Packaging Corporation of America (PKG) 29 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

Mark Kowlzan	executive
Thomas Hassfurther	executive
Robert Mundy	executive
George Staphos	analyst
Michael Roxland	analyst
Gabe Hajde	analyst
Mark Weintraub	analyst
Anthony Pettinari	analyst
Philip Ng	analyst
Charlie Muir-Sands	analyst
Ryan Fox	analyst

Call transcript

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

Operator

Good morning, everyone. Thank you for joining Packaging Corporation of America's Fourth Quarter and Full Year 2024 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 question-and-answer session. Please also note today's event is being recorded. And at this time, I'd like to turn the conference call over to Mr. Colson. are you when proceed ready. Please

Mark Kowlzan

XXXX Financial introduction, Thanks on President, Mundy, Chairman and Chief Fourth and Packaging good call. the year everyone, the CEO Vice of with today and you for Quarter I'm for me our Kowlzan, full America's call the Executive thank of participating morning, Corporation is who Bob conference Hassfurther, And Jamie, Officer. runs in Mark release and earnings PCA. business; and Again, Packaging Tom

usual, the and an call we income per reported or quarter be glad As I'll Bob, the of overview XXXX then things of quarter with $XXX fourth the million And and wrap I'll call be full to begin up, who'll take the fourth details. we'd share. $X.XX net provide over turning then questions. Yesterday, and to Tom results, further year I'll and

or $X.X compared XXXX special fourth fourth Net and $XXX quarter XXXX billion XXXX. million excluding net XXXX per $X.XX of quarter sales items, $XXX record of was in XXXX. income fourth share. were share $X.XX million for $X net fourth in special million or was the Excluding XXXX per company $XXX income quarter million $XXX items, quarter in and in the Total a EBITDA billion to

Net per share. items, special per XXXX. to compared share XXXX's and $X.XX were of we or $X.X earnings in or $X.XX XXXX Excluding also $XXX in million reported earnings full $X.X XXXX $XXX billion of million billion year sales

and release. Details for earnings $X.X and EBITDA that in total in items, were of the XXXX both special press the included XXXX. company the schedules special all Excluding were accompanied items billion year XXXX XXXX XXXX in

and remains $X.XX of as mix, $X.XX freight our higher special volume higher us These driven across $X.XX quarter $X.XX increase XXXX paper of the the per issue $X.XX. by offset volumes, quarter significant the fourth earnings in Packaging for Excluding $X.XX logistics prices $X.XX fourth items inflation prices and expenses higher and were XXXX a in segment. structure. mix Lower segment, of and by costs compared cost to and most partially the benefited in operating items, share

maintenance $X.XX were was fourth quarter other higher expense by expenses scheduled $X.XX, our Results addition, quarter to higher by outage also In were expenses and depreciation $X.XX. for the up equal guidance. were

of year's at almost sales million, EBITDA, business. $XXX record sales excluding the EBITDA items quarter XX% quarter resulted with Packaging billion Looking special $X $XXX in of fourth of million $X.X of last margin. XXXX XX% fourth versus also a margin and billion our in a of and of

of EBITDA, our our EBITDA billion Packaging The $X.X by to For full corrugated XXXX of segment spending or helping benefits inflationary and to with $X of the results impressive cost across impact with continued $X.X billion or compared XX% of plant customer sales and program excluding full billion products year the the $X.X billion year focus sales employees to a items was structure. capital XXXX margin while the XX% a of mill and our special deliver minimize operational continues sales, most service, great margin. execution

Packaging the throughout very our during seen we've in quarter. the segment remained demand strong As year,

further well. for fourth This over much day. operations outage service XXXX. I'll to plants half this also the record inventory turn will provide needed build year's the now Our corrugated first details as and us containerboard demand our all-time per of new Excellent business. as quality records mill of shipments shipments as The products manner annual sales customer our meet record will set an set and systems in quarterly plants take and shipments on total shipments day. corrugated in annual needs mill well delivered a allowed that it throughout to very containerboard records per schedule quarter total production timely place and Tom, new and ahead who annual some

Thomas Hassfurther

Mark. you, Thank

hitting Mark our and quarter shipments in of fourth year's plants third during third record-breaking resulted XXXX, above Total inventory fourth As versus our were containerboard over volume up quarter targets. day we shipments performance X,XXX shipments were of tons sales fourth for versus and mills. per continuing the X.X%. the and XXXX tons per X.X% demand XX,XXX up the was quarter year's quarter. of down quarter as previous mentioned, Outside record-breaking last strong emphasized last day year-end

share and set corrugated records products as full were the were share total prices rich versus year, of up quarter Export together prices versus less shipping Domestic fourth more quarter. prices up corrugated the XXXX. a previous third up compared which flat day compared quarter the Fourth and compared the XX.X% respectively, containerboard with mix, XXXX. and and in of well, mix per day, per and up X versus share impacted to $X.XX both customer annual the were third per containerboard quarter XXXX. quarter were the by were of quarter product per fourth For and to shipment $X.XX to $X.XX XXXX XX.X%, and mix

These announcement. unchanged. our prices demand as and $XX of to our continuing we invoicing you across purchases, accepted their according our XXXX, are been began weeks or prices X, containerboard As benchmark inflation did for prices Pulp customers XX certain postponed invoicing and least purchases month reported the of base. containerboard to were Paper indicated, have for we publication have producers paying this any higher continued most ago, and The a Pulp even to linerboard reported top that issued itself announcement. prices recent the box Week January noted and announcements. couple when, industry's have have a a aware, containerboard the We of increase to surprised increase for suppliers per that increase. avoid publication by XX% linerboard are January either price around very see recent the we've Yet makers increase market us Week price to sources our have probably recognize are Paper in left of according and ton the price linerboard to or cost medium. Industry medium ton previously that Beginning for increase and at the began $XX publication strong per the we RISI very experience not publication

risky that sample As to information we very over the entire for is industry's gathering the a the using the years, shrunk industry. that open small containerboard of opine market market the market and on conditions has believe from publication

product box comments Additionally, references the the often publication containerboard. regarding relevant prices when is

customized customer needs have in a be for prices. but different highly of only are who boxes This continues predictability their pricing and us source attributes. our know, want to you customers As not to frustration, for

As mentioned our indexing previously, been the off have prices to publication RISI moving allow. contracts we as as of quickly

for time you topic, some to will will back shortly. I'll to turn on with questions to us this we'll complete. some take and happy it Mark. be have I'm sure However, this discuss them you

Mark Kowlzan

Tom. Thanks,

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

full million margin. sales items, For sales was million the year XX% $XXX XX% EBITDA of paper a excluding $XXX $XXX million XXXX, with of $XXX EBITDA, special full XXXX with year to or million a margin or segment of the compared

third Prices fourth versus while the and up of X% third down and seasonally last mix quarter X% XXXX. quarter quarter from the XXXX, up X% was were X% last above year's stronger of from and volume year

turn shipments Additionally, of during the of we per all paper January papers effective papers, management job for and year mix all highly and optimizing employees and notified efficient operations results and with product and converting our throughout team $XX tremendous outstanding a inventory year. I'll price remain order focused quarter, last office beginning in it over increase the done customers Bob. papers. printing have the on The XX ton to to deliver cost-effective now business

Robert Mundy

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

from million $XXX million. full and cash of year operations cash $XXX with flow $X.X billion For free spending capital was of XXXX, the

million balance, Our securities, of liquidity marketable cash year-end $XXX $X.X was with billion. including

Our final recurring effective tax rate for XXXX XX.X%. was

the $XXX be approximately Regarding certain for key payments full estimate million, total upcoming items DD&A we expected $XXX in year, $XXX million is year to expenditures the range million. be estimates to million and $XXX of dividend of capital of to

outages total $X.XX. over and now repair share XXXX quarter. I'll include estimated including $X.XX share is for Compared lost net and outage costs with the of the expense interest in should back million The to of third quarter $XX The quarter, direct per XXXX $X.XX expected the a the larger first $X.XX costs, quarter days, turn year in be our XXXX, million. $XX effective current per and tax impact higher cash in our interest $X.XX outages full in volume, rate currently XXXX around planned annual XXXX in book by second, the to to the XX%. be around to in Our payments amortized in fourth estimate it we mills is all expect is number Mark.

Mark Kowlzan

our results hard along Packaging between delivered our XXXX. new our for were customers relationships in our company The corrugated many successfully production system. completed and records for employees, Jackson Bob. us and mills. outstanding Thanks, at with machine strong work In and annual throughout initiatives suppliers mill plants achieved We the segment, the of conversion and products shipment the key containerboard to for and #X other PCA

shareholders company very conservative in still of proud operations. to allocation over approach sheet, future. or and react financial and I'm grow and flexibility and maximize opportunities our billion manufacturing in running to XXXX. XXXX suppliers mix the profitable products very situations the along adhering customers strategic have and built and many high committed customers in shareholders. years. accomplishments quickly capabilities of most these the the we better We capital progress record a $X.X very employees, from as profitably paper opportunities partnerships structure, for optimize entire in matched our employees optimize channels and will packaging allow key in our capital very growth XXXX, and return distribution the us inventory, also cost-effective reflecting deliver plants the that for our of efficient to us future margins and numerous our And spending year to We towards liquidity still the we've views to saw our we've or our product our to remain balance opportunities business done of mix, our balance also with with maintains overhead our deficiency many with balanced to a to order while past. We completed in projects and returns sheet which our business ended enhancement strong strong improvement corrugated ahead the

the X with move prices counts ahead, be mix seasonally Looking assumed with into we less total our an lower be to segment, and plants Domestic as to are previously and per operating mix improved Export scheduled product first and slower, be Paper to our volume shipments corrugated records our prices expect we Valdosta, increases. operating flat. announced be and days volume from higher lower containerboard in the outages we although at will quarter products the segment, for and slightly with stable. In maintenance day. Tennessee forecast Georgia shipments our Mills. prices new volume fairly export days quarter first will prices mill X with and set price Packaging in fourth together

fiber the with across operations. a higher indirect and inflation of exception we operating prices, of expect cost direct, costs converting of most mix mill recycled fixed the along price With and

due timing-related occur these that be of the impacting costs a increase and also to energy at beginning weather yields result expenses. the seasonal taxes and due negatively items. chemical Labor benefits wood, unusually higher and costs of compensation for the addition, to for payroll new In year and will increases, cold the annual usages will items share-based

and at higher quarter freight logistics and will expense. our X mills rate of we impact First increases expect expenses, depreciation rail

to report with go on forward-looking and and assume risks the that up statements. And ahead in rate. in current for please. risk earnings quarter we the involve you like and outage economy I'd for subsequent Form of and of differ XX-Q constituted entertain results Considering expenses the and those inherent identified call and scheduled first corporate statements. factors filed any SEC. expectations but as these Jamie, questions, be happy that, slightly annual to The should and XX-K those with remind and Actual were reports that, the on items, materially uncertainties estimates, expect forward-looking the company on the questions, based be we'd the low direction a from we not Form statement tax $X.XX. With could expressed statements projections I lower quarterly Lastly, must open

Operator

Instructions]. [Operator

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

George Staphos

creating Mark, beyond our on quarters, can follow-ons. that the I is guess of terms volume that a what bookings ask and billings And a inefficiencies to last you you're of I you, little would start a we you thing Tom And of least for modeling call sort basis? talk any has should going-forward in first at and couple be influx to couple that busy seeing? had wanted you the considering over given I out how quarter of normal the been about bit of of PC and Bob,

Thomas Hassfurther

up so and billings Bookings far January. in Tom. this George, are is X%

good statements very indicated start, we well. a to our off we're as in and opening that So

of very coupled with quite caused take some a if capital we've and shipping of have that frankly, that's projects tremendous that The a that our because of have, I done handling care on good. lot lot taking our of increase, initiatives yes, it, volume you you're and cost got around. again, customers. a in the we business But So think people those has plants going inefficiencies job lot a

Mark Kowlzan

that up last the for -- at converting new side, on and year to that side. we on corrugator Lake And And then had the installations new or either of XXXX, XX within City XX operation. ready up got year. business, of we Salt pace. building then major new the then year, corrugated build this on George, converting reconfigurations pace But continue and locations. we Glendale are I accomplished mean, major lines. major we new at converting major last XX interesting corrugators, plant equipment rebuilds projects year. the around we'll continue These we're finished And George, within we installations this prior the for

So along not just capability be would last pace with the some all what short-term is doing the if us that but the benefit, years. up keeping today of we half been that We this occurs, spending hadn't there over it gives disruption dozen doing is incredible. we're

So the it's that keeps gift on giving.

George Staphos

it call you growth your out what it's what So enabling we shouldn't because answer of is -- the kind is there, right?

Mark Kowlzan

engine yes. It's truly yes. growth Exactly, the

George Staphos

all? causing some from in in teed pricing, that what the I'm had might comp. XQ be you you the on can circle particular, sequential others January? you factors. a you help input know whether because effective can't do square it terms or may and as you're incentive of since gets bit your but And up forward-looking, not when Are on talk And us what bit the effective you may are announce happened it cost January, hasn't And you you others effective. the about a little Now time or effective thinking doing about be I in giving you're or in the make with Any of an well. when when to little for then sensitive usage yet. raising that move how if delay your increases protection in it you between it are it's XQ saying terms of matter, costs, price arbiters and customers out then price at

there. questions X So

Mark Kowlzan

start Bob. Let's with

Robert Mundy

there's you if buckets -- look the to million Then seasonal through those the relative items what's George, but of timing country There's that -- then a to wage that there's cost cost mix. of weather a forth. higher, by higher this talk cold that increases typically XQ that's the at tax of went from yes, the and XQ, January. to mill sort benefits just some severe just -- movements on month the relative component. about are And of the fringe during items there of we the have, is typically we exacerbated so higher

typically converting in will say is round costs and that back So but quarters. somewhere we'll operating of $X.XX and amount third the that flip on other second cost XX% between our -- if you way, and that not numbers, the all $X.XX back totally, higher

the to in first then expect we how So that's fourth we the of expect turn of to and how what we sort around that much quarters. -- bridge subsequent

Thomas Hassfurther

Tom. is this George, Okay.

fill Let side. in if you the little can bit pricing see I a me on

the starters, we're and here. for make about medium. let's So linerboard distinction talking

right? Containerboard So we're the talking segment, prices about at containerboard, in we billing we're prices. And all raised the those

as Our They the on will invoices purchases prices, paying. customers be have doing will that and paying are we at we likewise be those those higher well. outside

certainly, that or here from United are made are may in of we -- we products that some buyer States a So is and the that as overseas grade paying a that or be States of made the go. it's in here invoices United comes because not those we're net may the specialty

right? The you So in statements, set, as things discussions is all place, I and that like in in around that is opening verbiage the that that. mentioned, and is boxes gave frustration, I related to the

aren't Now are our and said, as And still happens to box between moving our us are we what RISI. that customers. in possibly a can market and if at what's time, in we've and away and publicly a amount Those but we're long some, from market. sizable price this a lot time. I've today, relatively open increases there was a reported that a have think tied small I RISI very fast been large of do because in it's announced always and as in ways, I you very, as it's pretty we go And open back said

some So reporting and terms how I there's goes what of are. interpretations the the in become think confusion

fast we're wraps therefore, moving up a that so useful in we away forward. a question this from -- finding bit. this your vehicle less Hopefully, of And little as it can. we're as going And kind little

Operator

from comes from Roxland question Truist. Our Mike next

Michael Roxland

the year. it follow on strong and a to Mark, you operating say the currently us fair give you're Tom just Bob wanted and up. I Would congrats rate sense Can a be to at? Counce of out time you and Valdosta. the case, can over expect full demand at help us you capacity to if you which given running strong the frame that's understand you're have. And add

mentioned the you capacity operational? earnings do be you What add? incremental think You think last those they call. in will that, I projects teased do that What

Mark Kowlzan

on. the got capacity time to add We've goes as opportunity

the we Jackson provide the As of flexibility on how Obviously, we we we've But on reconfiguration. always nevertheless, said, have opportunity into big the have tons we system. a tremendous containerboard completed lot also you mentioned now. projects, how mill between right Valdosta, go of regarding X and those forward with Counce we next system timing. be what we couple years those if optimize the would

And so we as the again, tremendous how that's bring execute. something have into studying we decided to new always when We're opportunities needed. we tons they're do, that all on flexibility and haven't we system

for And high these integration projects the our our high opportunity, where beauty so growth are. we that's The and continuation the forward. in as go we return mills the of presents of demand high

you when let decisions made. we'll the get know So

Michael Roxland

I it. Got appreciate that, Mark.

can -- have or operating flex much of right be much just in now terms much is how system you ability comment system in right how rate? you seems demand? really to the now growing about the So meet where How what to

Mark Kowlzan

Yes.

within hard, some best grade -- open markets over where place we're not we when is back ability pressure running years, a always good it's got region running the -- did But to and we're on. done, buy a makes to run -- we're we've as running full mix, I'm system this the and out, say the which are room it also, optimize sense. the We just We we've again, be. to the to is going

those we opportunities. So have

squeeze and right out, opportunities So to you doing These full high-class continue with. of ways more we'll the running our we the find really and call again, we utilize system, always tons these out capacity it the ability projects. now to engage are whether

Michael Roxland

over. Got growth give expect and towards XXXX. half tougher it. it expecting probably get volume back question the sense as just last volume midyear we pronounced some then in And half, you're Can cadence Should the one comps. of and first due to a you turning before lessening maybe you more the through

Thomas Hassfurther

goes comps last the tougher year's. Mike, to you, going are tell much on, at get if the look year I'll you Well, as

we bit we volume will percentages a but -- So the numbers compared of little our to steady more. putting a as be throughout in we're have growth see already But plenty will obviously, it the in throughout move capital come opportunities on but year-over-year of some comparison year. down do continue able place continued -- that the year. when you we're growth, we of on growth board, place lots and produce as and and put projects come to things but

Operator

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

Gabe Hajde

seems numbers my in a quarter the sort -- export. on corrugated price the that you punitive of would about I'm imply Let of price of split million basis me with of which that, mix. a my ton uncharacteristic give right, and XXXX, quarterly and realization bit in how kind if of And unfavorable in PCA I'm excuse $XX a doing realization start in of operate. sequential And fourth terms would us mind, the seeing me, $XX probably math

I'm that basis have So you're And a about price QX movements in if from any QX. you on curious still XXXX in it thought from QX transpired if sequential 'XX just that to realizing way. guys

Robert Mundy

an that that is just annual move that, things it's There -- some on Bob. Gabe, some basis. does of

inventory as have and do export So thing look of the that of price XXXX. change But and for sure to the account volume. what's what's you you sort there if domestic some relative and movement you the volume said math increases you is, is at regarding to other these make

remember, was somewhere comparing the think in ton there late drop ton $XX to in year around then $XX, change. per to have increases were of it's a XXXX, 'XX. X beginning the than which you at $XX-something And a I the rather the compare to you have mid

do similar changes. say a And a in of and I like we're think way, ton. $XX sort I that's mix net that. said, your that and you to like And you So it the then mid-XXs, have look I math. at something

that product and like seasonal into it. mix mix, mix, customer things weigh have You

the price based good index you those feel we referenced. on that about changes capturing So

Gabe Hajde

avoidance you gave that guidance the and converted has the the doubt on and... for are guess I market been not announced both on increases ] corrugated us And of in the XXX -- in side? box in the embedding on first Or quarter, tons open [ you price telling included us Okay. what are include the that and you

Robert Mundy

No, some there's definitely open market.

we've increases things on year happens that down. always price As that said, box those the from what there's price or there But first some up relative effect change last regarding in immediately are things those the when side now will take quarter.

there January. So the along earlier, we picking that's Considering with embedded feel year's this RISI, January up in increases. was as from RISI of we'll it what like too, in price realize not Tom impact talking

So that bit, some well. to in little adjust our but numbers for of that a as

Gabe Hajde

Understood.

on one last And Okay. CapEx.

we are But a if that for call box adjust actually be when 'XX pencil see if probably the to I the maintenance it, I up thinking out up it a also plant $XXX but look depending on QX corrugator. a about know are it's million should and at signal was even that in modeling. I I others 'XX, be more of than how it's Glendale that think don't did what with supposed sort in think little would facility, new it's You down bit were numbers into box we for we $XXX that, up. million I to

that that on in containerboard number? debottlenecking no capacity the So side Mark, like is CapEx no XXXX, anything telling are you in there incremental or us

Mark Kowlzan

do project. on in mills. no whole There's There's Again, the going is. certainly enhance always small host work have. there one just every of we No, year projects that a to there's what we big

X laid year the the we've a years all very out at that that the X done over last that these the over last team of One to pace. conversions we've of challenges or blistering

in Now time to what we is really the have. and step optimize back

the these never from and place. the so benefits doing that on taken really such at we've the a all was getting mill and to make next drill spending conversions sure moving time down the to pace really taking all we're we And were

making what So the now and all we mills doing back we've engaging with extracting we technology organization the and can. that value is got stepping the are in sure

this good million. gives return. if far could there that box down full-line spending, big year. plant -- the Glendale -- We've also million. years XX just project And build you us We're a box that years. another number, $XX ago ready capital next if plant. broke finishing the box Arizona. And talking new So $XXX-plus years now by this we been the X year, box But for think you're ago, have is end a bought plant, Newark, in Ohio few and that plant for -- That's week, in We works the land plant. as about construction last big run the actually box the hopefully everything out as some under ground so in will you the for of and be to

that's $XXX -- -- new and the call inside. rebuild a box a we're major plant. reconfiguration major It's And plant, about we're but place Northeast. a at done this taking out There's essentially it will not another be Coast, talking right that $XXX new East major then on of that with in there's enhancement, plant also another with now. the high capital We like it rebuild

forever. another activities on that will continue There's projects, So replacements right. projects evolves, be and there's the XX just right the side the X converting big along for going probably will on line business, of out going single call year that products smaller probably the I'm within the I'll with corrugated now, the

the of out. just not good portion a small enhancing baked capital And new business, just so business capital there's capital. call that with portion maintenance. into optimization a that's of all and But growth Maintenance is along in that that

Robert Mundy

to thinking was it question relative down. expense, And maintenance Gabe, on your the

in indication an If something outages expensive, of for And normal year, quarter's not versus was the reality days relative and more plan about are question what with year's But what we down things. days outages. from had One was on more is larger you're more regarding in last what's call, mills couple was there to of XXXX. have as larger last this forth. a our recalling we the it is plan so so there's more down a XXXX mills

The and part XXXX, were then other in the 'XX, 'XX, the of half of running all for first to certainly still of demand. -- is thing we taking the second first XX quarter of in

So of you way outage your per downtime, those and market in variances the wouldn't lie bucket the profit the have we you downtime not we and if in had because ton market include you market in you're maintenance kind anyway. would couldn't sort your you're downtime ton of you a that of -- outage sell our for

So impact variances about up your talk those this none that negative shows -- in of year, that the of whereas that. we we have volume

that profit reason it's every if if XXXX, relative that ton our in ton per another is that's going you So follow higher -- to calculations me. That's down. for outage

Gabe Hajde

detail, I Ohio. I the you do. guys Thank for the all and appreciate investment in

Operator

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

Mark Weintraub

So how the been fully price upside extent be really -- how the part for your higher can is the that's understand year come to that incorporated initiative understand much through January, to there announced would of of increase balance a price gets box -- in as could the trying implemented. increase the of guidance? Just if XQ much to us just would containerboard trying you help the prices additional

Thomas Hassfurther

timing the Mark, contracts relate is RISI. to a What that to Tom. left that this Yes, it's we have is relative happens especially issue,

what to and to business, comes roll the in we noncontractual a it those between boxes. us first we is to however again, right of now and amounts conservative -- quarter take our sorts those are implementing when we're putting to relatively how and would ahead contracts So through. approach But in place. customers going things the those got

-- of take it of left got those we up, referring I out to a said, we contracts. And that those tied to different price the things that index some index. those we've indicates of what with But the trigger going our agreements publicly that is rolls and think So the announce medium -- some won't and And that don't come you're liner index a some rate. those through at customers. I is like what's really

Mark Weintraub

is, price really whatever in ask question to would another to expect what I'm would potential provided trying to in the an get say you RISI so that's versus significant ask. fair maybe upside way it the if the the you is on question have same publish how again, and beyond So didn't March, reason, XQ, -- the for can if increase what impact containerboard or a you February then that guidance but

Thomas Hassfurther

pretty Well, approach again, a here. I said, taking conservative I we're mean, as

So I forward? indicated it RISI. about question is is in there's no there this once upside mean, going Yes.

Mark Weintraub

the Or like indexes or Just what Or then be of it costs of able And type like being give help you to each customers is more terms things negotiation to color in any Okay. like pricing, et begin understand variables it tied in us in various off put and time? we want cetera? or future, happen to the to kind might forecast can of of that? process in is what as to to being the moving place? are us just a your

Thomas Hassfurther

with -- little be more as frustrated bag. a and to a going -- been process, very of it's so it's have have The this our I probably mentioned be mixed customers we. going very, Well, to

to any So there day, out -- indicator come end at found of that discussion the going about the other and with. what's a There's an we customers more not I -- that with pricing forward agreement comfortable feel and we to. with our of happen think going it's we've

our it's discussions about per have -- forward. in So the little discussions to with gone little but we where be end I going different going our think a it's going well. be very up I to think to going but that feel comfortable customers it's to a to And customer, take going unwind time we're very

Mark Kowlzan

in the expect pressures. they the our benefits undergoing terms undergo customers, we are capital that understand quality appreciate do, and same inflation they return we for cost talking and we're of spending and every same the for on-time a and They incredible that day. delivery. spending. our capital They also appreciate the customers Mark, what provides capital spending The about we

-- a one So is truly there's customer-driven discussion one. on that discussion

Operator

Pettinari Anthony from comes question next Citi. Our from

Anthony Pettinari

the of Just And the of you just for to kind turnover to it customers move X% question, off possible off XX%? customers percentage magnitude, customer Mark's then take it following contracts, is up index? of how might it majority given what of maybe of or get large RISI? on of Is like say long order a

Thomas Hassfurther

-- didn't endeavor it this year X Anthony, start started a ago. the did ago, years Well, about

to long, to stated some we've as mean, for -- relationships. we've many, is time I this So times, got customers is with this going these decades, and And I of those many long-term take are said, contracts, we've some unwind those long-term dealt obviously, contracts.

our as those in very we're what of that doing So we're sensitive we're making and best forward. interest the and ourselves move customers to we is sure relationships,

is it's unwind. So going take take is we're a place sequentially give time going percentages this here, little this to but some in moving of how going fall to but direction. you not time, to going to to into that I'm

Anthony Pettinari

plant is $XXX call to box others to X two, million? being switching those million, Ohio Coast. just maybe or And $XXX and whether project, in -- East big Glendale say the would there the of projects? it that what then Ohio, any you And how especially reconfigurations to X it's million big Glendale CapEx the of box then are $XXX talked much you possible large plant that component out, or about guide, the as of Is

Mark Kowlzan

Yes, hold on second. X

Probably year. this $XXX Let is me that get numbers some going million here. to

Anthony Pettinari

Got it. largest Ohio greenfield Is the Got it. the [indiscernible]. or roughly

Mark Kowlzan

that's that's million $XX project projects was -- XXXX, Yes. plants about opportunities. is corrugated the allocated $XXX a this for that million the in $XX another our And see -- million a -- project year $XXX the also I we'll that was to one mean million again, of that remind it's number. again, discrete the for to growth reconfigure there's and just there's you, of X to of

that's our again, capability So with on enhance capital going of customer. to the is work to most spending and market go the to

Thomas Hassfurther

you, -- expanding with that hopes that of opportunities said also base more have. many we doing we've and get many, place. remind times, any the in as these sorting the customer that me we're existing growing not let or growth These Anthony, are And business. This is

Operator

question comes from Our Jefferies. from next Ng Philip

Philip Ng

all to with come help Phoenix, I know growth Exciting projects. on, was the times think how I late I us Mark, kicks least XQ, perhaps the scheduled XQ. think, plant Arizona box in. guess, contribution these at through

the going in other projects probably Ohio. you we you've see actually size to line? that's XXXX year? Or So the could a accelerate that contributing year, growth. called Help out, drop of could reconfiguration is be what of us event Do more but any this this where to bottom this the

Mark Kowlzan

run within different the start project And project spring that X to But done of years. most business the business, will effective Arizona for speak. should the not scheduled. the neighborhood, take It's the run we've been new we've business. of so Yes, Phoenix the place that to of is a up running -- locations kind out been to operating a X way in

plant high-efficiency all new will this allow to state-of-the-art, consolidate so us one the operations And operation. to

the to and existing see immediately moving In again, terms don't we'll right we exit give quality you not be system add will accretive capability when And -- labor triple production the are now plant operation. it's operation. of this from or the down and cost but region the a it of new the tremendous coming employees quadruple immediately year. I'm going there unit number, to structure, the -- Probably of out efficiencies. plant. the on bring old attempt the operation and it efficiencies, I the we of X to into over this the will

Philip Ng

ramp-up other of these New the And projects Jersey, some the reconfigurations... called you've of out,

Mark Kowlzan

provide and York those of incredible once years us. will the that going XX of, doing next more for suffer of they're then spoke that for while Pennsylvania -- little disruptive New a a are projects them. again, the bit on, opportunities I But they'll be spoke Tom you project type pain type and of of you're and that done, they those There's projects

Philip Ng

color timing Mark? of on that 'XX... a ramp, the any that Is But

Mark Kowlzan

this Well, out get bugs running just and of them get the finish we'll year immediate those see them we'll and again, again, then also. out projects worked those then and benefits get

Thomas Hassfurther

lot a of a more efficiency X-building been more of couldn't in lot of this we footprint one didn't in, of us for where the provide give one. for satisfy of bit I'll want different it into a projects, talked projects, to smaller in operations building you gives more and operation be us especially business customers of including inefficient consider about I to lot footprint also, closures this. plants Yes. us in a able more us to mentioned, numbers and will we've a base. terms forget as got that of will to earlier very reach in, agreements just with to us But our in more Phoenix importantly, lot large supply create them had some those want that consolidate capacity when -- a that, This have couple supply haven't addition, Ohio a them, do same, to which markets can who any mean, consolidate is customer us a terms we're I these including that we -- a don't a have of things reach. that because things that and we these Philip, one lot where lot the like box -- in add little plants, us opportunities. And efficiency Mark but

Philip Ng

for a guys far. box And is demand Do things. a momentum that think so marketplace January then into about in seen help as a the called disruption Can you share share sounds gain recovering, gains on of thus just guys? you you're the you it's year market market, should year? from we of still the shipments of far the see you standpoint, share, that's some you're mean and of some lot taking 'XX, how have us I side through brown a some of making. momentum catalyst clearly that obviously in this with terms in consolidation you've this. big outpacing out Like like certainly in driver is the continued but the opportunities it think this

Thomas Hassfurther

the I because best to traditionally, things you their customer that we we sole just grow that that's I corrugated changing couldn't incredibly continue got a plans. many cases lot think, customers. got best to suppliership we're our -- with -- of supplier, time. things we're base, done consider mentioned and you base. that. I around game your a business those our for And I lot and split of just the reliable anybody to reliable, they the And like customers great opportunities yourself great But Well, as the core in volume. proving position and and said their comfortable get a for in we're we best internal dramatically times, service about supplier our -- many have presents and it customers think if And we're business. of position partners other quality there And as we've most supplier customer the business over

for I rapid got see -- others flexibility that's that some to a So fortunately, some financial the I And gives it. think maybe forward. be those to a nothing expand can at to opportunities do rate to we've but be going able solid things advantage. us and runway competitive quicker do able than

Philip Ng

or much think Then 'XX? be you about year guy you one it. when a a anticipate side. Tom, on good one. quick bad Got drag Mix was mix guy Do of last brown the modest

Mark Kowlzan

Well, had that quarter, frankly, was there more in quite impact a e-commerce lot we activity, fourth quarter. in That's now. mix the the fourth done

earlier call And think that improved expect mix XQ. the so during I richer XQ versus made the was comment an we

half mix that more then fourth better quarter, And see the the this expect. so year year. And I as e-commerce rolls on, see the through of probably we'll we'll again, first into

Thomas Hassfurther

think what mix to is pretty I Yes, been. compared always steady our it's

Operator

from BNP from Muir-Sands Paribas. Next question comes Charlie

Charlie Muir-Sands

could the Just to for overall year. I expenditure. you maintenance this an returning be to CapEx budget you if considered would as wondered how generic much us capital within the give estimate to

Robert Mundy

our spend. about Typically, this total -- Charlie, of runs is that's Yes, XX% it XX%, Bob.

I about think it. think a good probably I'd say to but Year-to-year, way different, that's just it's that's...

Mark Kowlzan

projects... discrete we've year, few a This got bigger

Robert Mundy

less. little [indiscernible] a

Mark Kowlzan

to fortunate X earlier, said sure But basis, as the maintaining percentage going less the because a preservation. stay the the just is opportunities of discrete have. towards on good that top of not -- done of job With and on over side yes, asset going growth it's we've been we the packaging got We've on bulk we will business. continuing I a the our assets be going this maintaining in make year and the of big to spending it -- what decades, projects we've

up. catch playing not we're So

Charlie Muir-Sands

is wondered, impact called Very basis year. was the severe just sure you as And cold on was if a out, costs impact makers it on just you, adverse some as last that last But well. box weather more called some I January year. as weather see an the think QX in But not clear. something but weather recall the I there pretty that out XXXX, Yes. I'm of you're than quarter-on-quarter or also about that I talking more here you incurring challenging other

Mark Kowlzan

Yes.

just snowy a here, not the Let south wrapping of of me month comment normal deep very and we've had weather colder had and weeks weather severe more January, and then we've the but region. of fill. through Obviously, weather, severe gone but Bob we're we've up just can couple

As a down to you along Interstate way XX shut week, the Coastal for Florida know, the from over all area, days. Gulf Houston last couple was of all

that's disruptive. so And very

and material raw general wasn't actually in impacting just and it usage consumption commercial but it cold was the yield, whether business impacting So energy activity.

it's particular, conditions. very had week, So running well, some Operationally, again, be these general, well. running that will there more a colder -- under And to impact with in again, we in But expenses saw We're the well had weather. last there volume a winter cold impact we just run weather. volume right we're from now. but

Operator

from from Bloomberg. Our Ryan comes Fox next question

Ryan Fox

think, I could was asked a it maybe he way. this I question, different it. asked clarify you but hoping Gabe,

margin So help ton of the understand you ton creating produced that? it is per you like is $XX if down looks at while how the revenue index in 'XX about do -- even per versus about How look a we us up $XX. ton 'XX $XX 'XX, a can about

Robert Mundy

again, -- that that Run Ryan. say

Ryan Fox

even down If year-over-year, the index for we is compared $XX containerboard. produced gone about revenue to number tonnage, at up ton, while has per the that over look

Robert Mundy

it's are a down $XX which you period are you -- Ryan, period talking Which talking ton? gone about that

Ryan Fox

'XX. to 'XX

full 'XX year to So year 'XX. full

Robert Mundy

-- adjust to But doing, you not you using think you're closer you inventory so I'd have but Well, probably say for $XX, ahead. I Yes. it's account produced $XX, tons, change. to directionally, go if what

Ryan Fox

even Okay. over was price I containerboard $XX. the years, the if just those about look X I last light of on the that there at And that guess end realized in at slide were But $XX -- fact X there up. for a averages that's year for you just increases look 'XX.

be how prices than going. $X figure but a direction So there's less just we of where -- where going a opposite are index could differential maybe in bit that, I square I'm that? it the the call there's trying about do out little is the to it

Robert Mundy

a export that. going -- in at volume -- there's period, was in definitely that It's I also And there's way during Yes. of down. good looking you're chunk that think export the export is

So that's bit. into sort of getting a your little math

things of how as to on that index sort you some if accommodate change think think we're that would expect well based I for moves. right where we there I as and some inventory thing be mixed

Thomas Hassfurther

basis a different just working to if we And situation don't the we let me another way MSF. And in sell add this, -- on down MSF, because trigger tons. actually element going sell weight is its if that's tons, too, to

they industry sell whole a But we an could And we a have subject MSF. into. that sell so get And something again, here is got tons. And we've even there's is again, that's go of -- variables that here, lot that this. don't we which measuring another into

factoring variables have consideration. taken be a into So that a everything you're to and of go around ton, that lot there that into when are

Robert Mundy

Yes.

the -- lastly, late Just it down that with 'XX way all then, good Ryan, that's and of overcome the know, all Prices our part since you've the into at 'XX to a but down throughout that. $XX box of started all affects -- prices $XXX as was the come end way moving and -- you decreases. got those 'XX just up those

taking and tons. when what to the high-level just revenues the doing, it's they you're way the a of timing start it's the way which is So by sort just things -- impacting appear,

Ryan Fox

you've your containerboard box how or customers Are about customers a the bit talked is for My question customers. are you referring you little to frustrated. other

Unknown Executive

Both.

Ryan Fox

Interesting. Both.

to market 'XX. last -- on would guess be we're in doesn't nearly why prices Help pay overcapacity. new going with I Okay. X such I to mill, they tons question. higher open for understand, mean an maybe I to the Why mean, in U.S., me containerboard pace export rates about operating a XX%. have the wanting million somebody would who be are

Thomas Hassfurther

of You'll have the to tons, calling don't tons. sell you're it customers sell ask see but it them. going measuring We to terms that Again, you in any can our MSF. to something tell don't same I way I'm you're that out. we refer

large my what's the is you marketplace projected to So is There's relatively in XX% of in their on there is that disconnect can a everything example. of produces opinion, exists for and give a really mill numbers. particular large what produce going and producing another they terms about mill. out in there's I'll what that output

And produce although different to very some are buy realities boxes and market, open type we the as projections did customers we've be the that can well. the tons and need So we our property of the tonnes the the very that not If require difficulty exist, have I buying would relationships some that. tons. do able limited those to is relationships long-term in to had

Ryan Fox

mills. it's be going where in going the Is contribution on to with a hour thing with continue weight? lighter that that in that you're Obviously, future some basis definitely to the Is see your that creates a the Yes. lighter dragger? per to disparity machine

Thomas Hassfurther

just call it's Well, of fact I I wouldn't it a a think drag. life.

Mark Kowlzan

run a product more I the And the grade mix making say, less efficiently. more investment We're of much that's I mean, it mills fiber. becomes capital decade to is an on over opportunity. last lighter part these weight with

capability. profitability mill And the and hasn't so impacted it the mill

I I out think time, was know of we're there but question. I know X more

George question think a Staff have George. I on, still if may had you're

Operator

Yes, sir.

from George the Our follow-up Staphos. next is question

George Staphos

try Mark. I'll it make painless, to

consider $XX, up a to discussion, pretty where tonnes fourth back last last recognizing this year, quarter price up drop the and look wrap ton. building much you're fact year, And we you're its you are price and mix, you saying quarter all They're prices is when Is entered down. expect when at Just be. up They're produced. look about statement? we fair not that you're year, from that a what at that to the fourth the

Robert Mundy

a $XX we're mid Yes, go the closer say something ahead. $XX, to my in $XXs George, rather math, but I would than ton,

George Staphos

Understood.

capital where over question look the we inflation? I more per Okay. the had, been to aside higher time, And that fact from productive, it's when then are other the trending more efficient. fiber, ton, cost a steadily amount you most cost spending seeing Because become are you of at good despite

at are looking Where and efficient. per right bend don't on basis? you that going cost going-forward return ton. you time, curve will So What bad your the what the to do you more are capital on so that your the over being you kind most history you're spend on have on products coming of cost about take dollars, do -- pressure seeing way a back

Mark Kowlzan

a factor. has fiber the glaring over of less obviously energy become is a forget, quarter, don't component. first time, For But

of example. of all medical all element. is that got benefits, You've labor your another Transportation

on general, out again, taking increases, called rail earlier. We've in rail the call this place All quarter. of increases dramatically. services your the is up in everything service got expenses, this significant first We lease all taking costs, place

certainly your And not able to it to overcome in of helps position, so the fortunate all maintain but us ability effectively it are our capital, is that inflation. we spend the fact

you probably very program the why stay with have very, that's energy a capital of now the so spending ahead here. have curve to And effective right big. to price along But is

Robert Mundy

will first even look costs, the your energy, quarter, inflation across to. to, up. in types as below year. the with of biggest increases for mean, be be. the those pretty things In Mark price direct referring the you But was we're items us the stay throughout use. items, those chemicals, seeing And where will Mark and far the board, chemicals chemicals I to as is your but George, Yes. at in just all the we That's seeing the We're that going much direct majority hit as of are alluded

George Staphos

labor be can't given It which and also medical necessarily. you on services, the control rail, to means expense you need inflation

factors. got very very But.. next You've box about be that various those put you so very, optimize that strategic you where to plant precise, around

Mark Kowlzan

we about we to X years are. what now, And X over of I what that's -- the doing. last It's do gained or spending we've especially we've allowed where and do the are and activity mean George, from the been be that's this X the us benefits think immense. that rate last years,

Now across take continue we'll is this good doesn't of inflation continue with spend. It capital comprehensive to you this going we're board. news matter at pace, the much advantage and But to this. how nevertheless,

all see appropriate never you pricing, things the unless You keep will I think -- you can't inflation. Jamie, wrapping of up. that with be may up

this. want conclude to If you

Operator

see there additional I questions. Absolutely, do Mr. no are that Kowlzan,

at you time. have any this free If proceed closing comments, feel to

Mark Kowlzan

day. Thank for you, joining April. Bye-bye. end forward good I talking us, everybody, everybody with and look of Have the to at Thank you. a

Operator

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

may disconnect You lines. your now

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.