Good morning, and welcome to the Rayonier 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 Rayonier Advanced Materials. Thank you. Mr. Walsh, you may begin. Thank you, operator, and good morning, everyone. Welcome again to Rayonier Advanced Materials second quarter 2022 earnings call and webcast. Joining me on today's call are De Lyle Bloomquist, our President and Chief Executive Officer, and Marcus Moeltner, 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 ryam.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 De Lyle. Thank you, Mickey, and good morning, everyone. I'm excited to be joining you on my first conference call as CEO of Rayonier. Though new in this role, I have been with Rayonier for eight years as a director of the company's board, including as the Chairman of the board since 2020. Before my tenure with Rayonier, 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 Rayonier's board, I have been involved with creating our strategy, which calls for us to improve our balance sheet, grow 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 GreenFirst Forest 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 EBITDA growth, our second area of focus is increasing production and sales volumes by increasing mill reliability. The extensive planned 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 cellulose 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 of 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 Specialties products and a 25% increase for our paperboard products. Our consolidated adjusted EBITDA was $34 million, which was flat to the prior as the price increases and cost surcharges 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 GreenFirst 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? Thank you, De Lyle. Starting with High Purity Cellulose on slide seven, first quarter sales increased 18% or by $47 million - $302 million, driven by a 20% increase in sales prices. This reflects a 20% increase in CS pricing as per our negotiated contracts and a cost surcharge. Sales volumes for the segment were up slightly to 206,000 metric tons. Net sales also included $24 million of other sales, primarily from bio-based energy and lignin. EBITDA for this segment declined $2 million - $36 million, driven by higher input costs, including wood, chemicals, energy, and supply chain expenses. Turning to slide eight, our paperboard segment sales grew $6 million, driven by a 25% increase in sales prices, partially offset by a 10% decline in sales volumes. EBITDA for the segment doubled to $14 million, as the higher sales prices more than offset higher costs. Turning to our High-Yield Pulp segment on slide nine, sales increased by $3 million from prior year, driven by a 12% improvement in sales pricing, reflecting strong demand for global market pulp. EBITDA for this segment declined slightly to break even for the quarter as the price increases helped offset higher costs. Turning to slide 10, on a consolidated basis, operating income declined $4 million from prior year to a $3 million loss as sales price improvements across each segment were impacted by inflation on key input costs and supply chain constraints. SG&A and other costs increased $9 million, primarily driven by increased severance and variable stock compensation due to the recent CEO transitions. Lastly, on slide 11, liquidity declined to $274 million, including $148 million of cash as we repaid $20 million of senior notes offset by the sale proceeds of shares in GreenFirst. As of today, our cash balances are down approximately $55 million, driven by an $18 million interest payment, a $10 million principal repayment on our cogen debt in Canada, and timing of working capital. Net debt ended the second quarter up slightly to $764 million compared to our full year guidance of $725 million. With the completion of all the planned maintenance outages, we spent approximately $140 million, including $54 million on deferred maintenance expenses and $87 million in CapEx. Going forward, we expect a significant improvement in free cash flow for the remainder of the year, driven by our $160 million EBITDA guidance for the full year. We continue to monitor capital markets and are prepared to opportunistically refinance our 5.5% senior notes, which mature in June of 2024. We expect to deliver improved results for the remainder of the year, which will further deleverage our balance sheet and improve the company's credit profile in the back half of the year. We remain confident that we will obtain an acceptable refinancing, which we expect to complete prior to the notes going current in 2023. With that, I'd like to turn the call back over to De Lyle. Thank you, Marcus. Turning to page 12, I want to provide an update on each of our businesses. With respect to our High Purity Cellulose business, we continue to see strong demand, thus increased sales volumes for our core products. Sales prices for Cellulose Specialties increased 20% in the second quarter versus the prior year, driven by our negotiated contract pricing, plus the cost surcharge implemented in the second quarter. We expect this cost surcharge to remain in place for at least the coming quarter, given the stubborn elevated input cost. We expect to realize higher prices on commodity High Purity Cellulose products in this coming quarter, as demand for these products remains stable and supply for Fluff products remains constrained. However, we are cautious about supply chain constraints going into the third quarter. As previously noted, we successfully executed the planned maintenance outages at our four facilities in the first half of 2022. We expect improved reliability and productivity for the remainder of the year, which will result in significantly improved results for the second half of 2022. In paperboard, we are experiencing strong demand for packaging and commercial print products. We expect to realize higher prices to offset inflation. Thus, we will maintain a strong and stable EBITDA in this business for the coming quarter. In high-yield pulp, we expect that we will also realize higher prices, but sales volumes will be dependent on production and supply chain constraints. Overall, we expect costs will moderate, and EBITDA will become positive in the coming quarter. We expect our annual corporate expenses to be approximately $50 million for the full year. Given the nature of these corporate expenses, volatility between quarters is expected to remain high. We also remain committed to managing our capital expenditures to within our $140 million-$150 million guidance for the full year. Finally, we still expect to receive $21 million of tax refunds this year. Another key initiative of RYAM is reducing our greenhouse gas emissions. Early this year, we set a target to reduce our greenhouse gas emissions by 40% between 2020 and 2030. We're proud to report that we reduced our total greenhouse gas emissions by 8% in 2021 as compared to 2020. We still have more to go towards realizing our 2030 goal, but this reduction was an important first step. With that, operator, please open the call to questions. Thank you. The floor is now open for questions. If you do have a question, please press star one on your telephone keypad at this time. If your question has been answered, you could remove yourself from the queue by pressing one. Again, ladies and gentlemen, it's Joan, and our first question comes from John Babcock from Bank of America. Go ahead, John. Hey, good morning, and thanks for taking my questions. I guess just quickly, on Cellulose Specialties demand, could you just talk about what you're seeing in Europe right now? I mean, it seems like, you know, there's pretty decent commentary out there about, you know, just been a lot of hesitancy in the marketplace. I wanna kinda get some color from you there. Hi, John. This is De Lyle, and thanks for being on the call. Overall, we're seeing our HPC as well as our cellulose specialty business and our volumes are still continuing to be relatively strong. One of the things we do is we constantly are talking to our customers to determine whether the base business continues to go as well as we hope it will, and we're still getting strong indications from our customers that the underlying demand is decent and strong. The issue in Europe is really around energy, and we continue to watch that. Currently, we're still seeing that demand is hanging in there. Again, it's something that we're somewhat cautious about and are watching it on almost a daily basis. Okay, that's very helpful. With regards to the latest price increase that you announced on the non-contracted volumes, could you just remind me, were they impacted by the surcharge earlier this year? Yes, they were. This is in addition to the surcharge, and really at the end of the day, it's us trying to capture what we believe is our fair value for our products. Okay. Overall, I mean, you talked about the maintenance costs and gave a little bit of clarity there. You know, I was just wondering, even when we add that back, could you just, you know, talk about what gives you confidence that you'll see that inflection in earnings in the second half, and particularly in light of the macro challenges that exist? The impact of the outages was fairly significant in the first half of the year. I mean, if you look at some of the facilities that we took down, we took them down for a good part of a month, if not over a month. Having all those facilities operating in the second half of the year obviously should and will, in my opinion, increase the production and therefore the sales volume relative to what we had in the first half. My guess is you'll probably see an increase in sales volumes of 10%, if not more, in the second half versus the first half as a result of the fact that all the facilities will be running flat out for the rest of the year. Okay. Just a last question before I turn it over. I mean, overall it seems like the pulp segment, you know, has seen a pretty limited benefit from higher pricing. I wanted to kinda get some sense from you as to how core you see this business, you know, to RYAM. You know, I mean, it just seems like performance has been relatively mixed over the years, and wanted just kinda get color on how you view that business and how important it is to RYAM as a whole, and whether it makes sense to maintain it. Well, I view it personally as strategic and core to our strategy. There are significant tailwinds with respect to the long-term demand for Fluff business. As a result, it's something that I think we will latch on to to grow our business going forward and going into the future. I view it as something that we will continue to focus on to grow the business. Okay. Thank you. That's all I have for now. John, it's Marcus. Just, you know, an added comment on the high yield. It has an integrated piece to play with paperboard, right? It really creates that three-ply sheet with the bulk attributes that's well regarded in the marketplace. To your comment on pricing, given the length of the supply chain, there is a lag effect on realized pricing. Again, you're not seeing it right now, but certainly that lag will show its. We'll see in the future quarters. Thank you. Our next question comes from Paul Quinn from RBC Capital Markets. Go ahead, Paul. Well, thanks very much. Yeah, morning, guys. Just, I guess, to follow up on this High-Yield Pulp. We're expecting this to be positive in Q3 here? Good morning, Paul. Yes, we are. Okay. Essentially on the guidance on paperboard that you expect price increases to more than offset the inflation, so that should be positive as well? That's correct, yes. Okay. If we could just dive I'm sorry, go ahead. Yeah, sorry. Sorry, go ahead. No, I was just gonna say, we expect that the volumes will remain consistent and pricing as well should remain relatively high through the period. Okay. Just diving into this, Cellulose Specialties business or high purity. On the Cellulose Specialties, that cost surge here, it says $146, that's just on the Cellulose Specialties portion, right? Was it on all volumes? Yes. It is only on Cellulose Specialties business, and it's on all volumes. What are we seeing in terms of on the commodity side of that business, especially? I mean, we've seen fluff prices go to crazy levels here, where you've got a differential between fluff and NBSK. I don't know. I think I tracked it over 20 years. It was about $46 and now we're over at $300. One question is just how sustainable would you think that premium is? Number two, a lot of capacity coming in on the commodity dissolving side. Just wondering how you're feeling about that market going forward. Well, we believe that we're probably seeing the commodity prices starting to peak and therefore expect coming Q4 and so, and thereafter, we'll start seeing those prices go down both for viscose as well as fluff. Relative to your question on the premium of fluff pricing to the index, I expect that most of the new capacity is really coming on hardwood, and our play is primarily on softwood. At the end of the day, even though there may be some narrowing of that premium, we believe we're somewhat protected because of our focus being more in the softwood, therefore less exposed to the new capacity. Okay. Some of the commentary we're hearing on the acetate guys, the downstream guys is a little bit of weakness in the market. Is that consistent with what you're seeing from your customers? No, not really. In fact, you know, I was just with one of our customers in the last week or so. He thinks that the inventory pull down has essentially played itself out, and he's actually expecting some modest growth going forward. We actually think that Acetate will be flat to increasing over the next few quarters. Okay. I think that's all I had. Thanks very much, best of luck. Well, thank you, Paul. Thank you. Our next question comes from Roger Spitz from Bank of America. Go ahead, Roger. Thanks very much. Marcus, excuse me. Do you have a view of if you intend to refi your 5.5s with either secured or unsecured debt? A related question is, as of June 30th, you know, how much capacity do you have to carry secured debt under your 7 5/8s to the 2026 bonds? Yeah, Roger, we're again keeping all our options open, and Mickey and I, you know, stay close to the markets. We do have some capacity, right, on the 3.5 leverage test, and the $87 million extra basket. There is capacity to add some. Again, we're keeping our options open. Got it. Just looking at some cash flow items here. What is your 2022 cash tax expectation or does that include the $21 million tax refund or is that in addition to any cash outflows? The $21 million is a tax refund from the U.S. We are taxable in France, so we have some payments there. Think of a number, you know, in the range of $6 million-$8 million. Of the outflow? Yeah. Got it. How does 2022 working capital inflow or outflow look for you? You know, we gave the guidance, right, for our net debt at $725 million. We ended Q2 at $764 million. Roger, if you're looking at your model, right, you can back into the EBITDA and CapEx. We have some remaining interest of $30 million. We talked about the tax refund. You know, the one we're being cautious on, but could impact that number positively is working capital. De Lyle spoke to, you know, the supply chain items that we're managing. Got it. Thank you very much. Certainly working capital we see as a benefit for the balance of the year here, vis-a-vis the build that we had earlier in the year because of the shutdowns. Got it. Thank you very much, Marcus. Mm-hmm. You're welcome. Our next question comes from Paretosh Misra from Berenberg. Go ahead, Paretosh. Thank you, good morning, guys. If I look at your full year EBITDA guidance, then the second half implies $100 million +. What's the right way to think about kind of your sustainable or 2023 run rate? Because you'll get some more pricing, but I guess some of these maintenance costs will come back next year. Just wondering what's the best way to think about like a more sustainable or next year's earnings run rate? Good morning, Paritosh. This is De Lyle. Looking forward, and I think I'll start with H2, and then I'll expand it to 2023. H2, as you noted, you know, is right around $106 million to hit our guidance, and roughly $53 million per quarter run rate. Going forward, we believe that into 2023, that is gonna be a good number for the year. There are some pluses and minuses throughout the year. You know, there may be some degradation in commodity prices, but we do think that there'll be some strength in our specialty cellulose pricing. Volumes will be significantly higher, we believe, given that we won't likely have the same extended outages that we had with our facilities this year. We do believe that we'll also have a much better control on our spending. I think that, you know, mid-cycle, and I think we've given this guidance in the past, mid-cycle, we should be in the 200+ EBITDA range, and I do believe that's gonna be our target for next year. Got it. Thanks. That's great color. Can you provide an update on your bioethanol project in France? How serious are these permitting delays? I don't think the permitting delays. I think we've got a great solution to what caused the delays. There was a couple of species that were very sensitive to the specific environment that we were considering building the new facility on. We have redesigned that so we don't disrupt that environment and have resubmitted the permits. The current indications we're receiving from the regulators and so forth is that we should be able to get the permits, you know, late 2022, early 2023, and soon thereafter we'll be able to start constructing the facility. Got it. Thanks, guys. That's all I had. As a reminder, it's star one to ask a question on the phone. Our next question comes from Paul Quinn from RBC Capital Markets. Go ahead. Yeah. Thanks again. Just a couple follow-ups. Asked on acetate, just wondering how the ethers market is shaping up. I mean, this is one of the real reasons why Rayonier bought Tembec, who was a global leader in ethers at the time, and we saw pretty good growth characteristics of that product. Just wondering if it actually followed through. Paul, with respect to the ethers, we still are very bullish on the long-term prospects and growth rates in that business. In fact, that was one of the primary reasons we made the acquisition of Tembec. You know, short term, we're seeing a little bit of softness in the construction market, with respect to what's going on in Europe. Again, long term, I think we're still very bullish on the growth for that particular market segment. You referenced lower maintenance in 2023. Just wondering if you could quantify that, and is that maintenance schedule still heavily into first half of the year or is it more balanced throughout 2023? It's still with respect to the maintenance schedule, still pretty heavily focused on the first half of the year. Fernandina will be in the later part of the year, let's say Q3, Q4. Jesup will definitely be Q1. Tartas will be Q1, and Témiscaming, as always, will be in the month of May. As you know, we'll have three of the facilities done before we get into the second half of the year. In terms of total maintenance, you know, maintenance expense, you know, there's a lot of daylight between now and next year, so a lot of what will actually transpire is gonna be influenced by inflation. I think that in terms of activity it'll be lower. Because, again, this year was a special year in that we focused on catching up on some of the maintenance needs at our key facilities. Okay. Lower is good. The question is how much lower? How much lower? Yeah. I'm not gonna commit to anything right now, Roger, so or John. Okay. No worries, it's Paul. Oh, Paul. Oh, Paul. Sorry. Just lastly on. No worries. Listen, my partner gets it wrong all the time, so. Cheers. Cheers. Just last one. I might have missed this 'cause I joined late, but leadership changes, you know, Rayonier over the past number of years has gone through a number of changes, both, you know, CEO now and CFO side. Just wondering, De Lyle, how you see. Do you see any change in direction of the company going forward? What do you see as the opportunities with Rayonier Advanced Materials, and what are the things that keep you up at night? Well, that's a pretty broad question. Let me see if I can try to answer it as efficiently as I can. With respect to, you know, what keeps me up at night right now, my primary focus is refinancing the 2024 debt. To achieve that, I think the focus that I've got right now is to de-lever the company and improve its credit profile over the next couple of quarters as we enter into 2023. Really it's around a couple of primary activities. One is obviously improving EBITDA, which we've talked about, the different things that we're doing there, both increasing sales volumes as well as taking advantage of market pricing. Also, it's also paying down debt. One of my long-term objectives is to continue to pay down debt to improve the resilience of the company, so that when the market turns on us, that we'll be able to more sustainably operate the business. So that's kind of the short-term objectives right now. Longer term, I again, I'm gonna be focused on paying down debt and keeping the leverage at a reasonable level. But also looking at growing the business by focusing on the growth opportunities for our core products, but also then expanding into other biosolutions that we think that we have a very strong competitive advantage on. We'll be looking at growing the business through those adjacent and through our core businesses. All right. That's all I had. Thanks. Thank you. At this time, there are no more questions. I would now like to turn the floor over to De Lyle Bloomquist. Sir? Well, thank you all for joining us. I know this is a busy time of season for all of you, and I know your time is dear, and so I'm very appreciative of the time that you did spend with us. If you've got any questions in the future or if there's anything we can do, feel free to reach out to us. We'll be there and available for you. With that, I wish you a great day, and thank you for your time. Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.