Rayonier Advanced Materials Inc.

Good morning and welcome to the Ryanair Advanced Materials Fourth Quarter and Full Year 2020 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mr. Mickey Walsh, Treasurer and Vice President of Investor Relations for Ryanair Advanced Materials. Thank you, Mr. Walsh. and Ray Vega.

Thank you, operator, and good morning, everyone. Welcome again to Rainier Advanced Materials' fourth quarter and full year 2020 earnings conference call and webcast. Joining me on today's call are Paul Boynton, our President and Chief Executive Officer, and Marcus Moeltner, our Chief Financial Officer and Senior Vice President of Finance. Our earnings release and presentation materials were issued last evening and are available on our website at rainieram.com. I'd like to remind you that in today's presentation, we will include forward-looking statements made pursuant to the safe harbor provisions of federal securities laws. Our earnings release as well as our filings with the SEC list some of the factors which may cause actual results to differ materially from the forward-looking statements we may make. They are also referenced on slide two and three of our presentation material. Today's presentation will also reference certain non-GAAP financial measures, as noted on slide four of our presentation. We believe non-GAAP financial measures provide useful information for management and investors, but non-GAAP measures should not be considered an alternative to GAAP measures. A reconciliation of these measures to their most directly comparable GAAP financial measures are included on slides 19 through 23 of our presentation. I'll now turn the call over to Paul.

Hey, thanks, Mickey, and good morning, everyone. As we shared with you a year ago, given the state of many of our end markets, we had prepared for a very challenging year, and we received one, with the addition of a global pandemic on top. Today, 12 months later, I'm very proud of what our team has been able to accomplish. Despite the difficulties, we strengthened our business, improved our financials, and further solidified our status as a global leader in converting renewable resources into remarkable materials. Starting on slide five, our financial commitment to you for the year was to focus on reducing operating and corporate costs, lowering capital expenditures, and optimizing working capital, all with the goal to improve cash flow. Then, with the global COVID-19 pandemic, our team added incremental measures to meet those challenges head on. including establishing a COVID-19 task force to help us effectively navigate the pandemic and its varied and ever-changing impacts on and disruptions to our global business and operations. Securing essential operation status for each of our manufacturing facilities spread across the US, Canada, and France. Incorporating strict social distancing, sanitization, and other new safety protocols into our manufacturing operations and processes. shifting our office workforce to home. And finally, adapting quickly to significant shifts in demand for our many products, including at times producing incremental volumes to protect key customer supplies, while also taking downtime in facilities where price and demand were insufficient to meet financial hurdles. By year end, lumber markets had more than recovered and commodity pulp markets were beginning to show signs and Michael Walsh. Once again, we adapted quickly, adjusting our production to capitalize on these favorable shifts. These results are reflected in our financials. Through it all, we never lost sight of our needs of our customers, and ultimately, we exceeded our financial commitments, delivering $84 million of improvement compared to the original goal of $60 to $70 million. On page six, We hired the drivers of our improved financial results. Overall, adjusted EBITDA of $153 million more than doubled the prior year results. In our high-purity cellulose segment, despite significant headwinds on demand for commodity viscose and fluff products, initially from the Chinese tariffs and then magnified by COVID-19, We were able to manage EBITDA to only 5% down from 2019. Now, we did this with a keen focus on improving reliability through our continuous improvement processes and reducing costs. In forest products, lumber prices were a significant contributor to the positive results. In 2019, this segment lost $22 million of EBITDA. While in a gradual return to profitability in early 2020, COVID concerns forced the market into a tailspin. In April, we significantly reduced production across our lumber assets for four to eight weeks. However, demand quickly returned, led at first by repair and remodeling segment for a homebound population and then followed by an increased housing starts as consumers looked for open spaces. As the market recovered, our team did a great job of returning operations to budgeted production levels and then exceeded them to take advantage of record pricing, ultimately delivering a positive $71 million of EBITDA for the year, nearly all of which came in the back half of 2020. Paperboard EBITDA grew considerably from the prior year as softer demand due to COVID was more than benefited by lower raw material pulp costs. And while we saw ongoing weakness in our pulp and newsprint segment, we managed operations in our newsprint facility to mitigate these losses to the extent possible. The result of our efforts was $73 million of free cash flow, which we will use to invest in our business and reduce net debt. Marcus will now go into more detail on the fiscal results, and then I'll come back and provide you with an updated perspective on the near-term opportunities, key objectives, and longer-term focus before opening up the call for questions. Marcus?