Rayonier Advanced Materials Inc.

Good morning and welcome to the RIAM third 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 RIAM. Thank you. Mr. Walsh, you may begin.

Thank you, and good morning, everyone. Welcome again to RIAM's third quarter 2022 earnings conference 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 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 materially differ 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 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'll now turn the call over to Delisle.

Thank you, Mickey, and good morning. I would like to start today by providing an update on our near-term initiatives, as well as some financial highlights for the third quarter, before turning the call to Marcus to provide additional details on each of our businesses. After Marcus's update, I will come back and provide additional perspectives on the business and a market outlook before opening the call for questions. Let's start by turning to slide five. We have made very good progress against our near-term initiatives. Our top priority remains the refinancing of our senior notes, which, as you probably know, mature in June 2024. To put us in the best possible position to accomplish this objective, we are working to improve our credit metrics via EBITDA growth and debt reduction. I am pleased to report that we have improved our net leverage to 5.1 times by reducing net debt by $16 million and growing EBITDA by $35 million in the third quarter. We will maintain an intense focus on improving our net leverage metric in order to give us the best opportunity to refinance our debt prior to these notes becoming current in 2023. Our EBITDA growth has been driven by success in three areas. First, as we discussed in our last update, we completed extensive planned maintenance outages at all of our facilities in the first half of this year. As a result, we are now realizing improved productivity and reliability, leading to lower unit fixed costs. We believe that we have further opportunities to improve the performance of our facilities, which will likely generate even better results in the future. Our next area of focus is capturing fair value for our unique product offerings. Generally, demand for our products remains strong. We are capturing value for our commodity products from the current market strength. Regarding our cellulose specialty products, we negotiated significant price and volume increases for 2022. And as we saw inflation accelerate, we implemented a $146 per metric ton cost surcharge effective April 1st and have maintained the surcharge as inflationary pressures continued. More recently, we implemented a 20% increase effective August 1st on the small sales volume of cellulose specialties that are not under contract. Currently, we are in negotiations with our cellulose specialty customers for 2023 pricing with the objective to fully capture the fair value of these products. Our final area targets responding to the current inflationary environment and supply chain challenges. While inflation remains persistent, we have a multi-pronged approach to help mitigate these pressures. As already noted, we implemented a cost surcharge to help offset this extraordinary inflation. We also are leveraging our scale, managing discretionary spending, and decreasing the input material usage to reduce our cost. Additionally, we are seeking alternative supply options in wood, chemicals, and transportation, including utilizing multiple shipping channels, carriers, and shipment modes to reduce shipping delays, improve reliable service to our customers, and manage our logistic cost. Let's now turn to page six for an overview of our financial performance. Our revenues increased 25% from prior year to $466 million. As a result, our price increases in strong demand across all segments, reflecting a 25% increase for our cellular specialty products, inclusive of our cost surcharge, and a 34% increase for our paperboard products. Adjusted EBITDA for the quarter was $68 million, up 106% from the prior year, as the price and volume increases more than offset cost inflation. Increases from prior year were led by our high-purity cellulose segment, which delivered $53 million of adjusted EBITDA in the third quarter, an improvement of $21 million, or 66% from prior year. Paperboard delivered $15 million of adjusted EBITDA, which was $9 million, or 150% favorable to prior year results. driven by strong demand and higher prices. High-yield pulp contributed positively to the results with $6 million of adjusted EBITDA. Corporate expenses improved $8 million from last year, driven by a change in valuation of the green first shares, which negatively impacted prior year results by $8 million. With these strong financial results in the third quarter and a solid outlook for the fourth quarter, we're increasing our full-year 2022 guidance to now exceed $175 million of adjusted EBITDA, an increase of $15 million from prior guidance. Now I'd like to ask Marcus to take us through the financial details for the quarter. Marcus?