Earnings call transcript Q2 2023

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Operator

Good morning, everyone, and thank you for joining Packaging Corporation of America's Second Quarter 2023 Earnings Results Conference Call.

Your host for today will be Mark Kowlzan, Chairman and Chief Executive Officer of PCA. Upon conclusion of his narrative, there will be a Q&A session.

I'd now like to turn the floor over to Mr. Kowlzan. you're when proceed please ready. Sir,

Mark Kowlzan

I'm then Good Thank Hassfurther, with call for I'll earnings me and our further and Executive Again, you on Business; the is Chief President, things everyone, in turning who quarter Financial with the an you, questions. be release of we'll Mundy, begin Packaging Tom second and Bob, overview and call. XXXX to Bob Vice up, over and Jamie. Packaging results, details. call participating quarter take Corporation thank I'll and be the second and who wrap Chairman to the any our today morning, of of PCA Kowlzan, Mark Officer. then glad call conference I'll CEO Tom America's then provide will runs

of Yesterday, million, we $XXX or $X.XX net second quarter share. reported income per

$XXX compared XXXX Excluding income net special $X.XX was per $X.XX of quarter of or second second share. share, quarter items, net million, or the million, per $XXX income XXXX to

net sales were Total XXXX and XXXX. $XXX in in the $XXX XXXX. quarter EBITDA in was in billion million for items, billion quarter, company $X.X second and XXXX million excluding $X special Second

items corrugated per to income our products items net closure schedules conversion release. facilities both that paper-to-containerboard earnings in included XXXX the Jackson, design second Second for quarter were Alabama for the XXXX related and accompanied certain expenses and share Details of special costs $X.XX for mill the quarter and special included of at related press costs of centers. activities

depreciation driven by Packaging and earnings compared decrease share of lower per chemical volumes lower primarily $X.XX offset were second mix costs $X.XX, in other $X.XX energy and to XXXX lower Paper $X.XX. costs, and segment items $X.XX $X.XX. costs. by fiber, and for XXXX segment $X.XX, quarter driven the expense, the higher segment Lower by quarter partially items, special converting Excluding in These and higher operating Packaging the of the second primarily of price was in

prices a for tax lower share in We expenses above second a second and efficiency initiatives per Paper of maintenance quarter rate $X.XX. scheduled in operating outage lower were and had the mix expenses. from lower The results the segment higher half resulting lower the $X.XX; also and for $X.XX share, and of the $X.XX to logistics XXXX due count from repurchase for share freight resulting for $X.XX guidance primarily and $X.XX, costs lower usage

special of of Tom excluding in or and million year's XXXX Packaging resulted Looking versus million with $X.X last of quarter margin in of $XXX at EBITDA the moment. Packaging the discuss in second and EBITDA XX% expected XX% our EBITDA a was of for $XXX items will sales we business. $X.X billion the in sales quarter, where margin. further segment this about a of billion Demand a

managing items. than what As or they planned to overtime well including monitored to reducing at our and and mills as Also to less discretionary did operations running more energy our while internal usage materials extremely yields, mills, way closer nominal wood cost this and and our as usage in generation for increasing and of corrugated we effective facilities, and like balanced said our included maintenance also is other our first estimated. headcount supplies cost-effective outages pulp had employees mills our our we addition energy In spending consumption and chemical efficiently, according our executing closely reducing our board in on basis another weights, we efficient at very our supply our remain the we fiber the focused in improving as producing are demand, control. things quarter,

minimize our from ran our the logistics our certain we of addition, and rail as increases mills locations locations and system effectively rate with demand. mix in to together negative shipping changes distribution impacts the worked to plants, In and at personnel

as the This know, our not any Finally, thoughtful as with manage temporarily maintenance to you Washington in on Wallula, continue during exited remains our the potential planned supply our demand and views for monitor we containerboard we outlook to any temporarily quarter. to was but strategy the early a outage we reaction second The of curtailed our possible. year. change economically half rather approach mill along curtailed to once operations in demand, the as changes mill will this at

the business. now on containerboard turn corrugated Tom, details I'll it over who'll provide sales more to and

Tom Hassfurther

also share Export below quarter second containerboard compared $X.XX prices down the last $X.XX the were Thank where and domestic the per containerboard prices came the share below $X.XX and $X.XX per XXXX. share second per per quarter of and products down corrugated with share and XXXX. first mix XXXX you, quarter together in Total Packaging in segment of Mark. quarter prices first of we year's and versus anticipated mix to

As the shipments Mark segment Packaging also total product year's per compared down in we workday Corrugated last to quarter. where indicated, second expected. for came and quarter in X.X% volume were

Outside comparison workday below sales year's we last knew the volume shipments our period. With XX,XXX volume a quarter above XXXX. of tying will quarter first containerboard quarter second box and tons tough last this per be year's was second of XX,XXX tons record

variables persistent quarter. goods. call, we interest would impact last service-oriented to rates quarters spending, both inflation the that negatively As higher of of the continue more towards same shift few preferences said The and buying demand, impacted purchases consumer last the have consumers' quarter's and nondurable into continue on second durable

now. products and boxes has our remained Inventory bases eight index across varying row manufacturing customers' the in for our to territory in months contraction a destocking, in and customer both also degrees at continued

almost and talked However, about regarding improvements improved shipments destocking based business what as to their the compared certain second is and relative as well quarter. some to improvement X% customers' of we we boxes the quarter, on last first product inventory expected both customer helped quarter that the as feedback

day there work second less this We the quarter. positive is compared one quarter, to although expect continued momentum

turn now back Mark. I'll to it

Mark Kowlzan

you, Thank Tom.

Looking last $XXX quarter. from volume volume XX% year's which mill, XX% excluding year's million second second some remains of quarter, quarter below EBITDA second below than where million the of of segment, sales demand or a with and last XXXX. and X% over first margin $XX special EBITDA, quarter there the Jackson, less of sales was $XXX than XX% included prices Alabama sales year's second in the second with Paper at also sales our this mix Paper our no and the soft compared items XX% quarter were to for XXXX million, of quarter Paper $XX in higher margin. million was just

Paper planned We match well – with that's additional the our for to and some International mill margins for comments this demand Falls inventory in as of prepare and and during according categories, ran delivered to up the coming as third outage our balance the quarter. on I made build efficient business same Similar nine-day supply Packaging as to the remained cost-effective for operations outstanding demand many to quarter. the employees business focused maintenance outage regarding quarter the they also to supply

to over it turn now I'll Bob.

Bob Mundy

Mark. Thanks

the included and and flow interest $XXX records of with generated of we well quarter for dividends free We on securities million. during quarter common expenditures from as net cash payments the capital ended $XXX $XXX cash quarter payments of stock second the million of of For $XXX of operations quarter, million. million, $XX $XXX hand $X Key billion. of as $XX new of marketable with million, million almost million, cash cash taxes cash liquidity

to turn it back I'll Mark. now

Mark Kowlzan

Bob. Thanks,

shipping and the the from Looking business, versus into second although ahead, for the per day segment, to we Packaging our second shipments one we less move is expect quarter. as day quarter, corrugated in the third improve there

price along lower published with slightly domestic as of containerboard will prices decreases prices. lower result However, be previously a export

stronger lower declines prices expected our back-to-school volumes Paper segment seasonally index in expect shipments, recent from based We prices. trend on in to are although the

higher, should Falls, due expenses costs by per driven outage to higher by seasonal approximately International and the fiber Operating recycled scheduled converting $X.XX at prices energy share, Minnesota. outage Scheduled primarily slightly higher be maintenance cost. will trend

slightly share. tax that Finally, to quarter rate higher we $X.XX third be as the we well. depreciation and expect earnings of these Considering per estimate our items, expense

remind the Form could the that, on from call estimates, Statements expectations of uncertainties, involve on those including the some inherent with I SEC. and factors risk happy and current in risks With of on questions, XX-K and company. the report projections materially direction of that based actual those The as be any must expressed statements. were we'd and statements made to we've file results identified but differ the forward-looking And statements. forward-looking constituted the annual entertain you economy the the on in

call And for Jamie, like open please. with that, the up I'd to questions,

Operator

from [Operator Please with from George begin will America we time, first this at of gentlemen, question question. comes the Instructions] go session. Our and today Bank Securities. question-and-answer your ahead Ladies Staphos

George Staphos

find Good Mark, Bob, morning. such third and reasonable first performance tilt given probabilities vantage costs. further for quarter. that How benefits congratulations could is underway, to the and Tom, that there on guess, within that Thanks – your operating our your and that embedded upside the the the much I excellent efficiencies guidance. have in in my chance details of Is some might guidance? quarter you $X.XX point question, from performance the XQ, so or lower everyone. operating Hi, in operating be there employees all any efforts your the

your be might third benefit? And guidance? think us baked about have able quarter So what's into operations to how

Mark Kowlzan

operations can as the new And as really with have couple excellence. take capital and really always last a on projects, corporate that's thing and of continue of optimization in been performance the into execution. and of focus and now that installed continuous paid us we on on personnel see. our XXX to One were quite the we down we're this level really them last to technology George, winding are of a new year, take equipment, we going operational moving box work in do, let plants lot mills but engineers technology to the for years, XXX year, days unit group focus you as we and we on approximately major frankly, a commented improvement, a off and the lot that year XXXX

So your continue forward. see And effort. is in similar in guaranteed, results to from I Nothing expect going my do quite answer well is would general. Bob we that will perspective. Tom, we obviously perform but

Bob Mundy

say the that George, hold this performance we'll the second Yes, on perspective, from is – cost I'll really operating we in Mark, had to the Bob. it's quarter.

that the volume flat. we second, little maybe a mills to the assume relatively is per in just Yet, our stays see. up cost bit, we'll you ton similar production If that think

like up able take of end the the the though or we across quarter, will be that So on hold XX% just you prices to if quarter up average, second to higher, the that supply third from OCC moved they're know be to XX%. just even they and

that overcome we'll seasonal as have So the hits items. seasonal rates you that well as some electricity plus we usage

operating So much and the mills the we'll in box in be pretty that offsetting continuing cost effect, performance the excellent plants. by

Mark Kowlzan

Tom?

Tom Hassfurther

I Tom, is obvious and we're forward place change would as the lot to of of this that as will groundwork cost extensive going we're advantage positive. just it forward last volume take is add lot George more taken I be very able quite thing. one of our business And conditions this increase this a get this to going going in. and has dramatic, – a It's be position think,

George Staphos

Very, very Okay. helpful.

Mark Kowlzan

George just… me let

George Staphos

ahead go Mark. Please

Mark Kowlzan

one thing. me add let George

the like in one pushing and mill efficiency If were that's had just of by category, month were of you our of uptime the had I mill quarter not looked running in breaks. that looked one of XX.XX% we in at June, efficient. most efficiency, month, we at was It operational in mills. we the basically in mean, Month uptime particular we but mill, had system, and XX% we paper no you most unheard that industry. had mills our

many level are better a And not that's our to competitors and in so, there, better. but day make strive obviously of and what we're now, we do it every it's

And so I'm see results. good continue confident to we'll

George Staphos

to was, the to over Mark, if of what I that left of common whatever looking to XQ the self-explanatory, we'll third forward. then, Tom guidance remember a obviously fourth what Bob continue And to into much pricing kind or would and closures or corrugated mean, in mentioned think and were back the were Two degree, turn in the changes, last of me, and something your be what going you ones centers, rundown and it's great try how you doing? was about you you denominator, all percentage to wise quarter design some a Thank quarter? achieve I'll we for obligatory, with roughly, guys. reconfiguration that there but is when roughly, index kind it It's baked

Tom Hassfurther

we and the the we changes we're I'll been has as will And going can capital that the turn the for we're closure can sized around piece the on right we methods. continuously on listen forward. of to the efficient have and Bob make operating tried then and comment investment he But it that most over sure sure business make closure have I very take whole George, pricing as side, that efficient our part that possibly plants sense. making in to

that's announcing place But consolidation facilities in an that. it like new, process. is and ongoing the really some So, been this things is just nothing quarter. because took This and it small we're its

for us. of So, Bob? it's kind more of course normal the business

Bob Mundy

the in that the of the say, during runs were the George, first XX-day benchmark much grade think – and a it – price, second is, $XX as two on we a quarter to there ton. prices in And for impact quarter is through it period. regarding the I then the guess occurred a Yes, over pretty drops that way about

was the second bulk quarter of reflected So, our numbers. in that

the where was the in So, that and quarter impact there get $XX first if second happened what ratio sort in occurred can the of you the that with third the what drop of $XX sort Does with you quarter. price of you drop, make sense? about think in a

George Staphos

a too what be how I X%, know residual the XX%? I Yes, just I again, of left mean, in I quarter, can't to trying not would would guess ask of for be, much is how so. much you that guess I fourth be precise,

Bob Mundy

the fourth of from third. be latest For the will most quarter in will be it the drop

George Staphos

Okay.

Bob Mundy

sort what happened will impact of gave impact you the that first, And compare be, the to we you I in if like of… said, the

George Staphos

Yes.

Bob Mundy

fourth hang And no you in if sort be shouldn't yes, if – things the other should think the of – second quarter. they where the – now. mean, then, are right of in I impact see so much you an would changes, out

George Staphos

you, Thank perfect. That's Bob. turn over. it I'll

Bob Mundy

Next please. question,

Operator

Research ahead question comes from Seaport next with Partners. Our Please from Weintraub Mark your question. go

Mark Weintraub

Thank you.

quarter you challenging bracket just this on thoughts type you has projects. record your obviously in things big down year sort preliminarily of what CapEx and for next of your environment operations from for for of flow update challenging us all this coming And second First, where one is the Can CapEx remains if might year? interesting been the cash CapEx environment. after pretty those

Bob Mundy

we finish Yes, a over started over wound we thinking year in And we year down fact projects that million fruition. to million that this fully winding ago really year XXXX would that the were the $XXX about million area. getting we $XXX $XXX we already ten range, And people that be up, Mark the last million to in the in that capital actually that's were the involved were been spending. about be again we're then year that in us the XXXX capital we are. heavy capital plan. a coming talking spending $XXX last everybody would years that alerted projects had big that of – the I we And expect level, would year where and somewhere

that our looking we at number continue And that now was felt some capital $XXX along to unless that be that feel opportunities, opportunity and so we needs we opportunity. comfortable that area the in wanted million our outstanding to came the that right compelled direct will into

that now. So, luxury we have right

range and of box spending maintenance for certain a to range I along it be we're within $XXX opportunities running times improvement But is supports the business think the mills plants. on the capital and in, with in million business benefit good

Mark Weintraub

you of $XXX I to CapEx get the higher? are do that you does referencing out million runway? we've Great. operating And quarters even some couple improvements still that last start if of the quickly think pretty these the have doesn't running been still in or at seeing go

Mark Kowlzan

number every on new – on box significant of rebuilds installations, a that's the week equipment No, to execute continuing of new the lines. it. a within the of lot opportunities We're equipment production beauty modifications plants,

about, up not and OCC for of just as to in of the into at move is wound the most phase plant, mills, the of last final work machine Wallula three big stopping. that the talked work wound has the work most at year this Alabama, woodyard waiting we're up, we we the mill The Jackson, opportunity So, number Jackson.

move opportunities. provides again, in continue $XXX just But we cost can forward all barring as us opportunity, us whether And big energy are where we I to to with and really the do forward of one-off like Bob? those right labor keeps we keep or some a say, million take million efficiency, range. some opportunity of still That that these see out efficiency, this. a taking efficiency, spending $XXX opportunity, moving we – look it's customer-driven advantage this at now what capital an number

Bob Mundy

Just practices, that of capital doing related, one is as operating our behaviors, it's well. and other the is that just Mark, just the a before necessarily is within thing, of operating a watching not cost by improvement just usage, not is things lot seeing your improving things you're watching process, huge managed those it's lot upon you've capital of routines, things been and a driven, costs benefit where there it's

literally take equipment doing a moving on running. how we've this a a an Mark, now hundreds in over and the in to is of to dive of And much able we're deeper we smaller annual that slow our that. and advantage take improvements closer to had personnel make workforce look really year. every the last that areas been of are process able down, hundreds plants now can And years, of them few but and our Granted projects basis. box lot entire were we in mills projects, hundreds

from operations unit do plants make we the what organization, and converting and mills seen to what the continue And the really new technology they do? quarter them lines, the do back how we to do great tuning is second mills, and are we've looking and if all at it what example. these optimizing benefits expected the are are and at doing at the efficiency operating effectiveness projects fine a a of the now are the we'll do projects it personnel and if not, really and And stepping assessing to in expect we that, And the

Mark Weintraub

say that. Appreciate showing. I certainly it's And

if third back the sure there guess to like understood. the a to make could maintenance operating go sounded you wasn't one, pickup just from I in I going outages. like bridge So, increase any negative that second mean, costs. to $X.XX alluded I to quarter, I it And be in

Is at when we the a $X.XX a be go kind the $X.XX so the for And there maintenance. price to primarily seems on we other that off like other to variables to impact conscious high number. for if would of doing it $X.XX Because we seem that bridge? a – look that take price be are or from if $X.XX and of

Bob Mundy

Yes.

almost looked you than you hopefully prices pretty to the those maybe Mark And then energy well side, two costs close, to some fiber will the you but pretty I are there. offset is different recycle at a outages close think right just push. higher other the take it's, look bit we operating of on spoke if price little and things saying, the the items of, that if be were of the and XX% that you the delta call the in on what there a probably – at

and cents you're couple just And of with a so what left are here there.

higher timing in that service to in release, has has some about quarter in just second depreciation, from quarter, placing talked from to benefits do program. had second We third. our we the do and repeat our the the in spending depreciation based of assets that with put capital And our just that won't we the

the tax some state as stock of and some don't gave tax just side, themselves. vesting changes that items from us On a the as repeat that performance tax favorable units, law benefit were there well

items few XX other used the get that are that to $X.XX change. those So, –

Mark Weintraub

Thank you. color. the appreciate I Okay.

Bob Mundy

Okay.

Next question, please.

Operator

next question. comes Fargo. Wells from Our Please from Hajde your question ahead Gabe with go

Unidentified Analyst

give if Hi of [ph] this January trending for May? color is QX hoping taking on to the compared question demand? me bookings how this Alex could and the – Thanks I is and underlying how help about Thanks. some thinking was for Gabe. is volume in seasonality on much July can parse maybe you and you the just I And pickup out that wondering demand here. was

Tom Hassfurther

Tom. this Okay, Alex [ph] is

XX%, the bookings Our great about halfway through month up July the quarter. for start robust good is which is to we’re very

some products. The pretty a that that that's seeing over And I we're us customers lot thing destocking is very is our important and point now other want telling that are to think, with is, I this of that's out their of important.

decline translate certainly call, will that that just still We out challenging and we some quarter fourth in Florida worst is, have the some go business, ag they the citrus hopefully our predictable. season for had do more right have there which problems. volume in now would guess XXs The flooding the a of quarter this of into throughout and or some in cycle. with dealing what segments Northern and I'll it's volume. some and going So, in or terms there, the that but point pretty ahead They of and famine I – for had XXs. strawberries then still indicates wiped do Washington a has feast serious We've Eastern droughts. lot the completely out I of moisture, – caused since some a all had California, – the had they hurricanes which tomatoes We down which had also we're

that, So segment – has drag a us. that on been has been

lot high and really interest of And it's of those down sorts going dramatically, down slowed things. that a The rates now of all and COVID starts. housing building booming remodeling product was during segment with slowed on because

as – a been us that's a been manufacturers. on So as plastic single drag products that's well use

food fact The and negative up The the the impacted beverage, relative think a have going ag and for I the has second the held of us finally going have more predictability sure. those the is have year destocking – into that key the are a I have here – we'll I and point. volume. takeaway those will the significantly taken segments now are But that e-com So think on those better. that the – those – think recover this to half lot of forward segments place

Unidentified Analyst

Thanks.

Okay. on guess that up And just side, side of you I focus as maybe being question; are maybe kind a I'm about curious your of still costs pressured and cost follow the talk can which there? buckets down are some coming cost

Tom Hassfurther

on Well, fiber you're about rates concerned especially always rail, costs to continue and up. again transportation energy the rail move

seasonal So months usage. it's we'll pressure that into cost then through – energy and from it's, with usage the third getting the we go along and fourth be into – and, as the cooler with

So a always conditions, any whole input at host wood is it's depending and weather a as cost of time. on continuing so factor given happening what's your all

Unidentified Analyst

Nice.

Thank I Yes, over. you. turn it Okay.

Mark Kowlzan

Okay.

please. Next question,

Operator

ahead Phil go from Jefferies. with question. with Please comes your question next Ng Our

John Dunigan

on called of that and, pricing have maybe walking you've Phil. business? feeling pinch on just, quarters local morning, record. around customers the from Good is a of from consider Mark, seeing Tom. and customers I you Or some more John of the surprising given the Dunigan overall you're more that is shipment, This kind and it of I last the little a away Bob, bit your more solid Would guys you're generally prior? off market, box mean, is for that the few I you factor of from start track lagged pressure which out to wanted them

Tom Hassfurther

lost this one one. higher normal reasons numbers say we mentioned because had ago. significantly and businesses tough look wide business I from wide year as I XX-plus a this that mean, any even John, back but And whether then, I I'm I local, this there lost have would – back, all were couple And you that's significantly. those even the these than while just say industry And think any I trend. demand I'll of some has when segment a national of percent there were rate – we even, if do. our still or have different significantly customers, unbelievably why what of is shrunk and down so I we they're our segments like in than is at much the go COVID swath are the mentioned much down And significantly. was comps of of they significant, as that we a are come demand Tom, take during Number number haven't during because up so period. that ago a COVID they're just haven't we talking

to than, the the main industry – are than different the me So they looks lagging those – than the those much have as so are numbers probably reasons so past. why we're if it why – more look and they in the

John Dunigan

they you historical on seeing with already side. seen come these already per ton the are realized Are in with the box just erode trend? a seem maybe we've little the That's generally prices on $XX And that quicker helpful. out, Or so side? Okay. pricing bit containerboard line

Tom Hassfurther

is, what of bit I this. seeing got temper trend But be I'll little terms we're this than box say no way is worse is no, – would the linerboard medium is box trend. the to a I discussing in –

In fact, on surprised the have the we've that that been our I taken and say thing. would box medium would heard even reductions it's customers linerboard much any they've very say that And place. of observations same our side, I from what quite

John Dunigan

last box could on the quarter what get in progression the maybe of worse earnings during if that? guys help through just us downtime offset did kind had rest if breakdown a more the you one second you the call in, material just were helpful. any of give the That's that to quarter? Okay. was out from I And squeeze to seem kind there month-to-date the things demand very had Could then weakened quarter of took you seeing of and economic what you called

Bob Mundy

Our improving volume in was to was June, which pretty be expected very much frankly was with it strong. quite what we slightly

again and moved as the felt pretty saw July. the quarter that in as, we So to June we and – continuing we're good months, moved that in see through

So not sure... I'm

Mark Kowlzan

add I quite QX-over-QX Yes. that. about to up just look add continues I I – would X% just line that. were the trend would and just favorable. would We

So and beauty we – now can need we and however is on whatever done to to we cost it we'll flex the talked – and operating beauty about what of we've very that are of do the effectively. the and side the demands what

Bob Mundy

add we was be. pretty economic to that what much it just anticipated I'll And the downtime had

there change So from there – was no no we what were assuming.

John Dunigan

quarter-over-quarter? of flat percentage Does a terms that mean essentially ton in

Bob Mundy

ton basis On on it's per up. a – a per day

John Dunigan

Yes.

Bob Mundy

It's up.

I forth. about far Tom he's think as So as now some so comments and made trends seeing what

hopefully that though on means that, total can So that can hopefully basis, numbers. – realize some even one from there's in something that less be we tailwind day we our that that there could a

John Dunigan

To downtime what I economic the, a basis. meant Apologies. clarify on the was tons

from... You change were any saying there wasn't

Bob Mundy

I we'll perspective. we'll far that's to we a Well, moving in say – from That's again as see. – outages ton have but scheduled always would have because target, less a total, do

tons there, in the get of from back tons another that the second. or so day get There's third mill there's another the in so versus XX,XXX we additional so. day So an you

commiserate manage with from So, the, downtime the and that seeing we're the quarter. that we'll second just economic pickup

John Dunigan

Okay. it Thank I'll turn much. over. you very

Mark Kowlzan

Thank you.

question, please. Next

Operator

next question our Pettinari go And Instructions] with [Operator ahead Anthony from Please question. from your comes Citi.

Anthony Pettinari

morning. Good

Mark Kowlzan

Good morning, Anthony.

Anthony Pettinari

you up end. to kind course year-over-year? the month-over-month being closer up XX% talked or maybe the trends on destocking then following just that And the that – about is its you of July XX% Tom, or running discussed, maybe

you mean, terms XX,XXX your of tons In inventories, XQ. about own from inventories talked I down

comfort relative my wondering where Yes, inventories or to are of your are broadly levels those Just levels? kind questions. target

Tom Hassfurther

typically come one what we've they to – seeing starting and to most quite bit this trends seeing different I'm than relative this different a prior after we've – that past. to order there's more Anthony, destocking year-over-year. in there's numbers this predictability been the out no And had change And in customer's our COVID. big – thing no had the more from started I'm with where line all quarters but July up patterns let's, the of a trends, in Okay, these little quarter

and of the mean, of And talking July not than the about August, out feeling quarter. through you tell in these September the trends. can its don't I the kind past. better in best I'm forget, these just the you're month talking up numbers that's – about you're that's July, bookings, when trends about So I about than,

basis so be again be but but seem Relative predictable. talk to – inventories export. to our this – it's it's we're – it about seems the something around and we these didn't and target arms almost trying daily it on And these in – to global to – demand. relative seem patterns – still moving the this that change – a to Export's a more in get much and to certainly

again got I inventories feel but demand curves depending ability the we on to are. where think the what on are – and, comfortable we've some So with flex depending

Anthony Pettinari

helpful. And the year-over-year not month-over-month? Okay. That's XX%, it was

Mark Kowlzan

Yes. Yes.

Anthony Pettinari

Any matching And guess kind frame the I of impact thoughts kind decision on this line through the any Wallula of year? in go and supply as demand. Great. financial the of to then is that is with we broader to just curtailment understanding there way

Mark Kowlzan

quarter, were the into As way were of just we second running demand. mills and slowed cases the kind quarter running the many through we in our first back through throttling and

our improvement outage and into that taking we got had with and As Wallula springtime into back April we in we we didn't the see demand. the place, at were outages the time

in down. have quickly then realized them far it and very, And to position so you do our reassessed run it mills order that, was that Wallula and we to take six running And very to keep the that we take better had currently and efficiently.

So had outage. annual the – we down Wallula were for we

mills containerboard production them take and part we second up speed of and that of advantage doing being and as that's watched really situation. time in on and other the and, their that, and that, But it demand us take just for to as, idle we to So to we optimum another the the optimize by the the saw point that allowed benefit the earnings. decided work temporarily quarter mill finished curve six them

Tom Hassfurther

Anthony... Yes,

Anthony Pettinari

Okay. That's...

Tom Hassfurther

perspective take frame from you out. And ships penalty our out little, – of that more, because your up it cost the freight is just a a more you a lowest mills for the mill freight in cost and, it's Even the it's system cost and Wallula, though there highest to lower – run it from more full then where to.

freight had ton way, but that we operating probably you to operating so close will, $XX the way manage rather do it's that a tried a penalty system to of isolating by And if entire have benefit versus it Wallula. across than

Anthony Pettinari

I'll very helpful. it turn That's over. Okay.

Mark Kowlzan

please. Next question,

Operator

Kowlzan turn remarks. like gentlemen, And to over no it's questions. showing floor the any ladies to that with closing Mr. back and for I'd additional

Mark Kowlzan

third and forward to for and wrap today call, look Again thank on you talking when day. call good in Have Thank you we our up quarter our a us have joining the October. you. to

Operator

conference and ladies and We call thank gentlemen, you up joining. we'll today's presentation. for wrapping with And be that

lines. You your may now disconnect

Packaging Corporation of America (PKG) 25 Jul 232023 Q2 Earnings call transcript