your high you I of where Analyst And purity Day, March for talked was Temiscaming think when instance. was reconfigured then it about I XXXX, my last did out system, think question, cellulose,

have seen cost I was and commercial So Because the I energy, anticipated cost just show mean, et the up $XX for? mainly you chemicals. that cetera, hoped thought that you wood does benefits that benefit? and/or million in

Frank Ruperto

side. the Steve. on let side, I’ll the I’ll touch on commercial touch cost Marcus

year, time. viscose pulp a basis better just And more the on the We’ve seen as clearly having commercial well we’ve to see product helpful this benefit some started operations the to reliability run we grade as changes in a into of Temiscaming side, On over mill. you’ve which other new of facility opportunities, has specialties in the started that seen move of commercial that to run been stable with as of out to light. have capacity the less that benefits

smaller So that that’s spread on a to some viscose areas. helped the of profitability And been and up pursue major Jesup has ethers weak positive. well. we’ve fluff for of other free on I’d that so a high move moving meaningful say forward this future that us move has in given part positive year had of line the how as as pulp. fluff in viscose have IV that other our moves opportunities been that and capacity And a been over also very we was realignment us sea to

So time but working it’s around, well. year date. to to grades been It this takes seen move some we’ve tangible overall, benefits

Steve Chercover

thanks. Okay,

Marcus Moeltner

Nice comments, right.

As these simplify we efficiencies obviously the facilities, wheel for for the production mill.

the that see bridge improvement we year-over-year. you look $X you if was for million set HPC, $XX Of out $XX was the in can million at chemicals So cost that about wood, and The $X grade balance a of with of million improvement an operational maybe that right, grade run, kind predictable stabilize is more of changes. million you as operation less energy. that

where that’s So that then. shows up

Steve Chercover

Okay. Thanks, guys. Stay safe.

Operator

Thank you.

Our next your Markets. RBC Quinn line with with from question Capital the of comes Paul Please proceed question.

Paul Quinn

much, very guys. Thanks Yes.

Paul Boynton

morning. Good

Marcus Moeltner

Good morning.

Paul Quinn

with start Let’s lumber.

those? I capacity three mentioned understand includes You that, two Did XXX. grade that the mills are mills on the shifts? which And

Paul Boynton

Yes.

three Sarre XXX, on and La that Paul. shifts in are So Chapleau

Paul Quinn

you’re in full right? that It’s rate now, your August is level. running confirming closer to that the basically at you’re then run on, And right Okay. XXX

Paul Boynton

at we lower level. mentioned. XXX that it, shift two The the configurations, the No, call

Paul Quinn

Okay.

running two three now shifts. La night shifts are So Sarre and or Chapleau running

Paul Boynton

Correct.

Paul Quinn

record Okay, given we’re lumber prices, for three at Is any got shifts? intention there to move that those mills, to it.

Paul Boynton

Paul, labor. the just to. Look, those would Probably constraint biggest we Yes. like communities in is both

against competing a labor We’re strong market really mining. with

to got these we’ve run safely. So assets

And them so we’ve decided it’s run optimal right two most shifts. to now

back As running we two-shift right the as switch it three. the level. we’ll at to personnel, try But can think now, right we and with soon we’re

Frank Ruperto

deployed our lines. And Paul, know, as you capital at saw strategic some we

saw lines, Cochrane. and of So new couple we got Chapleau a

volume. benefits those should we up pick year-over-year, So on

Paul Quinn

Is then Is running like running? running the your XX%? it it at I newsprint, guess, Okay. file you’re running XX%? order And it cap. it running? on to, What’s it But is where

Paul Boynton

Yes.

at look just that. Let’s

pretty lines quarter, probably Marcus? two curtailment taking there. percent got in substantial again, we’ve second So We took, out, the wise, a

Marcus Moeltner

XX,XXX. took equivalent X.X to We about months,

Paul Boynton

XX% so Yes, the quarter. second about in

bit. also a We’ve quarter little a running line This as second on come well. one line, back for

facility going of the it. stay be we to that make to that. we commented flexing to to sure black, to that kind run we optimal. we can have in We So we’re Again, make market think way as times, it’s the between shift it’s in the several going keep sure to just

times been So we’re But know, makes our the and so just the But has again, that again as flex radius us, one continue sense of that lines, in cash. down both we down we’ll There’ll that that and that’s we’ll goal. to in our you running we obviously flexible the – newsprint delivery maybe the improve. so as if is and it them so market so as we’re hit, take back our that to are black. we’ve be flex output both producing the line, adjusted run do that and to we’ll grades to some back optimize serving can stay, customers severely profitable up, don’t run markets probably

Marcus Moeltner

its And operation always the pursued. summer cap in which we shutdown, budgeted Paul, July, has

Paul Quinn

helpful. full? suspect those cap. risk got lumber that’s you’ve And to shut Okay, there not to chips mills that area the have that mills supply in I running Is because cap’s any

Paul Boynton

don’t No, see that issue. I

of do We’re very We’ve to if far, been to well out move that out chips good different facility. need there balanced when more and so forward. it have able this relationships directions comes flex to we’ll got constraints monitor in forward. a our to, we going that the going to on as continue but as one don’t I that going in an don’t Obviously, of see issue we plans it’s watch the to and issue

Paul Quinn

What anything Okay. the anything in And Is line corporate we the forward? there again is $XX million. should there EBITDA, the Is then ballooned quarter? expect just negative? going notable adjusted on

Marcus Moeltner

back you remeasurement not And in Marcus. that $X.X are certain hedged: liabilities pension, around – obligations. we’ve that. that got as Canada know, lease we came it’s as had Paul, the on on million strengthened, dollar Yes. The

Paul Quinn

Okay.

worry seeing line and which with we’re to about that So Canadian what dollar, right, then appreciating guess, I got right that’s forward, we something now? is – exactly an going

Marcus Moeltner

Yes. Yes.

what up lion’s But one caught we first our mentioned, on quarter. $XX the focus to costs. pursue as the the million So of share of reduction corporate was areas in Paul happened key of

that still we number feel on million an about annual So $XX basis. good

Paul Quinn

in it, the think while lines on about lumber lumber major Any that’s saw the just mentioned coming months? And other Okay. in. you next two six the capital coming the operations over I side,

Paul Boynton

we are we projects at quite while initiated nothing those that here this costs in some put ago for Paul. facilities improve place and referenced now, in some – all. that that works was have been But there so of to time then really year take that the And those No. There’s is of things. that advantage else had for the projects operational investment a

the So these past continuing are from year.

Paul Quinn

All right. Thanks so had. I That’s all much.

Paul Boynton

Paul. Thanks,

Operator

Thank you.

Berenberg. Our proceed next with with the of Misra question Please comes Paretosh questions. line your from

Paretosh Misra

if you Thank joint update any can on in second you. that performing? an half everyone. we all, with should us performance difference half of capacity LignoTech? that first utilization? your versus first you is think Good of? How the What’s Maybe And venture give morning, think

Paul Boynton

on African up the is, Yes. $X the asset particularly, has see referencing Thanks, We’ve Look, the loss million volume taken tighten I’m whole, volume, Paretosh. to now. the corresponding capacity bit. and there And a starting quarter. there underperformed probably as we’re that out probably our we’ve a you Florida in with into as in news there’s talked a past, it the not positive a the roll some South facility. there. has about in that, is know, running LignoTech come of that is the of supply some program expectation seen out We’ve that market, area If there, Ligno

And mainly more in So catch kind market But volumes market. levels recent past oversupplied that’s think the pricing into little time plan where of positive again, missing closer to as a expected products than, now, we a seeing up was to has slowly the now to for kind the ramping and here because an of the been, of we that are and been right bit be. to it’ll in time. I be

I we that we’re to And see volumes. going so that improved kind up improved think some the elevated comes that, I after with think And see volumes. tightening with of pricing

Paretosh Misra

than And first Or Got the maintenance the hear. half? to your it. Is in particularly on plans the or good business? side, are how outage second we second of should how half, outage in more cellulose for half think high-purity That’s that? the then there

Paul Boynton

Yes.

got And we’ve facility. guess, our outage starts It’s we weeks two September, in already coming at weekend. some Jesup. Temiscaming taking So We’ve then down. we’re Fernandina down. for a noted in taken downtime maintenance I this planned it

Temiscaming the coming Fernandina more So outages consecutive we have in months. up, two and next two

Paretosh Misra

side you one. packaging seeing Any for Got Are the it. opportunities applications? just packaging business? any I new new last guess of in And the incremental cellulose

Paul Boynton

of products real say for se. as There anybody I opportunity us, into are as don’t for a that. or into would some It’s far going not into cellulose per see Paretosh, But I a substantially volume cellulose packaging. any of small amount. significant kind that as

Paretosh Misra

luck Good guys. everything. Thanks, for Understood.

Marcus Moeltner

Yes.

Paul Boynton

you. thank Sure,

Operator

question with Spitz Please of Bank of next proceed Our Instructions] the questions. Roger line America. [Operator from comes you. with your Thank

Roger Spitz

Thanks. Good morning.

Paul Boynton

morning, Good Roger.

Roger Spitz

CapEx now? First right I your missed guidance XXXX it. off, maybe is What

Marcus Moeltner

the Yes. said the $XX CapEx a Paul for at deployment that Fernandina we year. just mentioned, on. capital. to lower previously Temiscaming as being million target year-to-date, know, Roger, our of quite prudent mentioned, it’s run obviously outages. it we’ve as rate. we’re in But coming And maintenance got completed and has our and Paul And But We Marcus. as some you correlation we is Jesup, would

So year. of half being you we’re first deploy. But we from prudent amount should on look at it certainly, that part the up as the this

Roger Spitz

in of want was it outflow. working to an like don’t provide. wasn’t inflow the what in And if I and there you in quarter. working inflow sounds capital, a guess please But Okay. capital But do, the I XXXX was probably you capital, second guidance interested of working give terms

down, I presumably, inflow. your a I all working down, it raw expect Given – capital materials volumes would and would expect

Marcus Moeltner

– drawing we it’s Marcus. inventories. on The Roger, So down again, our focused

we capital hope bring mentioned inventory that moved receivable of down the that to. and a then effectively to target So that into our And receivable. that Paul alluded lot now towards working progress we continue

moved It’s it environment, into receivable. focused this on lot we’re that. a again, difficult more So but of COVID in

Roger Spitz

is having something do in in just in ability Or use go they And customers? the ether do? might not Okay. can percent customers elect end to few in work? end specify completely to just their lastly, customers, that one grade or to it of any – hard too a customers’ don’t It’s then there But just market I our your does viscose for up from XX% that that like like pulp to other. or that? Or it out is any to to mix mean And curiosity, grade markets? CS

Paul Boynton

into Frank I’d most markets, viscose there focused tends part, well it. to And a lower shot so there. are being it textile this let that doesn’t applications. the as can well. for out at on But made most I’ll stay I’ll in different the a little move expand the It pulp, the very Yes. the part, it end. bit high say pulps take for here right? purity there, the are for and

don’t figure to we customers I one migration they how the it’s of to things try So and think can the of At our their see everything forth. to is costs. do do specialties, out lot certainly back a cellulose optimize will

So opportunities any in like that Frank? they that. But at always looking are not major expect of breakthrough I’m regard and any. aware don’t

Frank Ruperto

No, I’d agree.

is been benefits and can it significantly. think though, I applications pulp, very CLP, the arena One has to ways products performance often, always costs, and our quality has after lower-grade are that do but tend on on looking cotton up there’s find we And developing is to that lower pulps. product often in because Two alpha go market. high a CS obviously, lower-quality, customers lot that. lint input expand is, good to What of overall the more our focus to in ethers issues see used can volumes like. pop brightness and

because doesn’t share is it competitive Second from producers. not impact landscape we’re other DWP pulling the

share to very, that on focus to of of We’re viscosity do have products ours Fernandina as high and as as a well something key some that we focused pulling there, move lint, who Tartas, is developed forward, things. with very is especially cotton work from more trying out similar

that no, some typically productive. not on it’s and minor, as all it’s the that seeing are first But opportunity. an we of So question,

Roger Spitz

Got it. that. Thank you for

Operator

We have any I’d call the like of session. Boynton for to turn back our the Mr. over remarks. to end reached question-and-answer closing

Paul Boynton

everybody, our Yes. they’re milestones. your but our make for as challenging where we it. think success reaching sure action taking today. we’re to just time Thank communities ensure company, are to want a margins, you, and Appreciate These I investment

today. So you time thank again, for your

Operator

Thank This teleconference. you. today’s concludes

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

Rayonier Advanced Materials (RYAM) 5 Aug 202020 Q2 Earnings call transcript