Packaging Corporation of America (PKG) 23 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

Mark Kowlzan	executive
Thomas Hassfurther	executive
Robert Mundy	executive
George Staphos	analyst
Niccolo Piccini	analyst
Mark Weintraub	analyst
Gabe Hajde	analyst
Anthony Pettinari	analyst
Philip Ng	analyst
Ryan Fox	analyst

Call transcript

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Operator

Good morning, everyone, and thank you for joining Packaging Corporation of America's First Quarter 2024 Earnings Results Conference Call.

Your host today will be Mark Kowlzan, Chairman, Chief Executive Officer of PCA. Upon conclusion of his narrative, there will be a question-and-answer session. And please also note today's event is being recorded. At this time, I'd like to turn the floor over to Mr. Kowlzan. are you when proceed ready. Please

Mark Kowlzan

I'm Good Thank Financial today the of quarter Officer. for Earnings America. and and is Again, you overview And Packaging runs with and I'll then the further and our the business; glad Hassfurther, everyone, take up, and in you, turning Release an first Bob of Packaging details. we'd call things call Tom Corporation Call. who to be XXXX Tom of Jamie. who I'll questions. Chief our participating to Quarter and Corporation results, thank Mundy, then First Executive Chairman with President, on morning, And over will of Packaging wrap Kowlzan, be Mark me begin Conference CEO it America's I'll Bob, provide Vice

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

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

First were billion and $X in XXXX. sales quarter XXXX net

EBITDA for $XXX $XXX special items, in first in XXXX Total company and quarter, million million XXXX. the excluding was

certain earnings expenses accompanied Alabama related net and that were special quarter included first of primarily our the special schedules quarter items $X.XX of release. included the our mill XXXX activities. Details XXXX at items income share, per for for First the conversion in costs Jackson, of press paper-to-containerboard for both

Packaging related and $X.XX $X.XX, prices mill and and expense of to $X.XX. depreciation special primarily lower was first in $X.XX, XXXX decrease projects plant expenses scheduled first to the quarter driven higher the in quarter XXXX Excluding the capital the higher segment earnings Paper expenses compared $X.XX $X.XX, other items, outage share $X.XX corrugated per by higher segment for mix of

volumes These $X.XX. for Packaging and items by partially segment the offset Paper were in higher $X.XX segment

and efficiencies driven labor. of lower materials process very of fiber, chemicals, usages and energy, by converting good control had operating over costs also and $X.XX, other We

quarter, Although they energy prices first by offset than year's recycled prices. more higher were were lower versus last fiber

volume had primarily $X.XX for expense due we along of lower first were Packaging a of $X.XX. on results above addition, In and both to lower the share, efficiencies per management logistics the guidance lower the $X.XX, tax across $X.XX with The $X.XX strong our quarter interest converting Paper and and freight rate in and continued segments manufacturing and process cost emphasis facilities. the expenses

to the logistics operating better outage well. and mill Jackson, This scheduled costs continue cost with guidance most expenses, expenses and across even lower less we were freight Executing converting and drove the structure. of in planned persistent resulted than Alabama experience lower, outages conversion than as inflation mill the maintenance our at

exceeded of our special Throughout items sales of a of with corrugated EBITDA, excluding products last the Packaging $XXX the or at $X.X the million XX.X% first and resulted a Looking demand in of or sales expectations. million containerboard business. year's XXXX margin quarter of billion in $XXX EBITDA $X.X XX.X% quarter, of margin. versus billion

which anticipated, machines in than and containerboard to our were our at plan. month In original rather been restart conversion performance mill. addition us enabled from service we the to plants able Jackson both than had the prior operational end box to This outstanding earlier the outage execution excellent April, quarter and we our at of work the to completed high demand of the mills,

outage weeks a on a we scheduled our containerboard supply Tom, record this inventories expect these now efforts, the to turn general. time who of end filer further the the the the of and low business ended quarter. second having this targeted back Michigan do to with it sales at build the details we corrugated in by over quarter, to Despite of quarter I'll our will in levels just higher provide year. maintenance inventory for demand, With mill

Thomas Hassfurther

Thanks, Mark.

segment were one As last shipping X.X% Packaging total for quarter XX% Mark shipments first Corrugated estimates. year's workday up per up mentioned, less the and day guidance were volume with compared shipments product exceeded to quarter. our

Compared the of XX,XXX year's containerboard XXXX, first sales the quarter over the quarter up tons to of first period fourth above XX.X% below Outside volume XX,XXX per day of XXXX. last and shipments on a of quarter pre-COVID was were basis. tons

we demand quarter. as throughout this to interest continue strong momentum higher challenged although be the positive Our constant and expect the quarter, order rates other second backlog inflation, to by continues remained enter we incredibly and factors;

mix Domestic less containerboard per was total than our prices XXXX from not to in being due we recognized quarter benchmark levels increase of fourth corrugated the announced products $X.XX published prices. higher which the anticipated share, and and together slightly moved by

the per Versus $X.XX down of first share system, have the the to years, first prices box point the and compared quarter we quarter Export mix within last fourth mix is share $X.XX down incredible providing XXXX of XXXX, been the per quarter share. were and benefits. like capital plant that optimization our compared were per and focused out continuously XXXX. of to strategy prices down $X.XX and few that I'd to over spending containerboard on

profitably current of us new the desire grow and they providing and now the our turn us to we them to outlook record this has shipments this mix revenues product want on them back plant. I'll on it per demand focus our set needs service to with strategy Based grow. a pace by This for allowed to allows box has customers Mark. on for to year,

Mark Kowlzan

Tom. Thanks,

million EBITDA, and first sales $XX or margin compared $XX in Paper the XX% was items excluding at a quarter to million segment, of special or with XX% EBITDA quarter, XXXX's $XXX the million sales margin. of $XXX first of Looking of the million

both well that volume we was some towards our our exceeded XX% XXXX incremental XXXX. strong estimates, good, of from new the which XXXX. Orders customers the of above the quarter customers very of as above acquired and volume, was outage quarter from as last improved fourth Sales we guidance end XX% be mill remain prices existing enter our first the Demand scheduled moved of quarter prices sales Falls, first quarter. fourth volume as above mix the year's An XXXX, down at maintenance were International X% about by and although June. from Minnesota second slightly although paper quarter, will in mix the impacted

turn This these all began past to I'll February, across $XXX over April and grades, it X. we increases price increase our we announced a of now implementing Bob. paper on

Robert Mundy

during million, capital million expenditures primary and of dividend million. $XX $XXX and quarter payments Mark. provided by Thanks, a quarter during the of quarter of payments million. included Cash first $XXX the record The operations was totaled flow $XXX cash free cash

second at cash marketable quarter's in $X.XX now Excluding and estimated the for company million impact estimated we proceeds previously. was end revised actual invested quarter the share $X.XX share balance turn mill of revising quarter. per transaction the including mentioned the Falls moving from and of the in last liquidity spoke in revised to the The $X.XX remainder year quarter quarter, with now the International impact first on share share the we year $X.XX is $X.X the our it I'll per $XXX the per $X.XX in was over of provided impact quarter we to Jackson the outage the approximately is mill from guidance cash securities billion. Due scheduled total the the by the for Mark fourth into the conversion third and call. that per quarter and execution last the of mill third are versus on quarter, bond excellent outage call, outage The share $X.XX Mark. cost now back quarter's second per

Mark Kowlzan

Thanks, Bob.

domestic we products continued demand mix and as from Packaging will containerboard as move higher export higher corrugated higher to prices index well and as in first increase announced ahead, quarter into our the price shipments. Looking Prices in we segment, move and due the increases prices. expect our strong second and published

Orders Paper are our to in expected remain strong. segment

volumes Falls, quarter. However, mill at be during lower Minnesota the outage scheduled will the International to the due maintenance

due are in with the price this prices be implementing Although how our to recently average mix decrease published customers. the we're paper year prices to triggers contract index impacts announced slightly expected and that lower certain and increases, earlier

in to incurred scheduled wage maintenance the will improvement lower, and second we expenses outage expenses in and first and logistics Rail and benefit timing will be should due that will be weather quarters Operating the sequential primarily converting lower. rate X quarter of be and in increases first costs during mills our higher. result freight depreciation and slightly higher expense at the expenses seasonal

remind earnings higher With our call statements happy quarter. the first the these share-based I second rate that, sequentially we've constitute any tax-related items, expect the to per you compensation must made be that vests be of of entertain we of benefit will but questions, statements. $X.XX due to Finally, forward-looking some tax in Considering share. the we'd quarter the on

forward-looking on Jamie, the of could based and questions, differ company like for inherent with materially direction with results economy were I'd SEC. from on Actual in annual the risk And on and expectations statements expressed those up in report The the the current involve XX-K call and risks statements. of as Form the file to those please. identified the that, open including and factors uncertainties, projections the estimates, do

Operator

[Operator Instructions]

from Securities. today Staphos first question America Our comes of George from Bank

George Staphos

in terms what I us, the all for to talk standard guess are one so trends far had first of of of XQ? couple And and a I follow-ons. in maybe billings question, bookings you the can early the

Thomas Hassfurther

George, the the indicated a well. of earlier this call, in of very and is the we X% remainder now, strong, we're the in as script, and Tom. second as year quarter expect as Yes, bookings I strong up remain where

George Staphos

and Can to mix you bit what was? XQ about business export level, And and XQ? also don't an and integration XQ. in want relative you And can understand, talk saw the and you how talk you about absolute about we was was in your provide, of vertical to you similarly what similarly, XQ in talk can in if trend relative a third-party the your what

Mark Kowlzan

Bob. absolute. the integration I don't number... The have

Robert Mundy

around the the it slightly Yes. that, I XX%, below first fourth in quarter. think George. was integration in The XX%, And almost quarter was

George Staphos

one, I please Okay. guess I'll -- and go ahead. last the

Mark Kowlzan

you about mix Yes, to Tom, and... comment do want

Thomas Hassfurther

Are exactly of about you asking, you are asking what you Or -- mix export? George?

George Staphos

us or Really, versus and terms, terms provide in of of about I absolute XQ qualitative data XQ. much XQ sort you of directionally was either tonnage percentage in whatever tonnage, asking could XQ, was how quantitative export

been and EBITDA related for really, the than it, the operating over I'll the of shipments, of quarter. the of that mix is, turn maybe at where you trying I'm -- we're we our or loss it the all out the in and whether less to in too terms optimistic, volume, kudos just model, of least terms margin, was modeling was, to question was last to else figure had margin for, it versus something And

Thomas Hassfurther

see here time down can quarter together me in is you, is the versus Number big a Fourth quarter, export fourth basis, George. I pretty was slightly. if for it tie The quick Let indicated, one quarter this export. But as for an flat. us. on overall export real was first I

to triggers. that contract of missing $XX published year, the think $XX might you was of the published, one the downturn only bled that into on being probably the last counting we was first it took EBITDA fact the and model some because Relative and slightly course, I of were that delayed. year of $XX the of the place And was the the things margins, be in that

and amount the quite same the through not hoped of not had did So increase as price roll in the occur as because quickly the and index. we

remains to rate sticky. of COVID, inflation I of that, during just addition lot think rate at around a that having but rapid inflation inflation it's to very want slowed In remind -- you still up. there's going And I that the from noise

up. it's indicated time, until this the the $XX opposite At been in And increase. is going the has index same going direction price

the margin So I that's where think is. gap

Mark Kowlzan

they're of lot within mill things people on, I in a and business that relies just do Again costs that to mind, over paper missing box -- there's on run keep cost this. you or up. easing I the not that. people last lose mean, structure like sight elements George, services few all plant the mean, a think associated up the Bob, dramatically these of. truly, you truly comment if want general are to years, are I

Robert Mundy

gas hot, bit the quarter is Yes. a recycled all things rate are higher. the be first, -- we go rates and though the as lime, electrical into Mark, little obviously, second a board; price maybe would resins, from moving whether -- the Chemicals, plants, from standpoint, across alum, electrical fiber it not. higher starch even adhesives in the box down, even

direct the our all typically of about talk we base. again, And of only type XX% costs, about which is cost

repairs, property the as materials, taxes, have maintenance warehouse operating referenced, insurance, supplies, cost, they're services, You rent, which leases. material Mark are, XX%, other

So on they the they -- all business same eat things, there the and in us. those inflation it's have it their and pass that it. is They people constant supply don't on inflation going to

just overlooked, lot gets think, I of that a So George.

Operator

Michael next from Our from Roxland question comes Truist.

Niccolo Piccini

is Are notable markets on for there guess or demand This then board. where has you improvement and realizing Mike. the Niccolo saw sectors just lagging? across end improved Piccini I more any particular anything that

Thomas Hassfurther

I not. the it's heavier even various can significant board. When had believe you, ag manufacturing the segments, board, area, demand tell e-com, we across or the whether we improvement at improved in look the food, it across the

Niccolo Piccini

maybe recapitalizing on your some Since if up. be anything work XXXX, plants. to you following realizing good left there's of spent you do money to time there's Can deal a done? roughly just comment and there, box of always level then And it. Got

Mark Kowlzan

momentum this frankly, capitalize got started infinitum of on strategy. mill right we us. how good the X we'll will continue box to going side on opportunity to our And for X for that the base. we've provide plant opportunity That's as part ago. That's customer growth We've our years done now continue to value continue now, or the quite

And Tom, so just... again,

Thomas Hassfurther

think, to around the around reminder big mode plans to box we're capital invest we'll good customers, growth those I continue always And and that's our a customers. it's Well, that plants in are built with, and in our aligned our are benefit think a us, that customers. I

Mark Kowlzan

new think Richland, I Landisville installed corrugators. our We've on City, XX last or X the Salt we've since commented January specialty. in call, XXXX, XX and replaced upgraded new X the converting plants, I Again, machines. years, Lake completely We've Marshfield, of built

started in month. In the we up City, Salt Lake last just

one. that's So our newest

do this. continue And so to we

continue what care are. with it's again, As of on Tom -- mentioned, grow customer have all to customer the take the we we'll done it's and capitalize needs the strength. capability, But and this to

Operator

Our Weintraub comes Mark next from Seaport question Partners. Research from

Mark Weintraub

Is set? done First, that conversion? now now you are with project Jackson the fully

Mark Kowlzan

Everything Yes. X complete, project scoped ago out. that has years we and is turned had out that

over time. that we imagine, completed this going time, started completed pleased ahead and be last talked As we since. And over up I Easter, or at to were have producing extremely machine tons the day, The you we're running to well a that year, of that been day work schedule. phase before and ever just We that a week can X,XXX be I've more been expected was as doing the thought we original weeks XX-day last than originally we've the for of X X.

getting we all running rates, out stretched need the And these off production ton is everybody mill used this can we that coming produce. every to now lightweight is that but and high so And that high-performance linerboard at grade machine. good news getting

to And so expected do doing it and we everything it's more.

Mark Weintraub

on Congrats that.

with now running. up So Jackson and

tons. Maybe to is under you your production potential I for X.X be demand run million full the on assuming little there basis, what produced would quarter, the you an in a second full? think annualized

Mark Kowlzan

X-mill on a you round so. if the million going little a include to over bit million X.X basis. far run or as basis off that over is weight, good a little system, million-ton you tons. mix X system, the million on Why forward as a be If Depending -- running, million X.X X X don't the X tons, number you million grade lightweight rate you're we'd

Mark Weintraub

about specifically. But as If you're stable the environment? second at where just we're shipments higher it mean, to X% daily you daily time were business different you quarter current periods this then getting et April they of about have I in question talking I were momentum first those stronger demand And XX your seeing relative is, when I look sort of up referencing to at the Excellent. so Or April, to realize it's the that gained well. you come shipments, up your I more levels. And are still lastly, want uptick, and is at in X%, least back cetera. quarter

Thomas Hassfurther

is going rate, at us more that still of seasonality but fourth, -- the And see an we are -- the the for lesser still Mark, we It's -- up a in iffy quarters and momentum the is go of kind continue have up. take fourth it's always quarter, little third interesting then And we're versus to but a going it and year. in second which but one quarter more predictable second going because we up expect up. to going still we up. again third

Mark Weintraub

low. your quick spend one then If pretty right, I cap read And last Okay. was one. it

think first sizable it's done, full maybe are $XX now year on? in -- new the us the depending fairly What year. number, spent to spending million be going what I on monies expecting this be on were are a like or And I still with you thought you to amount CapEx? And going something maybe quarter. these if help Jackson

Mark Kowlzan

a the if come called far million in that done updates along, move the right and how $XXX invoicing We reserve give forward was that example, we opportunities Mark, an some opportunities. just timing these the as as is we'll issue projects. you level, with as in somewhere always new We July. that higher Yes. against out

update. right But $XXX we're high in we'll you again, July. change, is now, you million in so If any that some we'll And area. there give update

Operator

from our Wells And Gabe Hajde Fargo. question comes from next

Gabe Hajde

able to you that tricky question, reading, some But the to a going $XX I you're that extent we And wanted which indices basis, little expected that from -- $XX. ton try Mark, to? words, ask, sometimes. we're these going made February, are in I and a sequential had know the to the now got my comments, posted on to I kind the decouple of were call, back had we you is guess, a RISI price revisit QX to then

were feels going And all we the mismodeled price were headwind back expecting quarter. like first the so a to or it to cost what you all that maybe kind we in of squeeze relative expecting the

if that I'm we're industry. I'm analyzing to So this relative asking in curious this new blazing trails just to And when used context of proving challenging. what more is the kind of is

is say So increases. is then future asking number that and And described part about the history price that's fair price and now January appropriate something one. increase price deemed you've forward part commercially implementing to it's X again, increases, But of nominate two, But if you what to new. given you it not speaking, going they RISI do. number know what -- I that have it

Thomas Hassfurther

this Gabe, RISI. from have, you especially It's to great is relative decoupling Tom. a the question

As these call, time, again not still task, that, but and gets our to forward on our indicated reported this pressing some take going I driven what days. by what an would frustration it's with going customers' easy in last be and we're is over

least through If little of you a medium look bit to to $XXX would And through well, work after its levels. have through perspective, get continues inflation walk to you back liner need said, peak the kind a also to just recovery the from down take those place. -- came more, and you -- significant indicated, and at if we as I PCA's math

us don't have up and coaster like just they just up then get the sorts a trying -- there's these and same down of of that and if So to almost things rides, down the they then these prefer and things. they're even roller said just would and because remained that to had peak, then from customers off that

in have of over we long So fashion. much a that period -- could a and managed smoother time,

are having discussions So the of our kind we're with these customers.

contracts. remember, contracts alternatives a and we're points. different Our got long-term to trigger of customers negotiating when They times have different very you They But open are methods. different lot have these them. to are

we on are other it the at announced our that And so That's when where And get that It boxes. that's And frustration. announced us it about time. on market implemented on open increase, -- containerboard. but increase announcement but the that quite same in are wasn't and we our way, the was wasn't containerboard, reported this thing customers, we we this between point the was didn't we of talked of we part and it.

but I we you we discuss really think probably that any pricing and the you what do make of relative don't to future indication future, in to we're the -- where reminder that don't pressures going -- could future last probably inflationary and And strictly through all supply the there that place. read we taking are are it's are demand. and some -- is on increases of aren't pricing,

in lots we're as to of they just in can, have cases, some possibly we and as can't. minimize costs and do but much we Sometimes trying that costs to costs general

gives that hopefully, we good of you So a where indication are.

Gabe Hajde

if X. of in just I No, around you think I kind don't rail know, crystal -- can Bob, repricing clear. quantify, occurs for Maybe April standard and

out, of it mostly called think, truck. You around then on parent shipped converted roughly get majority X/X rail and is of rolls your I so the or product

can specifically? frame were transport maybe rail just the is So you or increases up, spend your of maybe, portion what what

Robert Mundy

I rail, believe. think or in so I Gabe, XX% total spend, like it's is

Gabe Hajde

a one, very appreciating, potentially largest competitors a required last it's transatlantic know way. sensitive but along given X you organically business Mark, are And the Again, that pursuing do I now pick the see combinations, right topic. either up divestiture or opportunity, any fact your there's to if one Okay. subjective,

Mark Kowlzan

that. take of imagine, go. But as opportunities as any regarding some they Yes. we That's comment have I I don't you place come won't along. that advantage can

Operator

Pettinari question Anthony next Our from Citi. from comes

Anthony Pettinari

kind of of -- XQ that I'm that guidance, wondering XQ able how On I think, XQ. expectations? out just coming I on get XX% right, in played costs mostly given versus and seasonal in call, the to benefits out expectations got I shook labor sequential related how back last the $X.XX where you headwind and were talked XQ and being you about think that in for, that maybe If

Robert Mundy

seasonal I we side the think, a was in think, -- think in you what onetime or of But those wage think XQ. I I XX% I I on indicated, the impact little the it was said, Anthony, like better, of cost. it on items did XQ Yes, what our played guidance,

We guidance for quarter. the those in are seeing second our

Anthony Pettinari

an just on a packagers pass-through just And contracts kind it. conceptually Got on whether or polyethylene. primary of mechanisms, Gabe's up would I'm it. of kind wondering have earlier picture, raw Got of then that's material, automatic big their get they following lot pricing on question aluminum where it passed OCC virgin automatically, too is Testliner SKUs through be Kraftliner possible makes it too that's automatic customers just pass-through or whether or structure or to something fiber? Or difficult? boxes contracts fiber there's kind there's there is more that many maybe where about of many or where just

Thomas Hassfurther

I think it's a...

Mark Kowlzan

Tom, I go want add... ahead to then and

Thomas Hassfurther

think between And sheet variance Anthony, is a I'd far the not et think lot And XXX% lot complicated I materials. liners, it's -- on have a between to of a question, performance more I in add you every in like of virgin between a than in but fair other that also and recycled there you and have cetera. technology everything XXX% of same. containerboard, lot

taking raw to So just into would that have not the or be single as that myriad your into the it's And a as things as of taken whole account. fiber just process go like that there's material. simple something

Mark Kowlzan

to type years the very don't country. that dramatically. And it moving But up Tom was a some where too back be decade up as maybe and upon time, said, down. fiber was the we're of way I paper minimal the a wanted transportation decades Yes. ago, try general mechanism. of your into to things were activity in that, again, and input would ago, is to containerboard factor forget and seeing number inflation you're just the last would a now, emphasize across tie all with stable track, world XX that it just in costs a But cost on complex around and inflationary once more ago, products in years, board move

Now -- major that transportation a significant, very component. as of the factors cost, in one major just element

Anthony Pettinari

history kind it. that wondering strong about using think to periods like was 'XXs, are trying are those the of about mechanisms kind it. inflation in maybe talking surcharges? just there pass to listed if not going pricing future at categories paper I'm other along? industry sort have where back that I'm previous actions. obviously all of been of But inflation. the any producers kind of that were Bob look things wondering used those just industry or that to the Got I'm the just seeing able of Got historically, you ways other out very of

Thomas Hassfurther

potentials, our all this in with and detail customers. again. doing Anthony, Tom is we're it We're the exploring

so time. part think I But getting it unfolds incurring. that bit where we'll of because the the all a see cost we're suppliers, And and suppliers, that's too our all our above we're side, problem we're the over we're this of learning and problem just -- all from our on getting and little from of inflation and

we're this customers. So directly taking everything our be but account, solved into will with

Mark Kowlzan

to be it say, Yes. Suffice going better far we'll off forward.

Operator

Our next Jefferies question comes from Philip Ng from LLC.

Philip Ng

of Anything help more the the even investments the I market, in little there. Has like made think Your Tom, made box than box building about out side shipments seems of some competitive you investments of area these PCA you're on you talked were It of a market want faster that kind of differentiation about take years obviously passed? handily. really kind talked faster big little momentum like been strong peers. quarter. you makes during the you you terms your outpacing call kind of in and a to grow share that's than that a you've

Thomas Hassfurther

it's the doing. And a will build embarked with right and to ourselves yes, I've many think, making our plus don't I we Well, aligned And getting what in that's about customers. that's do we've system Phil, for think invest where they no a said wouldn't need hope have aligned ourselves it. We plus. it's Otherwise, do huge properly been need invest. and to coupled more And been that's marketplaces, they it. the getting the times, us on what come. efficient, it us. with customers -- we right us question big I our -- There's

huge Now and that, demands much business I day. We're we're quality a in up to to for building helps us customers on. makes definitely addition work system think every think us, in that is product showing able fact that's and I a meet -- the what the as difference we're it, capitalizing appreciate and that a and a turn better faster our lot complete

Mark Kowlzan

and producing and so the of over we or significantly If foot the productivity per input of last labor X and years, plant back, if you many cases, out about applied one product, converting cost has of full-line cost these improved the plants. We're a every productivity on facilities and doubled a of of in box quadrupled went it we've average you and structure unit think labor product ton -- flexibility incredible box grow in where, square a very all the cost that's paper do compete. customers how now good box to these these service manner. our -- And that as it catch-up. we're very to as on not in structure we're able our of far we very mills, momentum, we're position plants, efficient our and to with in us We're good customers and again, and playing continue capability given efficiencies

said, new customer. grow as lay with has we so And in the we investments the that, just Tom

years, fine-tuning this and change plant we system and better. been made organizational within box couple do for working idea that ago, so of it this just up were but making we And came just this. we X last heavily in we decades. nothing And X doing at this going in this the we've years focused decades, been a for been to with we've XXXX. again, the We've There's with the

Philip Ng

since just were independent helpful. increase $XX a side a is I reflected $XX demand customers? the the reported question box for your little the guess, in And are got some maybe them. Do the issuing increase How the of guess trade box pricing to linerboard like perhaps proceed makers expect you a you kind only from to then, push backdrop to I That's reluctant of index, things, prices of Super. example, kind rebates given of more separately, a logistics kind to mixed normal? the publication of progressing? price And on it

Thomas Hassfurther

XX-day the in some of as will flow as have the bit that to roll We'll the XX-day into But over price box do we Relative of it, normal because to midyear. going increase, a period. a in have a share little have lion's usual, it's lag period. the triggers contracts midyear through over

some there's open not been market time, that's what incredibly going talking whole last that's to anything expect about as Relative part quite not basically like put are small did or the might about on how that, times, that's of when Y, survey for through individually out. And today. we the whatever or something. do things We I've independent frustration indication but don't indicated with we now. the or -- Because to or time. done the the case X and XX% price I we XX% work what percentages to discuss that $XX exists an those customers And what know indicated mean, I no right of hear and now. that's the -- containerboard, says or is whatever, I'm X% the model I be, And of as of what, I that. our supply/demand increase many

have So that's of to some consideration why some last I time, -- the we've mechanisms. perhaps other indicated for need some as

Philip Ng

competitors Mark, I'm the sneak had how may how and your see track Okay. If team, in industry just with merging being the larger But going are obviously I that some international. landscape and Tom X European counterparts. you U.S. the record with more has mixed one can changing do forward? proceed competitive Historically, customers a kind perhaps of of your you curious, compete you and how in,

Mark Kowlzan

to This it you as here I -- reasons. think But is for marketplace. own Tom, about change they're again, don't domestic significant do even the want comment that? doing a on it in their

Thomas Hassfurther

have our go competitors trying we marketplace, where all to do and need know to do. our to We they're or to that's at do what relative in attempting comment we and executing. what or don't on any I focus

Mark Kowlzan

the last rest Just lower keep so. States industry the XX of significantly states, in by mind, of over do here for continue in concentrated United outgrown better in XX our to doing part that. do and And the and business we've decades to continue and years, few we've that, grown the we'll we've these the we'll

Operator

from Bank of follow-up George is question America next Staphos Our Securities. a from

George Staphos

infinitum. Corp for add Mark, And that engineers Recognizing earlier focused level mill the box will the both to level. and that programs the has has you and its projects productivity, years, said, Packaging hired plant continue and the of at on team

that time Is been net Corp.'s fade the get said to Obviously, programs, fruit see in over have these lot on seeing from we've of you as you of Or and recognizing continue these rate the continue there quarter, to of they're million do to years. June any we benefit a has consumed? Packaging or should to in to programs, can P&L spending year. you're of can think expect that terms over P&L benefit return July, we'll lower-hanging continue, $XXX continue going last we basically you think update couple you -- that with I an box can the been plant same in last the this

Mark Kowlzan

That matters The hours not function week, never does technology to we company of bring we a going be issue that a a we the day, box or able that capability to real you mill X take capability operational our end. a it's bear plant issue. in If will have time, XX will a efficiently forward. not whether do, care days

on take We of to don't depend vendors our care needs.

and opportunities box with then see into mill continuously. And we opportunities an to so and improvement group identify been never needs implement group, that growing XX/X a rolls process investments, one not be plant make then but years is new or many the organization, applied, efficiency, you're engineering engineering better will of operating basis, benefits technology new together, technology can on it capital only end. able -- and and individual working relationship continue technology, are. And on this technology that's and whether just that better. our the real-time And a that on the for again, new PCA to process the and how the you they the you we they're customer And and that differentiated take now, working has that that take group the what

George Staphos

what said, the the us roughly eye, PCA, schedule year mind's or will a we've in as your in can't a to return going-forward few recognizing been you benefit the years basis the next you at X of terms now. from you see would last be Mark, on just seeing be and continue, P&L should right? that give So this as efforts In quarter, benefit years next the quarter,

Mark Kowlzan

continue Absolutely. That's the factors PCA. differentiating you type will see one of provide at to the that of benefits that

Operator

an additional Ryan have Fox Bloomberg. do question We from from

Ryan Fox

of wide quarter the fourth very saw a you that 'XX, the by broader In margin. outperformed industry we

performance. you to going a felt we're quarter, Just in the similar see first if like curious

Mark Kowlzan

in Well, our our called that out again, that had reported quarter. we the into second Tom just the trend quarter. continues fact second

ahead. go Bob, So

Robert Mundy

of No. the at come I out that our just industry versus performance. think to Tom, the mean, the referring will end week numbers, I

Thomas Hassfurther

as industry I think up outperform But the will think the be I would industry. we'll that well.

Ryan Fox

you And X a why by such margin quarters? the industry the think you've great outperformed do last in

Thomas Hassfurther

been one we've I that very is our said, Well, customers. focused existing as reason very, on,

Our CapEx has those existing around customers. been

of a And some slow were large I through we rate. really had of out of rapid have gone inventory, had coming significant very customer and they past, the destocking as they indicated base that to And some those customers, recovered recover. COVID, in at kind of a now very

improved year second, no easy 'XX; quarter had as very if mean, us at looks look at so -- And very, helpful it's the a But last look we fourth ago. so we're number you that's and our third, you And good. pretty improving. a because of I to comp secret. been very kept -- all year,

a to improving so a real keep going of but significant customers out year, this have of whole lagged got up myriad really which throughout also, we're have COVID. order we've pace, that it's we happening. But things, from to of seek some And lift the couple in coming to keep

Operator

to I'd to questions, closing comments. back for any Kowlzan, at floor the time, And this [Operator sir, over Mr. Instructions] turn you, showing no like additional

Mark Kowlzan

like with us Thank Have good forward joining results with you Take for thank I'd everybody quarter today, day. July spend then. and you later you. we and to you look at time of the give end to talking second to a care. the some

Operator

Ladies and and does thank for joining. conference you call gentlemen, presentation. We today's that complete

You may your now disconnect lines.

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