Good afternoon. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Clearwater Paper Third Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Sloan Bohlen, Investor Relations. Please go ahead. Thank you, Dennis. Good afternoon, and thank you for joining Clearwater Paper's third quarter 2022 earnings conference call. Joining me on the call today are Arsen Kitch, President and Chief Executive Officer, and Mike Murphy, Chief Financial Officer. Financial results for the third quarter of 2022 were released shortly after today's market close, along with the filing of our 10-Q. You will find a presentation of supplemental information, including a slide providing the company's current outlook, posted on the investor relations page of our website at clearwaterpaper.com. Additionally, we will be providing certain non-GAAP information in this afternoon's discussion. The reconciliation of the non-GAAP information to comparable GAAP information is included in the press release and in the supplemental information provided on our website. Please note slide two of our supplemental information covering forward-looking statements. Rather than rereading this slide, we are going to incorporate it by reference in our prepared remarks. With that, let me turn the call over to Arsen. Good afternoon, and thank you for joining us today. Before reviewing our third quarter earnings, I wanted to wish everyone a safe and enjoyable Halloween. Please turn to slide three. We had a great third quarter which exceeded our expectations. On a consolidated basis, we reported net sales of $539 million, which was 20% higher than prior year. Adjusted net income was $31 million, and adjusted EBITDA was $77 million. Let me share a few highlights. Both paperboard and tissue demand were strong, with increased pricing in both businesses. Inflation remained a headwind across most of our input costs, particularly in pulp, fiber, chemicals and energy. In addition to price increases, we continue to improve our operating performance to help mitigate the impact of rising costs. We reduced net debt by $6 million in the quarter and $106 million in the first nine months of the year. We also repurchased $25 million of our outstanding notes due in 2025. Finally, we repurchased 1 million of shares during the quarter for a total of 5 million in the first nine months of the year. We have $25 million remaining on our buyback authorization. With that, let's discuss some additional details about both of our businesses. Let's start on slide four with a few comments on our paperboard business. The industry continues to experience strong demand with higher SBS pricing as reported by RISI. Since the beginning of 2021, RISI has reported price increases for the U.S. market that total $500 per ton. 250 price increases were reported in 2022, including $20 per ton in September and $30 in October. As a reminder, it typically takes us up to two quarters for price changes to be reflected in our financials. It is also worth noting that our portfolio includes additional grades and price mechanisms that are not reflected in RISI's reporting. We're monitoring economic trends, given concerns about a global economic slowdown. Our backlogs remain stable with continued strong demand. Even with the economic uncertainty, we continue to believe that the overall industry demand is robust, as evidenced by RISI's reported price increases a few weeks ago. Now please turn to slide five for some additional comments on our tissue business. The underlying operating performance of our tissue business was very strong, and we continue to observe consumers shifting their demand toward private branded tissue products to help offset inflation. Private branded dollar share of the tissue market climbed to over 35% in September, which is an all-time high. We shipped 12.6 million cases in the third quarter, matching our second quarter shipments and slightly above the third quarter of last year. We believe that we're well-positioned to support our customers and their shoppers during this time of economic uncertainty. We recognize that inflation has outpaced price increases in tissue in 2021 and 2022, and we're diligently working to recover our margins. We're implementing recently announced price increases that will provide additional benefits in 2023 and are working diligently to continuously lower our cost position. As discussed in previous quarters, both of our businesses continued to see substantial inflation in the third quarter. In addition to price increases, we continued to focus on improving our operating and supply chain performance. Our focus on pricing and productivity is helping to offset the inflationary headwinds that we cannot control. I will now ask Mike to discuss our third quarter results in more detail. Thank you, Arsen. Please turn to slide six. The consolidated company summary income statement shows third quarter for 2022 and 2021. In the third quarter 2022, our net income was $20.6 million. Net income per diluted share was $1.21, and adjusted net income per diluted share was $1.83. We exceeded our third quarter adjusted EBITDA expectations with solid operating performance, strong pricing, lower than anticipated natural gas prices, and deferred maintenance expenses. In the third quarter, we effectively settled an open IRS audit, which resulted in the reversal of certain net tax credits related to our Lewiston pulp investment from five years ago and increasing our taxes by approximately $8 million in the quarter. The corresponding segment results are on slide seven. Slide eight is the year-over-year adjusted EBITDA comparison for our pulp and paperboard business in the third quarter. We benefited from our previously announced price increases, which were partially offset by higher inflation across most of our spend categories. You'll recall in the third quarter of 2021, we took a major maintenance outage that impacted adjusted EBITDA by $5 million. There was no outage in the third quarter of 2022. You can review a comparison of our third quarter 2022 performance relative to our second quarter on slide 14. Please turn to slide nine, where we provide a year-over-year comparison for our tissue business in the third quarter. In addition to the implemented price increases, we realized some mixed benefit in the quarter. Our production was higher than last year when we were curtailing production to reduce inventory and meet demand, and our sales were modestly higher than last year. These benefits were largely offset by higher costs due to inflationary pressures. You can review a comparison of our third quarter 2022 performance relative to the second quarter on slide 15. Slide 10 outlines our capital structure. Our liquidity was $297 million at the end of the third quarter. We reduced net debt by $6 million with our free cash flows in the quarter. We utilized free cash flows and liquidity to repurchase $25 million of our notes that mature in 2025, reducing that principal amount to $270 million. Additionally, we used approximately $1 million to repurchase 30,000 shares for approximately $34 a share. This increases the total repurchased under our existing stock repurchase program in 2022 to approximately $5 million, with 150,000 shares purchased at an average price just above $33 per share. We have $25 million remaining on the authorization. We updated our target capital expenditures to $60 million-$70 million per year, absent major projects to reflect the impacts of inflation. Our net debt to adjusted EBITDA at the end of the third quarter of 2022 was 2.0x, and net debt was $494 million. Additionally, S&P raised our outlook from stable to positive during the third quarter. Slide 11 provides a perspective on our fourth quarter 2022 outlook and the resulting full year guidance. Our expectations assume that we continue to operate our assets without significant disruptions. We want to reiterate that our price realization and inflation will continue to be difficult to predict. Our current expectation for the fourth quarter is adjusted EBITDA of $38 million-$48 million. The midpoint of that range for the fourth quarter is $34 million lower than the third quarter adjusted EBITDA of $77 million. This is largely due to our planned major maintenance outage. As a reminder, we had no major maintenance outages in paperboard in the third quarter and expect that the fourth quarter outage will impact adjusted EBITDA by $21 million-$25 million. This is modestly higher impact than previous expectations. Previously announced price increases are expected to positively impact us during the quarter by $5 million-$9 million. We expect inflation, particularly pulp, fiber, chemicals, and energy to cost us an additional $7 million-$11 million. We experienced production issues at our paperboard mills in October, reducing both our pulp and paperboard production and impacting EBITDA by approximately $5 million. Additionally, the fourth quarter tends to be seasonally soft for tissue volumes, with retailers focusing on holiday items in their stores. Our adjusted EBITDA for the first three quarters of 2022 was $199 million, and when combined with our fourth quarter guidance, we expect the full year adjusted EBITDA to be $237 million-$247 million, significantly higher than our adjusted EBITDA of $175 million in 2021. Here are some of those building blocks that compare expected 2022 performance relative to last year. We expect a full year pricing benefit of $274 million-$278 million. This is near the high end of our prior guidance. Commodity cost inflation, including pulp, fiber, freight, chemicals, and energy, is expected to be $187 million-$191 million, which is at the low end of our previous expectations. We expect labor inflation net of cost mitigation efforts to be approximately $10 million. We expect growth in converted tissue volume. However, the volume benefits will largely be offset by higher supply chain costs. In our paperboard business, planned major maintenance outages are expected to have a slightly higher financial impact. We're also anticipating the following for 2022. Interest expense between $34 million and $36 million. Depreciation and amortization between $101 million and $104 million. Capital expenditures of around $30 million-$40 million. This is lower than our expected target expenditure levels of $60 million-$70 million. Over the last three years, we've cumulatively underspent our target by over $60 million, and you should expect that we will spend over the next several years above that targeted $60 million-$70 million range. We expect to update you during the fourth quarter earnings call on the timing of the Lewiston recovery boiler tube replacement project, which is expected to require a capital expense approaching $40 million and an estimated adjusted EBITDA impact of $30 million. We expect to spend $5 million out of the $40 million capital expenditures in 2022. Our effective tax rate for the full year is expected to be 34% versus the typical rate of 26%-27%. That rate is being impacted by the reversal of net tax credits taken in 2017 through 2019. Additionally, our current cash expectations for future years assumes that cash taxes will exceed our statutory taxes as we benefited from accelerated depreciation related to the Shelby expansion and Lewiston pulp optimization projects. Let me turn the call back over to Arsen Kitch. Thanks, Mike. I want to spend a few minutes discussing our key priorities for shareholder value creation. Since becoming Chief Executive Officer in 2020, we have focused on generating free cash flow, deleveraging our balance sheet, and improving financial flexibility. We have recently achieved our leverage target and believe that now is a good time to share our capital allocation framework. This framework has been shaped by investor and analyst input together with a robust dialogue with our board. Slide 12 offers a visual depiction of our framework, which is prioritized from top to bottom. Our first priority is to sustain our asset base, which we believe requires an average of $60 million-$70 million of capital expenditures annually, excluding large projects. We expect to invest above that target level in the near to medium term. Second, we intend to maintain a balance sheet that provides us with financial flexibility. While we believe that a long-term leverage ratio of 2.5 is appropriate, we may continue to deleverage further to create greater financial flexibility to take advantage of investment opportunities that will create shareholder value in a potential down cycle. Third, we will evaluate value accretive internal and external investments. These investments should be strategic in nature and clearly add value by realizing near-term cash flow benefits. Given the current business environment, we're likely to prioritize incremental cost reduction projects and add-on acquisitions versus large greenfield or brownfield capacity expansions. Fourth, we expect to buy back shares to mitigate the impact of dilution from share grants to our employees. We will also be opportunistic with additional share repurchases depending on our share price levels. I would like to emphasize that we will continue to be disciplined allocators of capital, and we'll seek out the right opportunities to create value across both of our businesses. In closing, I would like to thank our people for all that they do to keep our operations running safely and efficiently and for servicing our customers. I also want to thank our shareholders for their continued support and our customers for placing their trust in us. With that, we will end our prepared remarks and take your questions. At this time, I would like to remind everyone, in order to ask a question, simply press star then the number one on your telephone keypad. Your first question is from the line of Adam Josephson with KeyBanc Capital Markets. Please go ahead. Arsen, Mike, good afternoon. Congratulations on another really good quarter. Thank you. Yep. Arsen or Mike, just on your third quarter performance, obviously you topped your EBITDA guidance. I assume that was mostly or entirely related to higher paperboard prices and demand, and I assume the same goes for the implied full year guidance going up by, call it $10-ish million. Am I right in thinking that? Or if not, what were the sources of upside relative to your EBITDA guidance in the quarter? It was a range of things, Adam. First and foremost, we had really good operational performance relative to our expectations. Tissue performed very well from a production standpoint, and paperboard did as well. I'd say that was the biggest lever relative to guidance. Pricing across the portfolio was probably the second-biggest lever for the outperformance. Third one was natural gas prices, which has been pretty difficult to predict. You know, three months ago, the forward curves looked pretty ugly. They came down since then. That would have been the third lever. Then we also noted that we deferred some of our planned maintenance expenses in the quarter to the future. Those would be the four primary buckets, Adam, of where we beat relative to our guidance. Thank you, Mike. I appreciate that. The production issues in October, you mentioned of pulp and paperboard, can you be any more specific as to what that was? I assume that you're not expecting those to persist into November. Yeah. We're not gonna get into the details, but they impacted both mills, pulp production at one of the mills and paperboard production at the other mill. We're still frankly working through those issues, so $5 million is an impact that we expect across the quarter, although we think the majority of that impact happened in the month of October. We're working through them. It is something we'll get through and we'll get back on track. We thought it was important to call it out here early as it is having an impact on our quarter. Yeah, I appreciate that, Arsen. Just a couple more from me. One is, toward the end, you mentioned you're not inclined toward any large greenfield capacity additions as part of your cap allocation strategy, which begs the obvious question, now you're pretty much at capacity in your paperboard business. I mean, you're producing 800,000 tons a year, which is precisely what your paperboard capacity is. If you're not gonna invest in new capacity, how would you be able to grow? I mean, do you have the capability to grow in your paperboard business, or are you at capacity? How do you think about growing that business in the future, absent any major capacity additions? Adam, you're right. We've been at capacity, and we've been operating full for a while. Two ways to do that in paperboard. I think the first one is making, I would say, medium-sized investments in the mills to improve throughput and increase production. That's not a new paper machine. That's incremental production to drive some growth. We'd be looking externally for acquisition opportunities. We're not gonna get into a lot of details of what those could look like, but we certainly see potential and some options on the horizon for us to pursue growth through acquisitions. I appreciate that. Just one last related one, which is that there's been a lot of talk about all the FBB capacity additions that have been announced in Asia and Europe, and in the U.S. for that matter, and even some of the U.S. producers are running FBB trials. How are you thinking about the growth in FBB imports, the FBB capacity additions that have been announced, and what long-term impact that might have on your domestic SBS business? You know, there has been a lot of discussions about FBB recently. FBB's been in this market for many years. We believe there's about 500,000 tons of imports, and that's been relatively stable for some period of time. I think through this last couple of years a lot of our customers recognized the benefits of having a domestic supply chain. I think that's part of the answer. The second part is this is still predominantly an SBS market. FBB applications require different type. You know, it require different converting processes and for converters to change to run their operations. At least I think in the near to medium term, you know, don't know exactly how the capacity additions will impact imports into the U.S., but they've been around for a while. I think domestic FBB production potentially offsets some of those imports. But, you know, we're working through various scenarios and planning for how we would react and what we would do. Yeah. Thanks so much, Arsen Kitch. Your next question's from the line of Paul Quinn with RBC. Please go ahead. Yeah. Thanks very much guys. Just wondering about, in terms of your Q4 guidance, are you assuming that price increases that you're seeing on both the paperboard and the tissue side are gonna offset the cost inflation you're seeing? No, I think we have a little bit of a timing issue Paul, so it's a good question. Our price increases are gonna be just below what we think our raw material cost inflation's gonna be. Pricing, give you a range, and this is sequential, you know, up $5 million-$9 million. Then from our raw material and freight inputs, that's gonna be up $7 million-$11 million. A mild margin compression that we're gonna see from the third quarter to the fourth quarter. Okay, that's helpful. On the costs themselves, are you seeing any relief on freight yet? Freight yes. We saw that a little bit in the third quarter heading into the fourth quarter. I think that's one area that we're seeing a positive comparison, at least on a sequential basis. At this sec, you're starting to see something on pulp, but nothing on energy yet? Yeah. I think on pulp it's a tough one because it's. We saw a little bit of easing on softwood, very minor, here into October. Eucalyptus is holding pretty firm. You know, I think if you look back at the forecast into the second half of this year, the forecasts were indicating an easing in pulp prices. We obviously haven't seen that. If you look at the forecast into 2023, I think most of them are assuming a decrease in pulp pricing. At this point I think we've been wrong for several years. At least it's good to see some easing on softwood. We're hoping we're at peak and we'll see some relief in the coming quarters. Okay. Just on major maintenance, I mean, I see that sort of that slide at the end, saying $35 million-$40 million in 2023, but it could also be postponed to 2024, or how are you thinking about 2024 or, you know, are we due for another zero major maintenance year? Sure. Good question, Paul. Slide 20 just to clarify there's two separate potential outages in 2023. We've called out one that's in the fourth quarter that's about a $5 million outage. Okay. The other one, this is related to Lewiston, and this is the screen tube replacement project. On this one, Paul, we need to get into our outage in Lewiston for the fourth quarter here of 2022, which is gonna commence in about a week. As we finish up that outage, we'll be in a much better position to choose which timeframe we're gonna take the 2023 or 2024 outage. This is either late in 2023 or early in 2024, depending upon both the state of the screen tubes, the availability of contractors, and the availability of materials. Okay, that's great. Assuming that you're gonna push through to the do the screen tubes in 2023, what does a preliminary 2024 look like? Does that cover up Lewiston for a year, and then you're back just basically on [uncertain] then? Too early to speculate, Paul, but we will anticipate your question when we're ready to give you guidance on the next outage at Lewiston once we get through this one here in November. Okay, fair enough. That's all I had. Thanks. Thanks. Your next question's from the line of Mark Wilde with BMO Capital Markets. Please go ahead. Thanks. Good morning, or good afternoon, Arsen and Mike. Good afternoon. First one, just a kind of detail question. On slide number 11, you've got a major maintenance outage at Lewiston listed as $19 million-$23 million. I think during the commentary I heard that number go up by a couple of million bucks. Can you help us with that? Yeah. Good question there. I'd have it at the higher end there, closer to that 23 for the major maintenance outage. Okay. All right. I think you've already talked about sort of what we should expect in pricing in terms of kind of $5 million-$9 million quarter-over-quarter. Is that correct across both of the businesses? Correct. Okay. Is there anything, Mike, outstanding right now, Mike or Arsen, in terms of any contract renewals that you're working on? I think we've got through the material ones in 2022. I think as we look at 2023, it's a more normal year for us. It's the normal risk that we have going into any year and frankly we feel pretty good about next year. I think we have opportunities to both optimize and grow our business and tissue. Okay. You know, Arsen Kitch, over the last couple of years you've been, you know, quite clear about sort of the need for kind of change in the tissue market and, you know, potentially some consolidation. What's your read on the situation right now? I would still stand by those comments. I think consolidation is still needed to improve scale and cost and returns. You know, from our standpoint, you know, we wanna make sure we have a strong balance sheet, so we can play whatever role we need to play in that consolidation. You know, right now margins are depressed in the tissue business, and capital markets are somewhat turbulent. I think we're well positioned to play a role in that consolidation on both sides. Okay. All right. The last one from me, just when you talked about sort of, you know, investing kind of incrementally on the two sides of your business, how do you think about sort of tissue versus packaging? In packaging, you know, you've historically been non-integrated in that business. Maybe just any thoughts about, you know, investing downstream in packaging. The first part of your question, I think will be driven by value creation and will be opportunistic. I think we're willing to invest in both sides of our business if we can create value. In terms of packaging, you're right. We've been independent. That's part of our value proposition to our customers is that we are focused on them through the ups and downs of the paperboard market. We have and will continue to evaluate if that's still the right strategy in the long run. That's a strategy that we've had now for since we've become a public company in 2008. That's part of our value proposition. Certainly we'll be looking at all options in the coming years to make sure that all of our strategies still make sense. Okay. Arsen Kitch, just finally, you talked about the potential to look at kind of medium-sized moves on the mill side in SBS. Would it be fair to assume that could involve sort of mills that are, you know, could undergo conversions or, you know, might be kind of in the midst of conversions? No, I think we'll be open-minded, and we'll look at opportunities where we think we can strategically make sense for us, the quality of the asset is there or has the potential to be there. The third part is creating optionality for us down the line to create a I would say a more scaled, and a better paperboard business that's more relevant to our customers. Okay. All right. Sounds good. I'll turn it over. Thank you. Today's final question is a follow-up from the line of Adam Josephson with KeyBanc Capital Markets. Please go ahead. Thanks, Arsen, Mike. I appreciate it. Just to follow up on one of Mark's questions about in which segment you'd be more inclined to invest in the years to come. I mean, I understand looking at value, Arsen, but all else equal, would you be more inclined to invest in paperboard just given the superior market structure, or not necessarily for any number of reasons? Adam, it's a good question. I think there's a number of factors involved. I mean, the first obvious one is value creation potential, right? Then looking at strategic fit, looking at quality of assets. It's hard to say that we can find more opportunities on one side of the business or the other. I think it's gonna be situation specific, as we look at potential for growth. You're absolutely right. We've enjoyed good paperboard margins over the years, and tissue is more challenged, but I think each situation is gonna be unique. I think we'll continue to be opportunistic and we'll look at both sides of the business. Yeah. No, I appreciate that, Arsen. Mike, in terms of the CapEx, you know, you mentioned that in the next few years you'll be spending above that $60 million-$70 million, just given the degree to which you've underspent in recent years. Can you give me some order of magnitude, rough expectations over the next two,three,four years, whatever you might be thinking along those lines? I think the right way to model it, Adam, is just on average to be in that $60 million-$70 million ZIP code. If you took the underspend over the last few years, you project that forward as, you know, something that will be a bit higher. When you look at a company like ours, we're rather small, and so things become a little more episodic. As an example, the recovery boiler number five at Lewiston, and that project, that's gonna add to that run-rate capital expenditures that we have, and that's something that you should incorporate into your models here for the next couple of years. Yep. No, I appreciate that Mike. Just thinking about next year, obviously, we don't know the timing of the major maintenance next year whether it'll be all next year or in 2024. That aside, is there anything that we ought to be aware of as we're thinking about 2023 versus 2022 at this admittedly early stage? We wanna shy away from giving guidance for 2023. I think what we'll Yeah We'll look to do at the year-end earnings call in February is start giving you those building blocks like we've customarily done. We'll hold off until then. Yep. Yep. No, fair. Just one last point of clarification on the price mix guidance for the year, the increase, I think it went up by $11 million. Was that all paperboard, and was that all the September-October SBS increase, or was that also partly related to previous price increases? It's both businesses. We're implementing previously announced price increases in both tissue and paperboard. I think we mentioned on the call, we'll see benefits from the tissue price increases going into next year. Then if you look at the average selling price on tissue, that has been on an upswing. We're optimistic in our ability to recover those margins from inflation in tissue, although we still have a ways to go. Yep. Arsen Kitch, actually, one last one before I let you go is you mentioned private brand market share is now above 35%, and obviously consumer buying behavior is being affected. Can you just give us a little more insight into what you see happening and how high perhaps that private brand market share could go, given the pressure that some consumers are under? Yeah. Adam, we've seen private brands gain share even when the economy was in really good shape. We do think there's an acceleration that's happening here with inflation and the economic uncertainty. I think what we've said previously, if you look at some European markets, private brand share is north of 50%. There are categories in the North American markets on the grocery aisles that are north of 50% as well. Do I think we'll get to 50% here in the near term? That's probably a bit of a stretch, but I think there's still plenty of runway for private brands to gain share. We have also noticed consumers gravitating towards lower cost items, smaller pack sizes. Some of that is happening, but I think that remains to be seen exactly how consumers behave in heading into next year. Thanks so much, Arsen Kitch. Thank you all for joining. This does conclude today's conference call. You may now disconnect.