Rayonier Advanced Materials Inc.

Good morning and welcome to the Rainier Advanced Materials Second Quarter 2022 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 Rainier Advanced Materials. Thank you. Mr. Walsh, you may begin.

Thank you, Operator, and good morning, everyone. Welcome again to Rainier Advanced Materials' second quarter 2022 earnings call and webcast. Joining me on today's call are Delisle Blomquist, 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 ryamglobal.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 the 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 15 through 19 of our presentation. I would now like to turn the call over to Delisle.

Thank you, Mickey, and good morning, everyone. I'm excited to be joining you on my first conference call as CEO of RIAM. Though new in this role, I have been with RIAM for eight years as a director of the company's board, including as the chairman of the board since 2020. Before my tenure with Ryan, my career focused on improving the financial performance of legacy companies in the chemical and industrial sectors. I have experience in many functions and roles, including finance, sales and marketing, distribution and logistics, production, strategic planning, and general management, including as CEO. Because of my tenure on Ryan's board, I have been involved with creating our strategy, which calls for us to improve our balance sheet, from our global leading position in high-purity cellulose and expanding our capabilities into other bio-based solutions. As CEO, I will continue the near-term focus on EBITDA, increasing cash flow, and reducing our leverage. Turning to page five, we continue to make important near-term strides that will help us realize our strategic objectives. First and foremost, we are focused on opportunistically refinancing our senior notes, which mature in June 2024. To put us in the best possible position to accomplish this objective, we seek to improve our credit metrics via EBITDA growth and debt reduction. In the quarter, we sold our remaining ownership in Green First Force products for $43 million and then repaid $20 million of senior notes. Subsequent to the end of the second quarter, we also repaid $10 million of debt in Canada. We will continue to look to reduce our debt balance through the remainder of the year as opportunities arise. To drive EVA dog growth, our second area of focus is increasing production and sales volumes by increasing mill reliability. The extensive plan maintenance outages that we completed at all of our facilities in the first half of the year were focused on improving productive manufacturing time, which we expect will increase production and economies of scale. leading to increased sales volumes and improved financial results. Our third immediate area of focus is receiving fair value for our unique product offerings. Demand for our products remains strong. With respect to our commodity products, we are capturing value from the current market strength. Regarding our cellular specialty products, we negotiated significant price and volume increases for 2022. And as we saw cost inflation accelerate, We implemented a $146 per ton cost surcharge effective April 1st and have maintained the surcharge as inflationary pressures continued. Most recently, we are implementing a 20% increase on the small sales volume of cellulose specialties that are not under contract effective August 1st. Going forward, we are also updating the language in our standard cellulose specialty contracts that will allow us greater pricing flexibility to more effectively manage cost inflation within a contract's term. Finally, we are effectively responding to the current inflationary environment and supply chain challenges. As noted already, we implemented a cost surcharge to help offset the extraordinary inflation we are experiencing on key input cost. We are also exploring all avenues to help offset these significant increases specifically seeking alternative supply options in wood, chemicals, transportation, while we're also managing our discretionary spending. For example, specific to transportation, we are leveraging multiple shipping channels, carriers, and shipment modes to reduce shipping delays, maintain reliable services to our customers, and manage the logistical costs. Turning to slide six, I'm going to provide a summary and the financial results for the quarter. Sales increased 17% from prior year to $399 million, with price increases across all segments driven by strong demand, including a 20% increase for our cellulose specialty products and a 25% increase for our paperboard products. Our consolidated adjusted EBITDA was $34 million, which was flat to the prior year as the price increases and cost surcharge offset the extraordinary inflation to our cost. Additionally, high purity cellulose was impacted during the quarter by the completion of the extensive planned maintenance outages at three of our four facilities. Corporate costs were higher than prior year, driven by a loss on the sale of their green first shares and higher stock compensation due to CEO transition, with a partial offset from favorable foreign exchange rates. Overall, improving sequential financial results allows us to update our full year 2022 guidance to exceed $160 million of EBITDA. Now I'd like to ask Marcus to take us through the financial details for the quarter. When Marcus is finished, I will then come back to provide additional perspective on the business and our market outlook. Marcus?