Rayonier Advanced Materials Inc.

Good morning. Welcome again to RIAM's first quarter 2024 earnings conference call and webcast. Joining me on today's call are Delisle Blomquist, our President and Chief Executive Officer, and Marcus Moltner, 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 RIAM.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 relief 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 of our presentation materials. Today's presentation will also reference certain non-GAAP financial measures as noted on slide three 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 20 through 25 of our presentation. I would now like to turn the call over to Delisle.

Thank you, Mickey, and good morning. I'll begin with the financial overview for the first quarter of 2024. Following that, I'll discuss recent company actions before handing over to Marcus for additional details on the business segments in our capital structure and liquidity. Following Marcus's comments, I'll come back to share additional details on our initiatives and guidance for 2024. This will include updates on the suspension of the operations at our Tremiscamine HPC plant and the sales process for the paperboard and high-yield pulp businesses. We will then open the floor for questions. Let's turn our attention to slide four, where we'll discuss our first quarter performance for 2024. The results exceeded expectations with an adjusted EBITDA of $52 million, a $1 million increase from the same period last year. In the high purity cellulose segment, EBITDA rose by $6 million, driven by higher prices for cellular specialties, along with a decreased cost for key inputs and logistics, as well as improved productivity. This increase was somewhat moderated by reduced sales volumes, lower prices for commodity products, and the absence of energy benefits that we anticipate we will realize later this year. Conversely, the paperboard segment experienced a $1 million decrease in EBITDA, primarily due to lower sales prices, although this was somewhat mitigated by decreased costs for purchased craft pulp. High-yield pulp business saw a $8 million decrease in EBITDA, largely due to lower sales prices, though this was partially offset by increases in sales volumes and reduced logistics expenses. Additionally, corporate expenses improved by $4 million largely driven by a favorable foreign exchange impact. In summary, the overall solid performance was underpinned by strong results in our core cellulose specialty segment and cost reductions across the enterprise, which more than offset the softness in paperboard and high-yield pulp segments. In terms of cash flow, there was a strategic use of cash to build finished goods inventories in anticipation of the planned annual maintenance outage at our Jessup plant. In subsequent developments, we have announced the indefinite suspension of operations at our Tumiskameen HPC plant. The suspension is expected to provide marginal positive EBITDA benefits and enhance our consolidated free cash flow in 2024. I will share more about the financial implications of this decision after Marcus's comments. This month, We also announced a significant transaction selling the rights to our softwood lumber duty refund for $39 million. The sale not only bolsters our financial flexibility, but also aligns with our strategic goal to reduce our debt by $70 million in 2024. Considering these updates and our strong performance in the first quarter, I am pleased to reaffirm our full year EBITDA guidance of $180 to $200 million. and to raise our full year adjusted free cash flow guidance to $80 to $100 million. With that, I'd like to pass the meeting over to Marcus to walk us through the financials for the quarter. Marcus.

Thank you, Delisle. Beginning with our HPC segment on slide five, quarterly sales declined by $67 million, or 18% to $307 million. Overall HPC pricing declined 2%, driven by a 2% increase in CS sales price, which was more than offset by an 11% decrease in commodity pricing. Total sales volumes decreased 17% as a result of a 16% decline in CS sales volumes and an 18% decrease in commodity sales. Increased sales volumes in CS were supported by the closure of a competitor's plant in late 2023 and a rise in ether sales. This was more than offset by destocking in certain acetate products and the impact of a one-time favorable change in customer contract terms from the previous year. The decrease in commodity sales volumes was primarily a result of higher production in favor of CS as the company built inventory ahead of Jessup's second quarter planned maintenance outage. Other sales for the quarter were $23 million. which included 12 million of green energy sales. EBITDA for the segment rose by 6 million to 50 million, primarily due to higher CS sales prices and decreased key input and logistic costs, along with the benefits of improved productivity. These improvements were partially offset by declines in CS sales volumes, lower commodity prices and volumes, and the absence of 7 million in energy-related cost benefits from the previous year that are expected to recur later in the year. Turning to slide 6, sales in the paperboard segment declined $6 million, largely attributed to a 12% drop in sales prices, resulting from changes in product mix and market-driven demand declines. EBITDA for the segment declined $1 million to $12 million, mainly due to lower sales prices, though this impact was somewhat mitigated by decreased costs for purchased pulp. Turning to the high yield pulp segment on slide seven, sales declined by 8 million in comparison to the prior year, mainly due to a 27% drop in external sales prices, partially offset by a 16% increase in sales volumes. The price reductions were a consequence of market supply dynamics, mainly in China. Segment EBITDA reached a break-even point in contrast to $8 million generated in the prior year. Transitioning to slide 8, consolidated operating income for the quarter amounted to $17 million. Sales price improvements in CS were more than offset by pricing declines across all other products. In addition, sales volume and mix impacts were offset by cost improvements. SG&A and other cost benefits related to favorable foreign exchange rates were partially offset by discounting and financing fees incurred to support enhancements in working capital. Now let's turn to slide nine. Total debt ended the quarter at $798 million, a reduction of $54 million from the same period in 2023. Net secured debt reflected in our financial covenant ratio associated with the term loan ended the quarter at $721 million. Net secured leverage closed the quarter at 4.4 times within the original covenant test. Liquidity closed the quarter at $199 million, reflecting $55 million of cash, $131 million available under our ABL facility, and $13 million for our French factoring facility. As anticipated, working capital levels increased driven by the inventory build ahead of Jessup's annual planned maintenance outage. CapEx for the quarter totaled $33 million, with $5 million directed towards strategic capital to support the startup of the Tartis bioethanol project. Additionally, as Delisle previously noted, we announced the sale of our softwood lumber duty refund rights for $39 million. Overall liquidity remains strong, and we are well positioned to achieve our targeted 70 million debt reduction this year. In preparation for the upcoming refi of our 2026 senior notes, we have retained Houlihan Loki to provide advisory services throughout the process. With that, I'd like to turn the call back over to Delisle.

Right. Thank you, Marcus. Let's now turn our attention to slide 10, where I'll provide an update on our key initiatives for 2024. Our primary goal this year is to refinance the 2026 senior notes before they go current in January 2025, with a particular focus on reducing debt. We are on track to meet our target of reducing gross debt by $70 million in 2024, supported by business-generated free cash flow, a tax refund, and proceeds from the recent sale of the softwood lumber duties refund rights. In addition, we are progressing with the sales process of our paperboard and high-yield pulp assets. Interest remains high among the prospective buyers following the announcement of the suspension of operations at the Temiscaming High Purity Cellulose Plant, which has introduced some delays due to the change in the underlying assumptions of how the site will be managed. While the suspension and asset sales decisions affecting the Temiscaming site have been approached and carried out independently, We believe that suspension will bring clarity to the asset sales diligence process by validating that these assets can be effectively run separately. It's important to reemphasize that this is not a fire sale. We have a value threshold based on the high EBITDA margins and the low custodial capital intensity of the paper board business. While the proceeds from the sale would obviously reduce our debt load, We are carefully balancing the estimated annual $50 million plus in free cash flow that we receive from these businesses against any potential debt repayment. We plan to complete the transition, provided the terms are acceptable, before our notes go current in January 2025. We are taking significant steps to optimize our assets and address the ongoing challenges associated with our high purity of cellulose commodity exposure, which has been impacting our profit margins and earnings stability. As part of this strategic pivot, we announced the indefinite suspension of operations at our Tamiskameen HPC plant. This decision reflects our commitment to mitigating the financial drag from non-fluff commodities, which projected a 2024 EBITDA loss of $48 million, following a $60 million loss in 2023. I will provide more details on this announcement in the slide that follows. One of the most promising initiatives is the continued expansion of our biomaterials business. Our Tardis bioethanol plant, a first step of this strategy, celebrated its first shipment in April. We anticipate this facility will generate $3 to $4 million in EBITDA this year. with projections of $8 to $10 million annually from 2025 as we achieve targeted production levels. Looking forward, our biomaterials project pipeline includes the proposed AGE project at our Jessup facility, which will produce green energy for sale, and a new prebiotics additives plant at the same site. We continue to advance the proposed bioethanol plant in Fernandina Beach as we've commenced detail engineering and submitted the project's air permit with the regulatory authorities. Our proposed projects in the works include crude tall oil operations in both France and the U.S. We aim to finance all these projects with green capital. Let's turn to slide 11, where I'll discuss the recent decision to indefinitely suspend operations at our Temiscaming HBC plant. In April, we made the difficult decision to halt operations at this facility, a move driven by ongoing market weakness in the non-fluff commodity markets, the uncertain availability of affordable wood fiber, and high capital and fixed costs, which, when combined all together, created significant operating losses. The financial implications for 2024 include one-time cost around $30 million for severance, benefits extension, outplacement services, and mothballing the plan. While we are still evaluating non-cash impairment charges, we anticipate the overall impact on this year's operating results and adjust EBITDA to be marginally positive. Furthermore, we expect an improvement in 2024 free cash flow by approximately $15 to $20 million, driven by the monetization of working capital and reduce CapEx that should more than offset the associated one-time suspension cost. Once mothballed, we believe that this facility will represent the industry's best available idle capacity to satisfy future specialty cellulose demand growth since it will require minimal capital investment to restart, can re-enter supply into the market within a year, exists within an operating industry industrial site with utilities and other site services and is qualified by many customers to supply CS products. Consequently, we plan to at least annually assess the possibility of restarting the Tumiskameen HPC plan. During the suspension period and after the CS product qualification process concludes, We estimate that we will realize an annualized improvement in adjusted EBITDA of $15 to $20 million a year, primarily to reduce losses resulting from the HPC commodity sales. We also anticipate an increase of approximately $30 million in free cash flow, stemming from this EBITDA improvement in the avoidance of custodial capital expenditures. The customer qualification process is actively ongoing, with all targeted customers currently testing the CS products from our other plants. This qualification work is expected to take 18 to 24 months. We are building bridge inventory until July to sustain customer demand through this qualification period. The CS business that we expect to retain will be produced from our A and B lines at Jessup and our sulfide plants at Fernandina Beach and Tardis. We remain committed to our fluff business, and the majority of our C-line at Jessup will continue to focus on fluff production. Let's turn to slide 12. We expect enterprise EBITDA to be between $180 to $200 million for the year. Cash interest expense is projected at approximately $85 million this year, which includes the $15 million payment that was made in early January for last year's Q4 due to the timing of the interest payment around the holidays. As a reminder, the current normalized annual interest expense is estimated at $70 million. Maintenance CapEx is estimated now at $80 million, reflecting a $5 million reduction due to the suspension of the Temiscamingh HPC plant. Additionally, we project a $45 million benefit from working capital. which includes a $30 million increase resulting from the Temiscaming HBC plant suspension. Furthermore, we anticipate $14 million in tax refunds and $39 million from the monetization of the lumber duties, which will be partially offset by impacts related to the Temiscaming HBC plant suspension, deferred energy payments, and other accrued liabilities. In sum, we are raising our adjusted free cash flow guidance to a range between $80 to $100 million for the year. These funds will be allocated toward debt reduction and strategic capital investments. On slide 13, I dive deeper into the expected 2024 performance of each of our businesses. We project EBITDA for our HPC segment to be in the range of $180 to $190 million. We anticipate cellulose specialty prices to increase a low single-digit percentage as compared to 2023 as we continue to prioritize value over volume for our specialty products. Sales volumes for cellulose specialties are expected to be comparable to last year, with increases in market share gains resulting from a competitor's plant closure and a modest rise in ether sales volumes. though ether cells will remain below historical levels. These increases will be partially offset by lower acetate volumes due to modest stocking and a one-time favorable impact from a change in customer contract terms in the prior year. We expect a decline in commodity sales volumes in 2024 due to the planned suspension of operations at our HBC plant in Tumiskameen during the second half of the year. Overall costs are anticipated to be lower, driven by improved cost management and production efficiencies, alongside the impact from the suspension of operations at the Temiscaming HBC plant. Our growth strategy remains focused on strategic investments in our biomaterials business, capitalizing on the increased demand for sustainable products. The Tardis bioethanol plant, which was successfully completed its first shipment in April, is operational and projected to contribute $3 to $4 million in EBITDA in 2024, with expectations to reach $8 to $10 million at full production by 2025. Regarding paperboard, we expect to achieve EBITDA in the range of $50 to $60 million in 2024. Prices are projected to stay consistent with those seen in the first quarter, and we expect sales volumes to increase due to rising customer demand. Raw material prices are expected to increase due to increased purchased pulp prices. We expect our high-yield pulp business to achieve EBITDA in the range of $5 to $10 million in 2024. We expect a slight increase in high-yield pulp prices in Q2, where further rise is anticipated in the second half of the year. Additional sales volumes are projected to increase as we move into the second half of 2024. The total custodial CapEx for the paperboard and high-yield pulp businesses is expected to be $5 million. For 2024, we expect corporate costs of $55 to $60 million, up slightly versus 2023, as we are the final year of our multi-year ERP implementation. As the ERP project concludes, we anticipate cost reductions starting in 2025. It's important to note that these costs may vary due to factors like currency fluctuations, environmental charges, and other non-cash expenses. On slide 14, we illustrate the trajectory of our EBITDA margin growth and net leverage decline. In 2024, we anticipate our margins to be in the 11% to 12% range. The forecast for net secured leverage at the end of the year times Covenant EBITDA. Our commitment remains resolute in achieving our target net debt leverage ratio of 2.5 times by 2027. With that, operator, please open the call to questions.

Thank you. We'll now 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 key. One moment, please, while we poll for questions.

Thank you. Our first question is from Daniel Harriman with Sidoti and Company.

Please proceed with your question.

Thank you. Good morning, guys. Happy to see a little uptick in the ethers volume. Could you just provide a little bit more color on what you're seeing in that market, in particular the European construction market and then the destocking that I think you alluded to last quarter and you talked about today and acetate. Do you expect that to be mostly finished or should that be ongoing throughout 2024? Good morning, Daniel.

This is Delisle. To answer your question on Ethers, we're still trying to figure it out, to be honest. We don't know whether this is a restocking by our customers or by our customers' customers in the expectation that the construction markets will start improving in Europe as the ECB is expected to lower interest rates there in the second half of this year. or whether it's really truly an underlying increase in demand. I think we'll have a better look on that and a better understanding of that when we get to the end of Q2. So we'll just have to wait there. And then with respect to the acetate market, again, what we said is that the stocking is really concentrated with a couple of our large customers, principally in China and Asia. And we expected that the stocking will continue through the first half, and then we'll start normalizing in the second half of this year.

Okay, great. Thank you all so much. Best of luck in the coming quarter. All right, thank you.

Thank you. Our next question is from Matthew McCullough with RBC Capital Markets. Please proceed with your question.

Hi, good morning. Thanks for taking my questions. Um, first, can you maybe provide a little bit of color on how the requalification processes for those CS volumes, uh, historically produced at Temiscamine, um, have been going with that, with that 18 to 24 month timeframe, you talked about beef in the time you, uh, first started talking about concentrating commodity volumes at Temiscamine as of last year or from today. And then, um, Do you expect you can requalify all of those CS volumes at other facilities, or do you expect to lose a little bit of business along the way?

Hey, good morning, Matt. With respect to your question on the requalification process itself, it's going well. All of our targeted customers, CS customers that we were supplying at Temiscaming are taking product from our various plants. And I could just say that the process is proceeding as planned. With respect to the period of time, I would say that the 18 to 24 months is from the beginning of the process. So we probably have got a little less than that in terms of remaining time going forward to conclude those processes. And then the question about are we including all of our customers in the process? All of our customers were certainly invited to be part of the qualification process. Some of them, given that they were qualified with some of our competitors, chose not to. And so consequently, we think that some of our customers that we're currently supplying out of Temiscamingue will likely go to our competitors. But we do believe that we will retain what we think are our most important and higher margin businesses.

Great. Thanks for that, Keller. And then just sticking with the Tomiskamee and HPC indefinite curtailment, can you talk about how that will affect your wood chip and residual fiber supply agreement with Green First, your investment in Atomera, and then the operation of the cogeneration facility at the site?

Okay. All right. With respect to our chip supply agreement with Green First, our We fully intend to continue to honor that agreement. Again, this is a suspension of operations and not a closure. So there may be time sometime in the future that we'll need to have a ship supply. But obviously, with the suspension, we're not going to consume chips anymore. So the focus would be working with Green First to resell the chips into the market. Just as a reminder, with respect to that agreement, It is based on the transfer price between the parties is based on market pricing. So we expect that any impact to us with respect to profits or losses will largely be mitigated. With respect to the Anamaro business, again, they take a small volume. We'll be able to supply that from our other plants to keep that operation moving and growing. And then the last issue with respect to our boiler 10, I think is what you're talking about, our liquor boiler, that is part of the suspension. So we're planning to shut those operations or close those operations down for the period.

Okay, great. Thanks for that detail. Last one for me. As part of that softwood lumber duty refund sale, you called on an opportunity for the company to receive additional future sale proceeds contingent upon the timing in terms of the ultimate trade dispute outcome. Can you provide any color here on under what circumstances you would receive additional proceeds in the future?

Really can't, Matthew. The We're under NDA on those type of details, so we can't really share that with you.

Okay.

Understood. Thanks. I'll pass it back. Thank you.

Our next question is from Dimitri Silverstein with Water Tower Research. Please proceed with your question.

Good morning, gentlemen. Thank you for taking my question. I just want to circle back to a couple of things. First of all, the $7 million in energy benefit that you will realize later in the year, can you provide a little bit more detail of what that is and is it likely to fall in the first half of the year or the second half of the year?

Okay, Dimitri, what we're talking about is the CO2 credits that we receive in France with our TARDIS facility. Historically, we've usually been able to realize those and recognize those as part of EBITDA either in the first or second quarters of the year. Right now, we're thinking that it's likely to occur in the third quarter of this year, largely due to government authorities pushing out the payment potential on that. So, again, it'll be there. Roughly about the same amount as we've seen in the past, just a little delay.

Got it. Thank you, Mickey. And then just to follow up on your comment about the market conditions in China that are impacting your high-yield pole business, can you provide a little bit more detail on what's going on there in China and how long these market conditions are expected to last?

Well, the conditions continue as we discussed last quarter. There's still... an excess supply of high-yield pulp or mechanical pulp in China due to new capacity that came on. And I would expect that that's probably going to continue through most of the year. There's a lot of excess supply in that market. The impact it's having with respect to global pricing on high-yield pulp is though limited to China. We're not really seeing a lot of that bleed out to other regions in the world. So pricing in, you know, the Indian subcontinent area as well as Europe continues to be strong and we expect will continue to improve as we go through the year. And in response to what we're seeing in China, we are obviously then repositioning our sales and our supply into those markets that are more attractive. And then we believe that as a result of those stronger dynamics, we'll be able to improve our average pricing as the year progresses.

Okay. So, I mean, if I look at your slide for the volume and price and how you'll pop, it does look like it's come off the bottom a little bit, but obviously not to the level that we saw in 2022. Is the expectation that sort of the normal pricing is somewhere more in line, let's say, with the first half? I mean, how should we think about kind of sustainable pricing for this business?

Yeah, and again, that's a good question of what would be a normalized price. Normally, you know, over a cycle, our high-yield pulp business generates positive EBITDA and positive cash flow. Obviously, we're coming off the trough and starting to see improvements. And as we get into the later part of this year, we'll start to enjoy positive EBITDA and positive cash flow. I really can't right now tell you where the normalized pricing would be. It's likely going to be higher than we are today. Will it get all the way back to the first quarter of 2023? I think right now it's probably, it would be a guess on my part. I really don't want to speculate on that.

And, Dimitri, remember there's a lag effect on our high yield business giving our order file in our logistics supply chain.

Gotcha. So, yeah, I understand that.

Okay. Thank you. All right. Thank you, Dimitri. Thank you.

Our next question is from Sandy Burns with Steeple. Please proceed with your question.

Hi. Good morning and good start to the year. Maybe just to clarify one item about the EBITDA guidance. The $30 million one-time cash charges for the Temeskimen closure suspension, is that added back to get to the $180,000 to $200,000, or are you including those as valid expenses for 2024?

We're adding that back to get to the adjusted EBITDA guidance.

Okay. So that is an add-back. And those are all cash costs, just to confirm. No.

No, they're not all cash costs, but a good majority of it is. And just the other point to make is that the $30 million, it will be spread out over the course of multiple years. It's not all going to happen in 2024. Okay, good.

Okay. And maybe just to follow up on the prior question about the duty sale. and appreciate you don't want to get into too much detail. But maybe just to clarify, was that a sale of all of the duty refunds you were expecting, or was it just a portion of those?

It was the sale of all of our duty refund rights, so not just the amount that was in receivables. So a full $111 million. All right, great. Thank you.

As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. Our next question is from Roger Spitz with Bank of America.

Please proceed with your question.

Thanks very much. Good morning. What is the EBITDA impact of the Q2 24 Jessup turnaround, if any?

That's a good question, Roger, and you got me stumped on that one. I would say in the neighborhood of 10 million, something like that. But again, that's going to be a guess. Just thinking about historical impacts, but that's given the size of the plant, given obviously the impact it has, it's going to be material.

Are you getting off? all lines or just one particular line?

Yeah, we brought the whole plant down for about three weeks.

Okay.

Roger, it's important to note we're through that shutdown, right?

Yeah, the important point is that the plant's back up and running now.

Got it.

And we brought it back up a little earlier than planned. So it was a very successful outage.

Perfect. So I'm Regarding temiscaming, you're going to idle on your HPC plant, obviously continuing to run the paperboard and high yield pulp plant. The slide talks about what you save in EBITDA, but my question is this. If we look at the paperboard and high yield pulp, you both have EBITDA associated with it, but presumably there will be some additional EBITDA pressure or cost from running those plants, but not having the benefit of the HPC plant to absorb the, you know, the other fixed costs of running the whole complex. So, how should we think about, like, LTM EBITDA of those two segments if HPC wasn't running? Is there, like, do they have to absorb another X million dollars of fixed costs from not running HPC?

You're getting into some details relative and with respect to some of the negotiations and discussions we're having with potential suitors of the paperboard business, so I don't really want to get into the details on that. But I will say that Uh, any of the stranded costs that, um, right now that we've, uh, forecasting for the businesses in that 15 to $20 million of benefit that we've got in the EBITDA for the business, uh, for the business going forward. So, uh, we've got an included in the, in the estimates we've given you.

Got it. So where are you at the last point?

Let me make one more point, Roger. Again, this is not a closure. This is a suspension. So any of these retained costs or these stranded costs or however you want to describe them, the plan is that HPC will retain those costs ongoing and won't affect the paperboard business or the high-yield pulp business. Again, because there's a likelihood that we would actually restart these operations sometime in the future. So these ongoing costs fixed cost that we would have at the site, we would need to retain to support that potential.

Well, I guess at least the following two questions. One is, where are you in the process? You said last time you received indications of interest, which suggests that you got first round bids in that are... Where are you? Have you asked for second round bids? Have you run management presentations ahead of the second round? Have you sent out, you know, contracts for potential buyers to mark up?

We have had management presentations. We've had site visits with interested parties. We are have provided draft or you know, draft, uh, APA agreements. Um, but with the, as a result of the suspension, obviously the underlying fundamentals and assumptions relative to how the site will operate have now changed. And so because of that, the, the diligence process is going to be extended. so that our suitors will have a chance to understand what it would mean to the paperboard and high-yield pulp business relative to the suspension that we've discussed. So anyway, the delay, we believe, is actually relatively minor. It doesn't... at all talk about or even suggest that there's a lack of enthusiasm for the assets. In fact, I would suggest that as a result of the suspension, that enthusiasm has actually increased from the parties that are interested. And I would actually suggest also that we've actually seen increased interest from other parties. So We will continue to run the process as we see necessary to get the best value for those assets. As I said earlier, this is not a fire sale. We want to make sure we get fair value for these assets. And we'll run the process as we deem necessary to extract that value.

Got it. If I can take one more further on this subject. You're idling the plan on July 2nd. Q3 will be relatively or substantially clean. Do you think that you really need to go back out and show them the Q3 numbers and with one quarter of clean quarter shown, that's when you can restart? Or do you think you'll have to show them two full quarters of quote-unquote clean numbers without HPC operating to give potential buyers full confidence to make a As high a bid, hopefully, as they can.

That depends on the suitor. All right?

Right.

So it's up to them. But our goal is to conclude the deal if the terms are attractive before we have to by the end of the year as part of the refi process.

Got it. And then are there other people in queue or can I ask two more?

You can go ahead and ask a couple more questions.

Sure. Maybe you said this and I missed it. The 2024 HBC EBITDA, did that change from the 180 to 190 and the paperboard from 50 to 60? I just maybe missed it and you said it on the prepared remarks.

No, it didn't change. Same as we gave last time.

Got it. And then lastly, regarding the Green First Woodchip Supply Agreement, is that – based on take-or-pay volumes, requirements, contracts, or is it just general volume min-max under the supply agreement?

We're required to take a certain amount of volume every year from Green First. So we will need to take the volume even though we're not operating the facility, but the pricing is based on market pricing at the time. And as a consequence, as I said, we will look to resell, working with green first. And as a result of that, our expectation is that we will not see either profit or loss from that resell.

Glad to hear it. Thanks for the extra time. Appreciate it.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Delio Bloomquist for any closing comments.

All right. Again, as always, thank you for joining us today. I appreciate all your interest and support for the company. I am very proud of the hard work and dedication that has been shown by our team and very confident in our ability to continue to enhance the profitability while we work to reduce our debt and our leverage. I look forward to providing updates on all of our ongoing projects and initiatives and value your continued support as we strive for long-term success and growth. As always, we're committed to maintaining transparency and open communication, so feel free to contact us if you have any further questions or you need any further information. Thank you again for your participation.