Rayonier Advanced Materials Inc.

Good morning, and welcome to the Rainier Advanced Materials Third Quarter 2021 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 conference over to your host, Mr. Mickey Walsh, Treasurer and Vice President of Investor Relations for Rainier Advanced Materials. Thank you. Mr. Walsh, you may begin.

Thank you, Operator, and good morning, everyone. Welcome again to Rainier Advanced Materials' third quarter 2021 earnings conference call and webcast. Joining me on today's call are Paul Boynton, our President and Chief Executive Officer, and Marcus Maltner, 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 slides 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 18 through 23 of our presentation. I would now like to turn it all over to Paul.

Thank you, Mickey, and good morning, everyone. Today, I would like to hit some of the highlights for the quarter before turning the call over to Marcus to review the detailed financials. After Marcus's update, I will discuss our strategic outlook for the business. Starting on slide five, EBITDA from continuing operations improved by $3 million from prior year to $35 million, driven by continued momentum in commodity product prices, including high yield, viscose, and fluff bulbs, as well as solid demand for cellulose specialties. In addition to the improved financial results, we have executed on several key strategic initiatives. On August 28th, we successfully closed the sale of our lumber and newsprint assets for approximately $232 million, including $185 million in cash, with the remainder consisting primarily of shares of Green First Forest products. Additionally, year to date, we captured $192 million of EBITDA from these businesses prior to the sale. The company also repaid over $150 million of debt, including $127 million of its senior notes due in 2024 and $25 million of the senior secured notes. We also significantly increased cash on the balance sheet. This cash, along with future cash flow, driven by the announced price increases for cellulose specialties, as well as cash returns from our investments in reliability, cost reduction, and new bioproducts, will provide a catalyst to grow EBITDA margins, further right-size our balance sheet, and drive value to our shareholders. I'll provide a further perspective on our current markets, as well as our longer-term strategy, shortly. Now I'll ask Marcus to take us through the financial details for the quarter. Marcus?

Thank you, Paul. Starting with high purity cellulose on slide six, third quarter sales increased 35 million, or 14%, to $288 million, driven by a 14% increase in sales prices, offset by a slight 2% decline in sales volumes. As expected, CS prices were down from prior year per contract negotiations from late 2020, while the higher commodity prices drove the combined increase. Overall, sales volumes remained nearly flat at 225,000 metric tons, with a stronger mix of CS sales volumes. CS sales volumes remained very strong, driven by demand across almost all end markets, including food, pharma, casings, construction, automotive filtration and tire cord, and acetate bioplastics. Commodity volumes declined by a more favorable mixed shift towards CS, which has lower production yields, a reliability issue with our lime kiln at Jessup facility, and continued logistic challenges specifically for ocean-going sails. Overall, EBITDA for the segment declined $4 million to $32 million. Costs were impacted by significant inflation in key input materials. higher logistics expense related to trucking and ocean freight, as well as higher maintenance costs and production downtime related to the reliability issue in Jessup. This resulted in lower production of approximately 10,000 tons. Turning to slide seven, paperboard segment sales improved $5 million, driven by a 13% increase in sales price, resulting from strong demand for our three-ply Kalima brand, partially driven by competitor supply constraints offset by logistic challenges. EBITDA for the segment declined $1 million to $6 million as the sales price increases were more than offset by higher raw material pulp and cost inflation in the operation. Turning to our high-yield pulp segment on slide eight, sales increased $12 million from prior year to $42 million, driven by a 27% improvement in sales price and a 12% improvement in volumes. EBITDA for the segment grew $6 million to $9 million as sales improvements were partially offset by higher operational costs and the impact of logistic challenges. Turning to slide 9 on a consolidated basis, operating income from continuing operations improved $4 million from prior year. The company experienced price increases across all segments and volume improvements driven by mix improvement and high purity sales. Costs were significantly impacted by higher inflation costs, particularly with respect to chemicals, wood fiber, and energy, as well as reliability and maintenance costs in our high purity segment. Higher raw material costs in paperboard and overall higher logistic costs also impacted results. Additionally, corporate and SG&A costs improved $5 million, primarily driven by favorable effects. With the sale of the lumber in New Sprint, the company credit profile has improved. We ended the quarter with $279 million of cash and liquidity of $373 million, including availability on our ABL and the French factoring facility. In early October, we repaid a further $25 million of senior secured notes, and we still expect $29 million of tax refunds by the end of 2022. With the sale of the lumber and newsprint assets, we also have 28 million shares of green first forest products valued at approximately $34 million as of the end of the quarter. and the rights to $112 million of softwood lumber duties. Given uncertainty related to inflation and logistics, along with significant amount of investment opportunities, we are currently carrying higher cash balances for the short term. Overall, we remain well positioned to prudently invest in our assets and generate greater margins. With that, I'd now like to turn the call back over to Paul.

Hey, thank you. Excuse me. Thank you, Marcus. As noted on page 10, we are seeing the dynamics of uncertain markets. First, commodity benchmark prices are moderating in some of our key segments. Specifically, BEK, or bleached eucalyptus craft pulp, a proxy for our high-yield pulp business, has fallen sharply, driven by the decreased demand from China amid the governmental policy to reduce energy and emissions outputs. Viscose pulp prices have also receded recently, although prices remain significantly higher than the prior year. The strength of the viscose market, rebounding significantly off the lows of 2020, provides a strong backdrop for our 2022 cellular specialties price negotiations. Meanwhile, fluff and paperboard indices have remained resilient, with sequential increases from the second quarter into the third quarter, which should provide higher fourth quarter prices for these products, given the pricing lag we experience relative to these indices. Turning to page 11, we see demand for our cellulose specialty products strengthening across almost all end markets, including food and pharma, casings, construction, automotive filtration and tire cord, and acetate bioplastic end markets. Interestingly, Prices for cotton lint in Asia, a competitive substitute product for many of our cellulose specialty grades, have also increased substantially from 2020, creating additional interest in our product offerings. We have seen supply disruptions with some of our high-purity industry competitors, leaving many of our customers looking to us as a backstop given the size, scale, and redundancy advantages of our five cellulose specialty manufacturing lines. We are fulfilling agreed demand with customers, but given our extended outages at Jessup in both 2021 and 2022, we're not able to accommodate most requests for incremental volume for the balance of the year and well into 2022. We, like all producers, are also seeing a significant rise in input costs and challenges in our supply chain. So with all these dynamics, strong demand, restricted supply, and escalating input costs, we expect significant price increases for the majority of our cellulose specialties in 2022. Overall, we're focused on protecting or improving margins in our CS business for the coming year. In our paperboard segment, we're also seeing stronger demand from the return of the commercial print market, along with ongoing strength in the packaging market. This demand, in addition to continued industry supply disruptions, are driving prices higher. Our unique three-ply Kalima brand paperboard continues to grow and share in higher-end markets as customers value the comparable surface area to weight ratio of our offerings. With raw material costs shrinking as pulp prices decline, we expect expanded margins for this segment in the coming quarter. In high-yield pulp, we expect to recognize lower prices in the fourth quarter due to the lower demand for pulp from China. and increased supply from the South American mills, while costs are expected to increase and logistic challenges are likely to persist. So now let's take a longer view on our strategic outlook for the business. With the sale of lumber and new sprint businesses complete, we target to drive both improved costs and margins through our core businesses. Turning to slide 12, year-to-date EBITDA margins are roughly 10%. For a capital intensive business such as our high purity cellulose operations, we would expect to generate EBITDA margins at a much higher level than our current conditions have allowed. Given our specialized asset base, unique product offerings, security of supply, and technical leadership, we aim to improve our cost position and generate at least 20% EBITDA margins in this business. To achieve this goal, we have developed a plan focused on a few key initiatives. First, we've already discussed price improvements for our cellulose specialty products. With the majority of our cellulose specialty contracts open for negotiation in 2022, we expect to capture significant price increases for these products in the next year. Additionally, we expect to utilize a significant portion of the proceeds from our asset sale to invest in and improve reliability and drive costs down at our four high purity cellulose facilities. In 2022, we expect to spend approximately $100 million on custodial capital expenditures. However, with inflationary pressures on the cost of materials and challenges with labor availability, we will appropriately modulate CapEx on a real-time basis. We know that having reliable assets lower costs, increases sales volumes, and drives efficiencies. As such, we've planned extended outages at three of our four facilities in the first half of next year with a focus on improving reliability. Beyond investments and reliability, we also expect to increase our strategic investments in 2022. We are currently evaluating approximately $50 million of high-return projects for next year, including green bioenergy, cost reduction, and productivity enhancement initiatives. We've had success with these type of strategic investments, including the recent $15 million investment in green energy at our Tartas France facility. This investment went online in the second quarter and is expected to generate $10 million of incremental earnings annually. Another potential project in Tartas that is part of our green energy bio future, currently under evaluation, is the production of bioethanol, a high-demand additive to gasoline required in Europe, as consumers and governments seek to use greater natural energy to power vehicles and industry. These investments provide returns well above the company's cost of capital and will drive incremental margins over the medium term. Lastly, we'll continue to increase our investment in R&D and innovation-driven projects. An example includes our investment in Temsilk, a product used in the production of Lyocell, a natural fiber produced in an environmentally friendly method. This year, our R&D team, working with innovation trend experts, has identified areas for accelerated natural soils and biomaterials growth. We will be sharing more details of these focus initiatives over time. But two of the most immediate initiatives, however, are in bioplastics and prebiotics. In bioplastics, we are looking at a broad set of opportunities to replace petrochemicals in many applications, including single-use plastics. We are currently working in collaboration with several leading global research universities, as well as current customers and new commercial partners to capitalize on this opportunity. In prebiotics, we have partnered with the State of Georgia Center for Innervation, the University of Georgia, and the Saunders Research Institute to develop nutritional supplements for the poultry industry. Additionally, we will be looking at other growth opportunities outside of our core R&D and process expertise, but closely related to our strengths. An example is our investment in Anamera Incorporated, which has led us into the emerging opportunity for carboxylated nanocellulose, with performance-enhancing attributes for cosmetics, paints, coatings, and concrete. Anomere is ramping up the production in its newly constructed temiscamine plant and is looking to capture near-term sales in the cosmetic segments through its distribution agreement with Crota, one of the world's leading cosmetic and personal care formulators. As global demand for more environmentally friendly products continues to evolve, we are working to offer solutions from both our existing natural products as well as developing new offerings to meet growing needs. Combined, we expect these actions to drive significantly higher EBITDA to provide positive returns for our investors. As we previously have stated, our goal is to reduce net debt two and a half times EBITDA. Turning to slide 13, our net debt stands at $676 million as of the end of the quarter, including $279 million of cash. Our near-term goal is to drive this towards $625 million with cash tax refunds and proceeds from the green first shares. With our targeted margin growth and the right size balance sheet, our goal of two and a half times leverage is within range over the next three to five years. And finally, turning to slide 14, our reputation as a market leader in cellular specialties with differentiated commodities within fluff and discos markets positions us well for the future. We have diverse biofinery assets and redundancy that allows us to service all of the cellular specialty market segments while providing security of supply to our customers and offers tremendous growth opportunities into the future. The security of supply has come into play recently as many of our customers were able to rely on us to meet the strength of their markets. A strong cash position allows us to invest in reliability and cost reduction, strategic projects, and leading R&D platforms as we work with new and existing customers to develop natural-based solutions, which will further broaden our offerings into our bio future. We have a proven track record in controlling costs and managing cash to drive stronger liquidity and a more stable balance sheet. We look forward to executing on our plan to invest prudently to expand EBITDA margins, and we're excited about the bio future of the company. With that, operator, please open up the call to questions.

Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of John Babcock with Bank of America. Please proceed with your question.

Hey, good morning, and thanks for taking my questions. I guess, you know, first of all, just on the cost side, how are you thinking about the cost pressures across energy, wood, chemicals, and logistics for the balance of 2021 and into 2022?

Hey, good morning, John. I'll turn that over to Marcus.

Morning, John. Yeah, as you saw in our bridge on page 9, You know, we were indicating that inflationary pressures were accelerating through the year. And you can see on the bridge close to $50 million in costs. There's certainly some impacts of the Jessup impact in there. And as you know, the pulp costs for paperboard is really transitory as that will come down in price. But we certainly saw inflation on chemicals, wood, and energy, a slight amount on logistics as well. And I would say on an annualized basis, we're in the high single digits for inflationary pressures. And our lens, assuming these conditions remain, the same type of percentage increase next year.

Gotcha. Could you help us quantify the impact of that kiln disruption at the adjustment facility? And then also, will you have to do any further work at the mill to ensure it can run as intended?

Yeah, so John, as we mentioned, 10,000 tons. Based on your model, you can assume the fixed cost absorption on that and model that. We also had to purchase some fresh lime for the makeup and some maintenance. So with those items, I think you could probably get a pretty good gauge on what that is. but it was meaningful enough.

And John, this issue, and Marcus mentioned in his prepared comments, Lime Kiln, it is run very reliably for us for the last 10 years. We didn't expect it. We're going to go ahead and make some changes to it at the upcoming shutdown to make sure that that doesn't reoccur. But as we also noted, we've got three of our four facilities with shutdowns in the first half of 2022. And our goal, of course, is to focus in on reliability, and particularly our operational efficiencies. And we can improve upon it, particularly in the areas of our evaporators at each of our facilities. So we'll be doing a lot of focus on reliability in early 2022 to help improve our overall throughput and production rates.

Gotcha. For the kiln disruption, though, I mean, would $10 to $15 million be kind of in the realm of reasonableness there?

That's a bit high, John. Again, you're probably assuming some lost sales. We would just quantify the fixed cost absorption impact.

Okay, gotcha. And what mills are you planning to do maintenance on in the first half of next year?

Yeah, so our shutdown schedule, again, is front-end loaded next year. So first out of the gate will be Jessup in February, and that's 14 days. except it's extended for the number five recovery boiler there. So it'll extend into 50 days on that boiler vessel. And that's the reason we built inventories consciously here in anticipation of that. Fernandina is a 20-day outage in March. That's followed by Tumiskaming another 30 days in May. And as Paul mentioned, again, our focus there is on reliability. At Fernandina, it's working on the recovery boiler again. Um, and in Thomas coming, it's the number 10 power boiler, the economizer that we're focused on. And Tartus is in the back end of the year in October for 14 days. Remember it's on an 18 month cycle.

Okay. Gotcha. Um, that's very helpful. Uh, and then recognizing you're still in pricing negotiations with customers. Can you give us some senses to the primary focal points of those negotiations? And then also, to what extent have prices risen for products produced with cellulose specialties in the different end markets you serve?

Yeah. So, look, as we came out and discussed and put out there in a release earlier that, you know, we're targeting price increases 15 to 30 percent minimum. But that's on contracted or contracts allow. And we said that that's, you know, the majority. So we're going out, we're having those discussions now. A lot of it is focused around our raw material cost increases. Marcus just shared what we think those are for us this year and next year. We share that with our customers. And John, we went out there as early as the June timeframe and started talking to our customers because we don't want this to be a burden on them. We want them to have the communication with their customers about this should be a pass-through all the way, that we're all going to experience this. And those conversations have actually been very productive. And so we feel confident that we're going to get these increases. And again, I said, and pointedly on the majority. So that means we have also a minority that probably wouldn't be assigned this just because the contracts won't allow that. But overall, we feel good about the conversation. And we feel good that our customers are able to pass that on to their customers as well, because we know that they're having that dialogue. And again, we gave them plenty of heads up. And that's important to us, because this is not just shifting it to our customers. It's really kind of sharing the load across the supply chain.

Okay. Thank you. That's all I have.

Thanks, John.

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

Yeah, thanks very much. Good morning, guys. Just trying to understand the price increase on the cellular special needs business. What percentage of your contracts are up for price negotiation this year?

So, Paul, hey, good morning. We said the majority of that out there. So, I mean, you can pick that number somewhere over 50% is open for negotiations. On the balance, then, we have some that have caps on what we can do and some don't have any opportunity. But we're having dialogue with every one of our customers regardless about the burden that we're seeing here that we just shared with you that you see in our materials that cost increases. and having that dialogue with them. So we expect that, and we're getting the feedback from our customers, given where they are and needing our product, that these are price increases that we'll go through, and again, on the majority of our volume.

Okay, and then just not beating it to death, but the one-off on the lime kiln for the quarter, if I'm looking at that 10,000 tons on fixed cost absorption plus probably what you bought on fresh lime. Um, I'm somewhere in the $5 million range hit for the quarter that shouldn't repeat next quarter.

Is that, is that in line more than the range I'd say?

Okay. And then on the paperboard side, I mean, we've seen a, a number of price increases there and sort of expected it to trickle through in a Q3 here and it, and it surely didn't. Um, I guess you're expecting, uh, better results going forward with the, uh, with the drop off and pulp pricing.

Yeah, so, Paul, the paper board business, as you know, we're 80,000 tons on the open market with, you know, we've got a higher weighting on hardwood. We should see, you know, sequentially that business benefiting from lower pulp price inputs in the manufacturing process.

Yeah, I think our quarterly year-over-year was up quite considerably, Paul, some 13% if I got my numbers right. So it's moving in that direction, certainly. And again, strong demand. So as Mark said, we continue to expect that to show those type of increases going forward.

Have you guys been able to implement all the price increases announced so far? Or another way to look at it is what's left on the price increase implementation?

You're talking on paperboard or back to CSO?

Paperboard, yeah. Just sorry to confuse you. Paperboard.

Yeah. Paperboard. You kind of saw those increases starting late spring to the summer and then have been accelerating. So certainly, once you annualize all those impacts, it'll be a good outcome, I would say. We've done a good job in that. The offtake is good in all the end markets, and our order book looks good, and the pricing has been positive.

Yeah, Paul, and you know, there's been supply disruptions out there with other players, and that's kept the market very tight. And I think a key part of these increases on top of demand overall. So yeah, we expect that to continue. And that business, of course, is dependent on raw material costs of mainly pulp coming through. And those prices, of course, as we noted, are dropping. So we expect even improved margins in the fourth quarter. And I think you could look at that as being a very attractive business in 2022 as well. and we'll come out with further definition on that in our next call.

Okay, and then just lastly on your green first shares, maybe you can share your forecast on lumber prices or the value of green first shares going forward. Do you see that being something you're going to monetize in the short term or in the long term? How should we look at that?

Yeah, Paul, so, you know, As you know, you follow the market well. As we closed in August, prices dropped pretty sharply in September. But I think they've recovered pretty nicely. Everything that I'm looking at as a reference point points to a favorable market looking ahead. So we'll certainly stay close to that situation. We have the six-month fuse on our shares. And certainly we'll get smart on how to best monetize that position when the time's right. But I think the fundamentals for lumber are still very, very positive.

Okay, that's all I had. Best of luck, guys. Thanks, Paul.

Our next question comes from the line of Roger Spitz with Bank of America. Please proceed with your question.

Thanks very much, and good morning. So for those turnaround maintenance outages in 2022, Can you give us any guidance or steer on what is the full year EBITDA impact, if any, from those outages?

Again, Roger, as you know, we amortize these costs over the periods, so it tends to smooth those out. On a yearly basis, you always have maintenance costs in your P&L, but we don't give specific guidance on that. on those exact amounts.

Okay. For CapEx, do you have any guidance for Q4 as well as 2022?

Yeah, so you saw from our cash flow year to date, we're just over 60 on custodial. And we had guided in our last call and are still committed to on a net basis in the range of 95 to 100 for this full year.

So that's the expectation for the balance of the year. So I should think that your CapEx and Q4 will be $35 million?

That would be a combination of anything custodial and strategic.

Okay. And any steer for 2022, now that you're out of a number? I know that's not a big CapEx number, but.

For 22, we mentioned for custodial, $100 million, with the caveat that we would modulate that based on what we're seeing on inflation and the cost to execute those projects, and through a critical lens, evaluate any strategic opportunities that Paul alluded to in his comments.

Got it. Sorry, I missed that. And then lastly, in the press release, you talked about, related to the lumber sales, some cash outflows, the minimus, maybe $3 million to $4 million, including tax adjustments, et cetera, of $1 million, I guess. Do those all show up in Q4, or are they in Q1 next year? Or when might those hit your cash flow statement?

The asset purchase agreement statement provides for a 90-day settlement after closing for all closing adjustments. So that will happen this quarter. Okay, perfect. Thank you very much.

Thanks, Roger.

As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. Our next question comes from the line of Paritash Mishra with Barenburg. Please proceed with your question.

Thank you. Good morning. I just wanted to go back to that 15, 30% price increase that you announced a couple of months ago. Is that your asking price for that 50% plus volumes in CS that are up for repricing next year, or those are not the same things?

Hey, Piritaj. I'll make sure I understand your question. Let me answer the question how I think you're meaning to answer, and if I don't answer, just correct me. But Peritosh, we have a majority of our volume, and think of 50 percent plus, that is open for price discussions. And in that, we are, depending on the grade and as those contracts allow, are having conversations around the minimum 15 to 30 percent type of range of moving pricing up. So, you have the balance of that. So, the minority of that, that there is either price caps or there is no price allowed to move. And again, we're still having dialogue with those customers. But if that answers your question, hopefully it does. And again, I know it's a little bit difficult to model. We're in the middle of all those discussions right now, but I can say that they've been very productive because we started having these discussions in the second quarter and letting customers know that we're seeing the onslaught of a lot of inflation and we can't be trapped with it. So our goal is noted that we want to mitigate the impact of inflation on our business. And if we can, obviously, in these type of markets where demand is tight, is actually improve on those margins. So that's what we're out there trying to do is, again, we can't take the load of this on our backs. And so we've asked our customers to work with us and to work with their customers to distribute this across the supply chain.

Got it. And, yes, that was my question. So I guess as far as CS pricing is concerned, we shouldn't expect any major changes in the next quarter, Q3 to Q4, right?

No, as you know, they're pretty stable. We've got some opportunity here and there to move pricing up. But for the most part, for the year, we tend to stay relatively stable in pricing. So you'll see the movement effective January 1.

Got it. And then on... Tim Silk, maybe if you could just talk a little bit more as to what you're seeing in the market as far as reception for your product and any other color you could provide.

Yeah, sure. So, you know, two different stories here. One, the reception for our product has been very positive. We've been working with all the key customers out there. They like our product. It's qualified. So we feel good about it. We're ready to go. I think the second part of that story is that market, the market for Lyocell, has been fairly muted through these COVID times. And so, you know, I think everybody on our customer side of the equation is really waiting for, you know, the market rebound to happen here and for that to take hold. There's no one that's backed off of, you know, the potential for that to be an incremental 500,000 tons in the next three to five years. But we've yet to see that happen. And the good news is we're in very good position to take advantage of that market when it's ready to go. And that's what we wanted to do. We want to make sure we're in position, and we are, and we're going to be there to support our customers when their markets develop.

Thanks, Walt. And maybe last one. So you talked about several new opportunities, bioethanol, bioplastics, chemsilk. Which of them you think might require the biggest spending, either R&D or CapEx, next year?

Yeah, I think certainly we talked about the potential opportunity for bioethanol production at our TARTAS facility. I feel really good about that. That's a market that's already sitting out there. They are looking for non-food store source natural-based inputs to serve that market. Obviously, with a wood-based product, we were able to meet that need. And so I believe that we'll be in a position to move forward in our project in TARTAS in 2022. And I'd say, you know, stay tuned. I think we'd like to be able to talk about that between now and our next call in terms of some project development there.

Got it. Thanks, Paul. That's all I had. Sure.

Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Paul Boynton for closing remarks.

Yeah, thanks, Operator. And, again, thanks, everybody, for your time today. You know, these are – certainly there's a lot of challenges out there, but there's also a lot of opportunities, as you heard, to drive growth in our business. And for us, it creates a real excitement for Rainy Advanced Materials. I look forward to keeping you updated on our results, and we will talk to you in the near future. So thanks, everyone.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day.