Packaging Corp of America Q4 2025 Packaging Corp of America Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Packaging Corp of America Earnings Call
Speaker #1: Thank you for
Operator: Thank you for joining Packaging Corporation of America's Q4 and full year 2025 earnings results conference call.
Operator: Thank you for joining Packaging Corporation of America's Q4 and full year 2025 earnings results conference call. Your host today will be Mark Kowlzan, Chairman and Chief Executive Officer of PCA. Upon conclusion of his narrative, there will be a Q&A session. I'll now turn the call over to Mr. Kowlzan. Please proceed when you are ready.
Speaker #1: joining Packaging Corp of America's Fourth Quarter and Full Year 2025 Earnings Results Conference Call. Your host today will be Mark Kowlzan, Chairman and Chief Executive Officer of PCA.
Operator: ... Your host today will be Mark Kowlzan, Chairman and Chief Executive Officer of PCA. Upon conclusion of his narrative, there will be a Q&A session. I'll now turn the call over to Mr. Kowlzan. Please proceed when you are ready.
Speaker #1: Upon conclusion of his narrative, there will be a Q&A session. I'll now turn the call over to Mr. Kowlzan. Please.
Speaker #1: proceed when you are ready.
Speaker #2: Thanks for the introduction, Jamie.
Mark Kowlzan: Thanks for the introduction, Jamie. Good morning, everyone, and thank you all for joining us today and participating in Packaging Corporation of America's Q4 2025 Earnings Release Conference Call. Again, I'm Mark Kowlzan, Chairman and CEO of PCA, and with me on the call today is Tom Hassfurther, our President, and Kent Pflederer, our Chief Financial Officer. I'll begin the call with an overview of our Q4 results, and then I'll be turning the call over to Tom and Kent, who will be providing more details. After that, I'll wrap things up, and then we'd be glad to take questions. Yesterday, we reported Q4 net income of $102 million or $1.13 per share.
Mark Kowlzan: Thanks for the introduction, Jamie. Good morning, everyone, and thank you all for joining us today and participating in Packaging Corporation of America's Q4 2025 Earnings Release Conference Call. Again, I'm Mark Kowlzan, Chairman and CEO of PCA, and with me on the call today is Tom Hassfurther, our President, and Kent Pflederer, our Chief Financial Officer. I'll begin the call with an overview of our Q4 results, and then I'll be turning the call over to Tom and Kent, who will be providing more details. After that, I'll wrap things up, and then we'd be glad to take questions. Yesterday, we reported Q4 net income of $102 million or $1.13 per share.
Speaker #2: Good morning, everyone, and thank you all for joining us today and participating in Packaging Corp of America's Fourth Quarter 2025 Earnings Release Conference Call.
Speaker #2: Again, I'm Mark Kowlzan, Chairman and CEO of PCA, and with me on the call today is Thomas Hassfurther, our President, and and Kent Pflederer, our Chief Financial Officer.
Speaker #2: I'll begin the call with an overview of our fourth quarter results, and then I'll be turning the call over to Thomas and Kent, who will be providing more details.
Speaker #2: After that, I'll wrap things up, and then we'd be glad to take questions. Yesterday, we reported fourth quarter net income of $102 million, or $1.13 per share.
Speaker #2: Excluding the special items, Fourth Quarter 2025 net income was $209 million or $2.32 per share, compared to the Fourth Quarter of 2024's net income of $222 million or share.
Speaker #2: Excluding the special items, fourth quarter 2025 net income was $209 million, or $2.32 per share, compared to the fourth quarter of 2024's net income of $222 million, or $2.47 per share. Fourth quarter net sales were $2.4 billion in 2025 and $2.1 billion in 2024.
Mark Kowlzan: Excluding the special items, Q4 2025 net income was $209 million or $2.32 per share, compared to the Q4 of 2024's net income of $222 million or $2.47 per share. Q4 net sales were $2.4 billion in 2025 and $2.1 billion in 2024. Total company EBITDA for the Q4, excluding special items, was $486 million in 2025 and $439 million in 2024. Excluding special items, we also reported full year 2025 earnings of $888 million or $9.84 per share, compared to 2024's earnings of $815 million or $9.04 per share.
Excluding the special items, Q4 2025 net income was $209 million or $2.32 per share, compared to the Q4 of 2024's net income of $222 million or $2.47 per share. Q4 net sales were $2.4 billion in 2025 and $2.1 billion in 2024. Total company EBITDA for the Q4, excluding special items, was $486 million in 2025 and $439 million in 2024. Excluding special items, we also reported full year 2025 earnings of $888 million or $9.84 per share, compared to 2024's earnings of $815 million or $9.04 per share.
Speaker #2: Total company EBITDA for the fourth quarter, excluding special items, was $486 million in 2025 and $439 million in 2024. Excluding special items, we also reported full-year 2025 earnings of $888 million, or $9.84 per share, compared to 2024's earnings of $815 million, or $9.04 per share.
Speaker #2: Net sales were $9 billion in 2025 and $8.4 billion in 2024. Excluding special items, total company EBITDA in 2025 was $1.86 billion and $1.64 billion in 2024.
Mark Kowlzan: Net sales were $9 billion in 2025 and $8.4 billion in 2024. Excluding special items, total company EBITDA in 2025 was $1.86 billion and $1.64 billion in 2024. Fourth quarter net income included special items expense of $1.19 per share, primarily for the Wallula Mill restructuring charges, as well as costs relating to the acquisition and integration of the Greif containerboard business and costs related to the closure of corrugated products facilities. Details of these special items for both the fourth quarter and full year of 2025 and 2024 were included in the schedules that accompanied the earnings press release. Excluding the special items, our earnings decreased by $0.15 per share compared to the fourth quarter of 2024.
Net sales were $9 billion in 2025 and $8.4 billion in 2024. Excluding special items, total company EBITDA in 2025 was $1.86 billion and $1.64 billion in 2024. Fourth quarter net income included special items expense of $1.19 per share, primarily for the Wallula Mill restructuring charges, as well as costs relating to the acquisition and integration of the Greif containerboard business and costs related to the closure of corrugated products facilities. Details of these special items for both the fourth quarter and full year of 2025 and 2024 were included in the schedules that accompanied the earnings press release. Excluding the special items, our earnings decreased by $0.15 per share compared to the fourth quarter of 2024.
Speaker #2: Fourth quarter net income included special items expense of $1.19 per share, primarily for the Wallula Mill restructuring charges, as well as costs relating to the acquisition and integration of the Greif Containerboard business and costs related to the closure of corrugated products facilities.
Speaker #2: Details of these special items are for both the Fourth Quarter and full year 2025 and 2024 were included in the schedules that accompanied the earnings press release.
Speaker #2: Excluding the special items, our earnings decreased by 15 cents per share compared to the Fourth Quarter of 2024. The decrease was driven primarily by lower production and sales volume in the legacy PCA business for 23 cents, higher operating costs 23 cents, higher maintenance outage expense 14 cents, higher depreciation expense in the legacy PCA packaging business for 7 cents, higher freight expense 6 cents, higher interest expense excluding the Greif acquisition debt for 1 cent, and lower production and sales volume in the paper segment for 1 cent.
Mark Kowlzan: The decrease was driven primarily by lower production and sales volume in the legacy PCA business for $0.23, higher operating costs, $0.23, higher maintenance outage expense, $0.14, higher depreciation expense in the legacy PCA packaging business for $0.07, higher freight expense, $0.06, higher interest expense, excluding the Greif acquisition debt for $0.01, and lower production and sales volume in the paper segment for $0.01. These items were partially offset by higher prices and mix in the packaging segment for $0.50, lower fiber costs, $0.10, lower fixed and other expenses, $0.04, and higher prices and mix in the paper segment, $0.01.
The decrease was driven primarily by lower production and sales volume in the legacy PCA business for $0.23, higher operating costs, $0.23, higher maintenance outage expense, $0.14, higher depreciation expense in the legacy PCA packaging business for $0.07, higher freight expense, $0.06, higher interest expense, excluding the Greif acquisition debt for $0.01, and lower production and sales volume in the paper segment for $0.01. These items were partially offset by higher prices and mix in the packaging segment for $0.50, lower fiber costs, $0.10, lower fixed and other expenses, $0.04, and higher prices and mix in the paper segment, $0.01.
Speaker #2: These items were partially offset by higher prices and mix in the packaging segment for $0.50, lower fiber costs $0.10, lower fixed and other expenses $0.04, and higher prices and mix in the paper segment $0.01.
Speaker #2: The acquired Greif operations including interest on the acquisition indebtedness generated a loss of 5 cents during the Fourth Quarter primarily as a result of extended outages at the Massilon Mill in October and December to perform reliability maintenance activities and manage our inventory at the acquired operations.
Mark Kowlzan: The acquired Greif operations, including interest on the acquisition indebtedness, generated a loss of $0.05 during Q4 2025, primarily as a result of extended outages at the Massillon Mill in October and December to perform reliability maintenance activities and manage our inventory at the acquired operations. Looking at our packaging business, EBITDA, excluding special items in Q4 2025, of $476 million, with sales of $2.2 billion, resulted in a margin of 21.7% versus last year's EBITDA of $426 million, sales of $2 billion, or a 21.5% margin.
The acquired Greif operations, including interest on the acquisition indebtedness, generated a loss of $0.05 during Q4 2025, primarily as a result of extended outages at the Massillon Mill in October and December to perform reliability maintenance activities and manage our inventory at the acquired operations. Looking at our packaging business, EBITDA, excluding special items in Q4 2025, of $476 million, with sales of $2.2 billion, resulted in a margin of 21.7% versus last year's EBITDA of $426 million, sales of $2 billion, or a 21.5% margin.
Speaker #2: Looking at our packaging business, EBITDA excluding special items in the fourth quarter 2025 of $476 million, with sales of $2.2 billion, resulted in a margin of 21.7% versus last year's EBITDA of $426 million, sales of $2 billion, or a 21.5% margin.
Speaker #2: For the full year 2025, packaging segment EBITDA excluding special items was $1.83 billion, with sales of $8.3 billion, or a 22.1% margin, compared to the full year 2024 EBITDA of $1.6 billion with sales of $7.7 billion, or a 20.8% margin.
Mark Kowlzan: For the full year 2025, packaging segment EBITDA, excluding special items, was $1.83 billion, with sales of $8.3 billion, or a 22.1% margin, compared to the full year 2024 EBITDA of $1.6 billion, with sales of $7.7 billion or a 20.8% margin. We ran to demand during the quarter, and with the planned derigger maintenance outage and a full quarter of ownership of the acquired Greif operations, we produced 1,407,000 tons of containerboard. The legacy mills produced 1,235,000 tons of containerboard, 20,000 tons less than Q3 and 75,000 tons less than Q4 of 2024.
For the full year 2025, packaging segment EBITDA, excluding special items, was $1.83 billion, with sales of $8.3 billion, or a 22.1% margin, compared to the full year 2024 EBITDA of $1.6 billion, with sales of $7.7 billion or a 20.8% margin. We ran to demand during the quarter, and with the planned derigger maintenance outage and a full quarter of ownership of the acquired Greif operations, we produced 1,407,000 tons of containerboard. The legacy mills produced 1,235,000 tons of containerboard, 20,000 tons less than Q3 and 75,000 tons less than Q4 of 2024.
Speaker #2: We ran to demand during the quarter, and with the plan to rid our maintenance outage and a full quarter of ownership of the acquired Greif operations, we produced 1,407,000 tons of containerboard.
Speaker #2: The legacy mills produced $1,235,000 tons of container board; 20,000 tons less than the third quarter and 75,000 tons less than the fourth quarter of 2024.
Speaker #2: System-wide, our inventories were at the same level as at the end of the third quarter, and with the acquired Greif operations, 84,000 tons up from the beginning of the year.
Mark Kowlzan: System-wide, our inventories were at the same level as at the end of Q3, and with the acquired Greif operations, 84,000 tons up from the beginning of the year. Operational performance during the quarter was again strong across the entire mill system and corrugated system, and we managed costs extremely well throughout the company. We made good progress on the integration and improvement of the acquired Greif assets, with better reliability and performance at both mills and completion of key systems integration activities.... We do not expect to take any additional outages at the mills until their annual maintenance outages later in the year, and we'll operate the business at capacity. We're on track to complete the Wallula restructuring activities by mid-February, and we will begin to benefit from the improved cost structure beginning in March.
System-wide, our inventories were at the same level as at the end of Q3, and with the acquired Greif operations, 84,000 tons up from the beginning of the year. Operational performance during the quarter was again strong across the entire mill system and corrugated system, and we managed costs extremely well throughout the company. We made good progress on the integration and improvement of the acquired Greif assets, with better reliability and performance at both mills and completion of key systems integration activities.... We do not expect to take any additional outages at the mills until their annual maintenance outages later in the year, and we'll operate the business at capacity. We're on track to complete the Wallula restructuring activities by mid-February, and we will begin to benefit from the improved cost structure beginning in March.
Speaker #2: Operational performance during the quarter was again strong across the entire mill system and corrugated system, and we managed costs extremely well throughout the company.
Speaker #2: We made good progress on the integration and improvement of the acquired Greif assets, with better reliability and performance at both mills, and completion of key systems integration activities.
Speaker #2: We did not expect to take any additional outages at the mills until their annual maintenance outages later in the year and will operate the business at capacity.
Speaker #2: We're on track to complete the Wallula restructuring activities by mid-February, and we will begin to benefit from the improved cost structure beginning in March.
Speaker #2: I'd like to give an update on the gas turbine energy projects that we're currently working on in the engineering phase. The plan includes the installation of gas turbines at the Jackson Alabama Mill and the Riverville Virginia Mills over the next 30 months.
Mark Kowlzan: I'd like to give an update on the gas turbine energy projects that we're currently working on in the engineering phase. The plan includes the installation of gas turbines at the Jackson, Alabama mill, and the Riverville, Virginia mills over the next 30 months. These locations have relatively high purchased power costs and good, reliable gas supply, as well as demand for the additional power that we can internally generate. We expect that these projects would involve roughly $250 million of total capital, some to be spent in 2026, but most of it coming in 2027 and 2028. The expected returns are in the mid to high teens, and most importantly, it would make us energy, electricity independent at these facilities and protect us from future rising electric rates.
I'd like to give an update on the gas turbine energy projects that we're currently working on in the engineering phase. The plan includes the installation of gas turbines at the Jackson, Alabama mill, and the Riverville, Virginia mills over the next 30 months. These locations have relatively high purchased power costs and good, reliable gas supply, as well as demand for the additional power that we can internally generate. We expect that these projects would involve roughly $250 million of total capital, some to be spent in 2026, but most of it coming in 2027 and 2028. The expected returns are in the mid to high teens, and most importantly, it would make us energy, electricity independent at these facilities and protect us from future rising electric rates.
Speaker #2: These locations have relatively high purchased power costs and good reliable gas supply as well as demand for the additional power that we can internally generate.
Speaker #2: We expect that these projects would involve roughly $250 million of total capital, some to be spent in 2026, but most of it coming in 2027 and 2028.
Speaker #2: The expected returns are in the mid to high teens, and most importantly, it's electricity independent at these facilities and protects us from future rising energy electric rates.
Speaker #2: We're finalizing the scope and we'll seek board approval during the first quarter. We're also working on plans for a third installation at one of our mills and we'll provide more details at the appropriate time.
Mark Kowlzan: We're finalizing the scope, and we'll seek board approval during the first quarter. We're also working on plans for a third installation at one of our mills, and we'll provide more details at the appropriate time. We have a lot of good options, and that we're considering all of these. I'm now gonna turn it over to Tom, who will provide more details on containerboard sales and the corrugated business. Tom?
We're finalizing the scope, and we'll seek board approval during the first quarter. We're also working on plans for a third installation at one of our mills, and we'll provide more details at the appropriate time. We have a lot of good options, and that we're considering all of these. I'm now gonna turn it over to Tom, who will provide more details on containerboard sales and the corrugated business. Tom?
Speaker #2: We have a lot of good options and we're considering all of these. I'm not going to turn it over to Tom who'll provide more details on container board sales in the corrugated business.
Speaker #2: Tom? Thanks, Mark. Domestic container board and corrugated products prices and mix were 50 cents per share above the fourth quarter of 2024 and down 32 cents per share compared to the third quarter of 2025.
Thomas Hassfurther: Thanks, Mark. Domestic containerboard and corrugated products, prices, and mix were $0.50 per share above the Q4 2024, and down $0.32 per share compared to the Q3 2025. This is mix related, as our fourth quarter is seasonally less rich, incorporating more holiday-driven e-com. Export containerboard prices were flat with last year's fourth quarter, and down $0.01 from the Q3 2025. Export sales volume of containerboard was up 12,000 tons from the Q3 2025, and down 15,000 tons from the Q4 2024. In the legacy business, corrugated shipments per day and in total were down 1.7% versus last year's record fourth quarter, when per-day shipments were up more than 9% over 2023.
Thomas Hassfurther: Thanks, Mark. Domestic containerboard and corrugated products, prices, and mix were $0.50 per share above the Q4 2024, and down $0.32 per share compared to the Q3 2025. This is mix related, as our fourth quarter is seasonally less rich, incorporating more holiday-driven e-com. Export containerboard prices were flat with last year's fourth quarter, and down $0.01 from the Q3 2025. Export sales volume of containerboard was up 12,000 tons from the Q3 2025, and down 15,000 tons from the Q4 2024. In the legacy business, corrugated shipments per day and in total were down 1.7% versus last year's record fourth quarter, when per-day shipments were up more than 9% over 2023.
Speaker #2: This is mix-related, as our fourth quarter is seasonally less rich, incorporating more holiday-driven e-com. Export containerboard prices were flat with last year's fourth quarter and down $0.01 from the third quarter of 2025.
Speaker #2: Export sales volume of container board was up 12,000 tons from the third quarter of 2025 and down 15,000 tons from the fourth quarter of 2024.
Speaker #2: In the legacy business, corrugated shipments per day and in total were down 1.7% versus last year's record fourth quarter when per day shipments were up more than 9% over 2023.
Speaker #2: That said, 2025 fourth quarter legacy box plant shipments were the second highest ever. For the year, our corrugated shipments were essentially flat with 2024.
Thomas Hassfurther: That said, 2025 Q4 legacy box plant shipments were the second highest ever. For the year, our corrugated shipments were essentially flat with 2024. Our order book strengthened in November and December, and though we were ultimately disappointed with December shipment volume, we've seen this strength reflected in January shipments so far. While our corrugated volume and mix ended up below our Q4 forecast, the underlying volume trends were positive heading into 2026. To provide a little more color, December got off to a strong start, leading us to believe that we would grow our volume over last year. Later in the month, customers appeared to manage their already low inventories further down for year-end. The exception was e-commerce, which continued to remain strong well into the first week of January. In addition to the volume implications, this unfavorably impacted our December mix.
That said, 2025 Q4 legacy box plant shipments were the second highest ever. For the year, our corrugated shipments were essentially flat with 2024. Our order book strengthened in November and December, and though we were ultimately disappointed with December shipment volume, we've seen this strength reflected in January shipments so far. While our corrugated volume and mix ended up below our Q4 forecast, the underlying volume trends were positive heading into 2026. To provide a little more color, December got off to a strong start, leading us to believe that we would grow our volume over last year. Later in the month, customers appeared to manage their already low inventories further down for year-end. The exception was e-commerce, which continued to remain strong well into the first week of January. In addition to the volume implications, this unfavorably impacted our December mix.
Speaker #2: Our order book strengthened in November and December and though we were ultimately disappointed with December shipment volume, we've seen this strength reflected in January shipments so far.
Speaker #2: While our corrugated volume and mix ended up below our fourth quarter forecast, the underlying volume trends were positive heading into 2026. To provide a little more color, December got off to a strong start leading us to believe that we would grow our volume over last year.
Speaker #2: Later in the month, customers appeared to manage their already low inventories further down for year-end. The exception was e-commerce which continued to remain strong well into the first week of January.
Speaker #2: In addition to the volume implications, this unfavorably impacted our December mix. The good news is that January is up significantly in terms of bookings and billings, from a strong comp in 2025 where we were up 5% over 2024.
Thomas Hassfurther: The good news is, is that January is up significantly in terms of bookings and billings from a strong comp in 2025, where we were up 5% over 2024. January bookings in our legacy corrugated and sheet plants are up over 11%, and billings are up 8% on a per-day basis through last Thursday. We're seeing improvement across our customer base, which is a good sign for healthier underlying demand. Based on what we've seen so far, we are forecasting solid year-over-year growth for Q1 and seasonal improvement in our mix. Our containerboard system is tightening up, and we will need to run at full capacity to support our demand. Including the acquisition, shipments were up 17% over last year for Q4 and 6% for the year.
The good news is, is that January is up significantly in terms of bookings and billings from a strong comp in 2025, where we were up 5% over 2024. January bookings in our legacy corrugated and sheet plants are up over 11%, and billings are up 8% on a per-day basis through last Thursday. We're seeing improvement across our customer base, which is a good sign for healthier underlying demand. Based on what we've seen so far, we are forecasting solid year-over-year growth for Q1 and seasonal improvement in our mix. Our containerboard system is tightening up, and we will need to run at full capacity to support our demand. Including the acquisition, shipments were up 17% over last year for Q4 and 6% for the year.
Speaker #2: January bookings in our legacy corrugated and sheet plants are up over 11%, and billings are up 8% on a per-day basis through last Thursday.
Speaker #2: We're seeing improvement across our customer base, which is a good sign for healthier underlying demand. Based on what we've seen so far, we are forecasting solid year-over-year growth for the first quarter and seasonal improvement in our mix.
Speaker #2: Our container board system is tightening up and we will need to run at full capacity to support our demand. Including the acquisition, shipments were up 17% over last year for the fourth quarter and 6% for the year.
Speaker #2: The acquired plants had a very good quarter, outperforming our expectations and are also off to a strong start to the year. We made good progress on integration and are working toward operating as a single corrugated system as soon as we can with systems integration work ongoing.
Thomas Hassfurther: The acquired plants had a very good quarter, outperforming our expectations, and are also off to a strong start to the year. We made good progress on integration and are working toward operating as a single corrugated system as soon as we can, with systems integration work ongoing. We still have work to do to optimize the inventory levels and paper grades carried by the acquired plants. We are working off the remaining containerboard purchase and trade commitments, and ended the quarter at approximately the same inventory levels that we began, which is higher than what we had forecast. We had planned to bring the inventory levels down significantly while simplifying the grades, carried the plants, and leveraging the larger integrated system. This will take place over the next two quarters, and better day-to-day visibility, once our systems are in place, will certainly help us.
The acquired plants had a very good quarter, outperforming our expectations, and are also off to a strong start to the year. We made good progress on integration and are working toward operating as a single corrugated system as soon as we can, with systems integration work ongoing. We still have work to do to optimize the inventory levels and paper grades carried by the acquired plants. We are working off the remaining containerboard purchase and trade commitments, and ended the quarter at approximately the same inventory levels that we began, which is higher than what we had forecast. We had planned to bring the inventory levels down significantly while simplifying the grades, carried the plants, and leveraging the larger integrated system. This will take place over the next two quarters, and better day-to-day visibility, once our systems are in place, will certainly help us.
Speaker #2: We still have work to do to optimize the inventory levels and paper grades carried by the acquired plants. We are working off the remaining container board purchase and trade commitments and ended the quarter at approximately the same inventory levels that we began which is higher than what we had forecast.
Speaker #2: We had planned to bring the inventory levels down significantly while simplifying the grades carried at the plants and leveraging the larger integrated system. This will take place over the next two quarters and better day-to-day visibility once our systems are in place will certainly help us.
Speaker #2: Last week as you know we notified our customers of a $70 per ton price increase on our liner board and corrugated medium grades effective March 1st.
Thomas Hassfurther: Last week, as you know, we notified our customers of a $70 per ton price increase on our linerboard and corrugated medium grades, effective March 1. We will work as we normally do to implement the full price increase. I'll now turn it back to Mark.
Last week, as you know, we notified our customers of a $70 per ton price increase on our linerboard and corrugated medium grades, effective March 1. We will work as we normally do to implement the full price increase. I'll now turn it back to Mark.
Speaker #2: We will work as we normally do to implement the full price increase. And I'll
Speaker #2: Turn it back to Mark. Thanks,
Mark Kowlzan: Thanks, Tom. Looking at the paper segment, EBITDA, excluding special items in Q4, was $37 million, with sales of $154 million, or a 24.2% margin compared to Q4 2024 EBITDA of $39 million and sales of $151 million, or a 25.9% margin. Sales volume was 1% above Q4 2024, and 4% below Q3 2025. Prices and mix were up 1% from Q4 2024, and down less than 1% from Q3 2025. Performance exceeded our expectation on higher sales volume and strong underlying operating performance at the International Falls mill.
Mark Kowlzan: Thanks, Tom. Looking at the paper segment, EBITDA, excluding special items in Q4, was $37 million, with sales of $154 million, or a 24.2% margin compared to Q4 2024 EBITDA of $39 million and sales of $151 million, or a 25.9% margin. Sales volume was 1% above Q4 2024, and 4% below Q3 2025. Prices and mix were up 1% from Q4 2024, and down less than 1% from Q3 2025. Performance exceeded our expectation on higher sales volume and strong underlying operating performance at the International Falls mill. For the full year, paper segment EBITDA was $148 million with $615 million of sales, for a 24.1% margin. 2024's EBITDA was $154 million on sales of $625 million, for a 24.6% margin. I'll now turn it over to Kent.
Speaker #1: Tom. Looking at the paper segment, EBITDA excluding special items in the fourth quarter was $37 million with sales of $154 million, or a 24.2% margin, compared to the fourth quarter 2024 EBITDA of $39 million and sales of $151 million, or a 25.9% margin.
Speaker #1: Sales volume was 1% above the fourth quarter of 2024 and 4% below the third quarter of 2025. Prices and mix were up 1% from the fourth quarter of 2024 and down less than a percent from the third quarter of 2025.
Speaker #1: Performance exceeded our expectations on higher sales volume and strong underlying operating performance at the International Falls Mill. For the full year, paper segment EBITDA was $148 million, with $615 million of sales for a 24.1% margin.
Mark Kowlzan: For the full year, paper segment EBITDA was $148 million with $615 million of sales, for a 24.1% margin. 2024's EBITDA was $154 million on sales of $625 million, for a 24.6% margin. I'll now turn it over to Kent.
Speaker #1: 2024's EBITDA was $154 million on sales of $625 million for a 24.6% margin. I'll now turn it over to
Speaker #1: Kent.
Kent Pflederer: Thanks, Mark. Cash provided by operations was a fourth-quarter record, $443 million, and after $319 million of CapEx, free cash flow was $124 million. In addition to CapEx, the primary payments of cash during the quarter included share repurchases of $153 million, dividend payments of $112 million, net interest payments of $53 million, and cash tax payments of $15 million. We repurchased 760,000 shares during the quarter at an average price of $201.03. We have approximately $283 million of remaining repurchase authority. For the full year 2025, cash from operations was $1.55 billion, with capital spending of $829 million, and free cash flow of $725 million.
Kent Pflederer: Thanks, Mark. Cash provided by operations was a fourth-quarter record, $443 million, and after $319 million of CapEx, free cash flow was $124 million. In addition to CapEx, the primary payments of cash during the quarter included share repurchases of $153 million, dividend payments of $112 million, net interest payments of $53 million, and cash tax payments of $15 million. We repurchased 760,000 shares during the quarter at an average price of $201.03. We have approximately $283 million of remaining repurchase authority. For the full year 2025, cash from operations was $1.55 billion, with capital spending of $829 million, and free cash flow of $725 million.
Speaker #2: Mark. Cash provided by operations was a fourth quarter record 443 million dollars and after 319 million of CapEx free cash flow was 124 million.
Speaker #2: In addition to CapEx, the primary payments of cash during the quarter included share repurchases of 153 million dividend payments of 112 million net interest payments of 53 million and cash tax payments of 15 million.
Speaker #2: We repurchased 760,000 shares during the quarter at an average price of 201.03. We have approximately 283 million of remaining repurchase authority. For the full year '25, cash from operations was 1.55 billion dollars with capital spending of 829 million and free cash flow of 725 million dollars.
Speaker #2: Our year-end cash on hand balance including marketable securities was 668 million dollars with liquidity of about one and a quarter billion dollars. Our final recurring effective tax rate for 2025 was 24.7%.
Kent Pflederer: Our year-end cash on hand balance, including marketable securities, was $668 million, with a liquidity of about $1.25 billion. Our final recurring effective tax rate for 2025 was 24.7%. Regarding full year estimates of certain key items for the upcoming year, we currently estimate dividend payments of $450 million, total CapEx to be in the range of $840 to $870 million, and DD&A is expected to be approximately $700 million. Our full year interest expense in 2026 is expected to be approximately $139 million, and net cash interest payment should be about $147 million. The estimate for our book 2026 book effective tax rate is 25%.
Our year-end cash on hand balance, including marketable securities, was $668 million, with a liquidity of about $1.25 billion. Our final recurring effective tax rate for 2025 was 24.7%. Regarding full year estimates of certain key items for the upcoming year, we currently estimate dividend payments of $450 million, total CapEx to be in the range of $840 to $870 million, and DD&A is expected to be approximately $700 million. Our full year interest expense in 2026 is expected to be approximately $139 million, and net cash interest payment should be about $147 million. The estimate for our book 2026 book effective tax rate is 25%.
Speaker #2: Regarding full year estimates of certain key items for the upcoming year, we currently estimate dividend payments of $450 million, total CapEx to be in the range of $840 to $870 million, and DD&A is expected to be approximately $700 million. Interest expense in 2026 is expected to be approximately $X million.
Speaker #2: Our full year 139 million and net cash interest payment should be about 147 million. The estimate for our book 2026 book effective tax rate is 25%.
Speaker #2: We have planned annual outages in 2026 at all of our mills. Which will cover a higher number of outage days and tons in 2025 including lost volume direct costs and amortized repair costs we currently expect the outages to total about $1.39 a share.
Kent Pflederer: We have planned annual outages in 2026 at all of our mills, which will cover a higher number of outage days and tons in 2025. Including lost volume, direct costs, and amortized repair costs, we currently expect the outages to total about $1.39 a share. The current estimated impact by quarter during the year is $0.16 in Q1, $0.35 in Q2, $0.24 in Q3, and $0.63 in Q4. I'll now turn it back over to Mark.
We have planned annual outages in 2026 at all of our mills, which will cover a higher number of outage days and tons in 2025. Including lost volume, direct costs, and amortized repair costs, we currently expect the outages to total about $1.39 a share. The current estimated impact by quarter during the year is $0.16 in Q1, $0.35 in Q2, $0.24 in Q3, and $0.63 in Q4. I'll now turn it back over to Mark.
Speaker #2: The current estimated impact by quarter during the year is 16 cents in the first, 35 cents in the second, 24 cents in the third, and 63 cents in the fourth.
Speaker #2: I'll now turn it back over to
Speaker #2: Mark. Thanks,
Mark Kowlzan: Thanks, Kent. Our employees put in a tremendous effort and delivered outstanding results for PCA during 2025, when business conditions were challenging at various times. We completed the acquisition of the Greif business and achieved significant progress on integration and improving the operations. We successfully started up our Glendale, Arizona plant and completed numerous capital and operational projects to improve our capabilities and efficiency in our corrugated business and continue to serve and profitably grow with our customers. Our paper business continued to deliver outstanding results through its commitment to customer service and manufacturing excellence. As a company, we still have many key strategic capital opportunities in progress or ahead for the 2026 year and beyond. Our balance sheet remains high quality. We have the flexibility to continue to take advantages of internal or external investment opportunities that generate shareholder value.
Mark Kowlzan: Thanks, Kent. Our employees put in a tremendous effort and delivered outstanding results for PCA during 2025, when business conditions were challenging at various times. We completed the acquisition of the Greif business and achieved significant progress on integration and improving the operations. We successfully started up our Glendale, Arizona plant and completed numerous capital and operational projects to improve our capabilities and efficiency in our corrugated business and continue to serve and profitably grow with our customers. Our paper business continued to deliver outstanding results through its commitment to customer service and manufacturing excellence. As a company, we still have many key strategic capital opportunities in progress or ahead for the 2026 year and beyond. Our balance sheet remains high quality. We have the flexibility to continue to take advantages of internal or external investment opportunities that generate shareholder value.
Speaker #1: Kent. Our employees put in a for PCA during tremendous effort and delivered outstanding results 2025 when business conditions were challenging at various times. We completed the acquisition of the great business and achieved significant progress on integration and improving the operations.
Speaker #1: We successfully started up our Glendale Arizona plant and completed numerous capital and operational projects to improve our capabilities and efficiency in our corrugated business and continue to serve and profitably grow with our customers.
Speaker #1: Our paper business continued to deliver outstanding results through its commitment to customer service and manufacturing excellence. As a company, we still have many key strategic capital opportunities in progress or ahead for the 2026 year and beyond.
Speaker #1: Our balance sheet remains high quality; we have flexibility to continue to take advantage of internal or external investment opportunities that generate shareholder value. We continue our time-tested and balanced approach towards capital allocation, investing in our business to profitably grow our earnings and cash flows, and returning value to shareholders through dividends and buybacks.
Mark Kowlzan: We continue our time-tested and balanced approach towards capital allocation, investing in our business to profitably grow our earnings and cash flows, and returning value to shareholders through dividends and buybacks. We accomplished a lot in 2025 and are positioned to accomplish even more this year. Looking ahead, as we move from the fourth and into the first quarter, as Tom mentioned, we see demand improving and expect year-over-year growth in corrugated volume in our legacy box plants and strong shipment volume from the acquired plants. First quarter volume is seasonally lower than the fourth quarter, and even with one more shipping day, overall volume is expected to be slightly lower than the fourth quarter.
We continue our time-tested and balanced approach towards capital allocation, investing in our business to profitably grow our earnings and cash flows, and returning value to shareholders through dividends and buybacks. We accomplished a lot in 2025 and are positioned to accomplish even more this year. Looking ahead, as we move from the fourth and into the first quarter, as Tom mentioned, we see demand improving and expect year-over-year growth in corrugated volume in our legacy box plants and strong shipment volume from the acquired plants. First quarter volume is seasonally lower than the fourth quarter, and even with one more shipping day, overall volume is expected to be slightly lower than the fourth quarter.
Speaker #1: We accomplished a lot in 2025 and are positioned to accomplish even more this year. Looking ahead, as we move from the fourth and into the first quarter, as Tom mentioned, we see demand improving and expect year-over-year growth in corrugated volume in our legacy box plants and strong shipment volume from the acquired plants.
Speaker #1: First quarter volume is seasonally lower than the fourth quarter and even with one more shipping day overall volume is expected to be slightly lower than the fourth quarter.
Speaker #1: We'll now be running our mills full, but production will be lower than the fourth quarter with two fewer operating days, slightly more outage tons, and we'll rule the running in its new reconfigured state.
Mark Kowlzan: We'll now be running our mills full, but production will be lower than the fourth quarter, with two fewer operating days, slightly more outage tons, and Wallula running in its new reconfigured state. We expect slightly lower inventory levels at the quarter end. Price and mix will seasonally improve, and we expect to see some benefits from our container board price increase in March. Export container board sales will be slightly higher than the fourth quarter, and prices should be flat to slightly down. Paper volumes will be lower, with two fewer operating days, and price mix is expected to be slightly lower and will begin to improve in March with our recently announced uncoated free sheet price increase. With the exception of fiber prices, we expect price inflation across most of our direct, indirect, and fixed operating and converting costs.
We'll now be running our mills full, but production will be lower than the fourth quarter, with two fewer operating days, slightly more outage tons, and Wallula running in its new reconfigured state. We expect slightly lower inventory levels at the quarter end. Price and mix will seasonally improve, and we expect to see some benefits from our container board price increase in March. Export container board sales will be slightly higher than the fourth quarter, and prices should be flat to slightly down. Paper volumes will be lower, with two fewer operating days, and price mix is expected to be slightly lower and will begin to improve in March with our recently announced uncoated free sheet price increase. With the exception of fiber prices, we expect price inflation across most of our direct, indirect, and fixed operating and converting costs.
Speaker #1: We expect slightly lower inventory levels at the quarter end. Price and mix will seasonally improve and we expect to see some benefits from our container board price increase in March.
Speaker #1: Export containerboard sales will be slightly higher than the fourth quarter, and prices should be flat to slightly down. Paper volumes will be lower with two fewer operating days, and price mix is expected to be slightly lower and will begin to improve in March with our recently announced uncoated freesheet price increase.
Speaker #1: With the exception of fiber prices, we expect price inflation across most of our direct, indirect, and fixed operating and converting costs. In addition, wood, energy, and chemical costs will also increase due to winter conditions that impact usage and yields for these items.
Mark Kowlzan: In addition, wood, energy, and chemical costs will also increase due to winter conditions that impact usages and yields for these items. Our cost structure will begin to benefit from the Wallula reconfiguration during the month of March. Labor and benefits costs will be higher due to the normal timing-related items that occur at the beginning of the new year for annual increases, the restart of payroll taxes, and share-based compensation expenses. Freight will be slightly higher, and we expect slightly lower depreciation expense. Lastly, scheduled outage expenses will be lower, and we assume a lower corporate tax rate. Considering these items, we expect Q1 earnings of $2.20 per share, excluding special items.
In addition, wood, energy, and chemical costs will also increase due to winter conditions that impact usages and yields for these items. Our cost structure will begin to benefit from the Wallula reconfiguration during the month of March. Labor and benefits costs will be higher due to the normal timing-related items that occur at the beginning of the new year for annual increases, the restart of payroll taxes, and share-based compensation expenses. Freight will be slightly higher, and we expect slightly lower depreciation expense. Lastly, scheduled outage expenses will be lower, and we assume a lower corporate tax rate. Considering these items, we expect Q1 earnings of $2.20 per share, excluding special items.
Speaker #1: Our cost structure will begin to benefit from the willow reconfiguration during the month of March. Labor and benefits costs will be higher due to the normal timing-related items that occur at the beginning of the new year for annual increases the restart of payroll taxes and share-based compensation expenses.
Speaker #1: Freight will be slightly higher and we expect slightly lower depreciation expense. Lastly, scheduled outage expenses will be lower and we assume a lower corporate tax rate.
Speaker #1: Considering these items, we expect first quarter earnings of $2.20 per share, excluding special items. We are, in fact, assessing last weekend's winter storm across multiple regions, which caused some of our plants to be down earlier in the week and which could negatively impact shipments and operating and transportation costs for the quarter.
Mark Kowlzan: We are, in fact, assessing last weekend's winter storm across multiple regions, which caused some of our plants to be down earlier in the week, and which could negatively impact shipments and operating and transportation costs for the quarter. With that, we'd be happy to entertain any questions, but I must remind you that some of the statements we've made on the call constituted forward-looking statements. The statements were based on current estimates, expectations, and projections of the company, and involve inherent risks and uncertainties, including the direction of the economy, and those identified as risk factors in the annual report on Form 10-K on file with the SEC. Actual results could differ materially from those expressed in the forward-looking statements. And with that, Jamie, I'd like to open the call for the Q&A.
We are, in fact, assessing last weekend's winter storm across multiple regions, which caused some of our plants to be down earlier in the week, and which could negatively impact shipments and operating and transportation costs for the quarter. With that, we'd be happy to entertain any questions, but I must remind you that some of the statements we've made on the call constituted forward-looking statements. The statements were based on current estimates, expectations, and projections of the company, and involve inherent risks and uncertainties, including the direction of the economy, and those identified as risk factors in the annual report on Form 10-K on file with the SEC. Actual results could differ materially from those expressed in the forward-looking statements. And with that, Jamie, I'd like to open the call for the Q&A.
Speaker #1: With that, we'd be happy to entertain any questions, but I must remind you that some of the statements we've made on the call constitute forward-looking statements.
Speaker #1: The statements were based on current estimates, expectations, and projections of the company and involve inherent risks and uncertainties including the direction of the risk factors in the annual report economy and those identified as on Form 10-K on file with the SEC.
Speaker #1: Actual results could differ materially from those expressed in the forward-looking statements. And with that, Jamie, I'd like to open the call for the Q&A.
Speaker #2: And ladies and gentlemen, at this time we'll begin that question and answer session. To ask a question, you may press star and then one.
Operator: Ladies and gentlemen, at this time, we'll begin that question-and-answer session. To ask a question, you may press Star and then one. To withdraw your questions, you may press Star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is Star and then one to join the question queue. Our first question today comes from George Staphos from Bank of America Securities. Please go ahead with your question.
Operator: Ladies and gentlemen, at this time, we'll begin that question-and-answer session. To ask a question, you may press Star and then one. To withdraw your questions, you may press Star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is Star and then one to join the question queue. Our first question today comes from George Staphos from Bank of America Securities. Please go ahead with your question.
Speaker #2: To withdraw your question, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality.
Speaker #2: Once again, that is star and then one. To join the question queue. Our first question today comes from George Staffos from Bank of America Securities.
Speaker #2: Please go ahead with your question.
Speaker #3: Thanks. Everyone, good morning. Thanks for the details. Hope you're doing well. I guess the first question I had is on operations in the mills, and I guess, yeah, in the mills overall.
George Leon Staphos: Thanks. Hi, everyone. Good morning. Thanks for the details. I hope you're doing well. I guess the first question I had is on operations in the mills, and I guess, yeah, in the mills overall. We have the outages. You call out the sequential pickup in variable costs, you know, for inputs. We have fewer days and also gonna be trying to take down inventory to some degree. Kent, is there a way to maybe size or give us a bit more granularity on what looks like it'll be a, you know, a decent increase in cost per ton in the containerboard business? You know, we're not surprised by the Q1 sequential drop, but just trying to figure out in earnings.
George Staphos: Thanks. Hi, everyone. Good morning. Thanks for the details. I hope you're doing well. I guess the first question I had is on operations in the mills, and I guess, yeah, in the mills overall. We have the outages. You call out the sequential pickup in variable costs, you know, for inputs. We have fewer days and also gonna be trying to take down inventory to some degree. Kent, is there a way to maybe size or give us a bit more granularity on what looks like it'll be a, you know, a decent increase in cost per ton in the containerboard business? You know, we're not surprised by the Q1 sequential drop, but just trying to figure out in earnings. Just trying to get a, maybe a little more granularity on what the cost per ton might look like for Q2 to Q1.
Speaker #3: We have the outages, you have costs, you know, for pickup in variable inputs. We have, you know, fewer days, and also you're going to be trying to take down inventory to some degree.
Speaker #3: Kent, is there a way to maybe size or give us a bit more granularity on what looks like it'll be a, you know, a decent increase in cost per ton in the containerboard business?
Speaker #3: You know, we're not surprised by the one-queue sequential drop, but just trying to figure out in earnings, just trying to get maybe a little bit more granularity on what the cost per ton might look like for queue to
George Leon Staphos: Just trying to get a, maybe a little more granularity on what the cost per ton might look like for Q2 to Q1.
Speaker #3: one-queue.
Mark Kowlzan: I'm not sure. You know, we're gonna run the system full. We've got the typical, you know, seasonal weather impacts taking place along with the recent storm. So there's some uncertainty there. But again, we're basically faced with the normal, you know, year-over-year inflationary concerns that we always see in January with labor, medical benefits, cost type matters, and then just the winter usage and yield matters with energy and wood. I'd again like to give you a number, but I don't have that off the top of my head.
Speaker #1: I'm not
Mark Kowlzan: I'm not sure. You know, we're gonna run the system full. We've got the typical, you know, seasonal weather impacts taking place along with the recent storm. So there's some uncertainty there. But again, we're basically faced with the normal, you know, year-over-year inflationary concerns that we always see in January with labor, medical benefits, cost type matters, and then just the winter usage and yield matters with energy and wood. I'd again like to give you a number, but I don't have that off the top of my head.
Speaker #1: sure we're going to run the system full. We've got the typical, you know, seasonal weather impacts taking place along with the recent storm, so there's some uncertainty there.
Speaker #1: again, we're But basically faced with the normal year-over-year inflationary concerns that we always see in January. With labor, medical benefits, cost-type matters, and then just the winter usage and yield matters with energy and wood.
Speaker #1: Again, I'd like to give you a number, but I don't have that off the top of my head.
Speaker #3: No, that's okay, Mark. I guess maybe a related question. I know you're still assessing but what have you built into your guidance for the quarter related to the winter storms from an earnings standpoint or more sort of a factor standpoint, you know, from a volume versus cost
George Leon Staphos: No, that's okay, Mark. I guess maybe a related question. I know you're still assessing, but what have you built into your guidance for the quarter related to the winter storms, you know, from an earnings standpoint or more, you know, through a factor standpoint, you know, from a volume versus cost, qualitatively?
George Staphos: No, that's okay, Mark. I guess maybe a related question. I know you're still assessing, but what have you built into your guidance for the quarter related to the winter storms, you know, from an earnings standpoint or more, you know, through a factor standpoint, you know, from a volume versus cost, qualitatively?
Speaker #3: quality? You know,
Mark Kowlzan: You know, George, we're just starting. You know, we've had plants down from the Texas region all the way across the Gulf region up through the Mid-Atlantic. Some of these areas are still down without power. We've got power outages continuing in Tennessee. The Dallas region is, you know, has thawed out and coming back, but things are coming back as we speak, literally on the call this morning. The mills ran through this. The two biggest mills that were impacted, the Counce, Tennessee mill and the Riverville, Virginia mill, both mills did run through this quite well. We had exceptional support from all of the employees, and the mills ran through this. The problem was we couldn't ship any tons out during the period of time.
Mark Kowlzan: You know, George, we're just starting. You know, we've had plants down from the Texas region all the way across the Gulf region up through the Mid-Atlantic. Some of these areas are still down without power. We've got power outages continuing in Tennessee. The Dallas region is, you know, has thawed out and coming back, but things are coming back as we speak, literally on the call this morning. The mills ran through this. The two biggest mills that were impacted, the Counce, Tennessee mill and the Riverville, Virginia mill, both mills did run through this quite well. We had exceptional support from all of the employees, and the mills ran through this. The problem was we couldn't ship any tons out during the period of time.
Speaker #1: starting we've had plants down from the Texas region all the way across the Gulf region up through the Mid-Atlantic. Some of these areas are still down without power.
Speaker #1: We've got power outages continuing in Tennessee. The Dallas region is, you know, has thawed out and coming back, but things are coming back as we speak literally on the call this morning.
Speaker #1: You know, the mills ran through this that the two biggest mills that were impacted, the Counts, Tennessee Mill and the River Mill, Virginia Mill, both mills did run through this quite well.
Speaker #1: We had exceptional support from all of the employees, and the mills ran through this. The problem was we couldn't ship any tons out during the period of time, so just in the last 24 hours we started moving trucks and rail into Counts and River Mill.
Mark Kowlzan: So just in the last 24 hours, we started moving trucks and rail into Counce and Riverville. But nevertheless, we've had a huge number of the box plant system down for the few days. Tom, do you wanna add a little color on that? Because it's pretty significant.
So just in the last 24 hours, we started moving trucks and rail into Counce and Riverville. But nevertheless, we've had a huge number of the box plant system down for the few days. Tom, do you wanna add a little color on that? Because it's pretty significant.
Speaker #1: But nevertheless, we've had a huge number of the box plant system down for a few days. Tom, do you want to add a little color on that because it's...
Speaker #3: Yeah, I think the important thing is, George, to understand it's going to be very hard for us to get our arms around this until we find out, you know, what the impact is on that book of orders that we're not shipped in the short term.
Thomas Hassfurther: Yeah. I think, I think the important thing is, George, to understand, it's gonna be very hard for us to get our arms around this until we find out, you know, what the impact is on that, on that book of orders that, that were not shipped in the short term, and whether they, whether they'll pick back up, with our customers going forward. Obviously, our customers were down as well. So, you know, it's, you know, we've been through these before, and sometimes, you know, and if it's, if it's too long of a process, you know, there are orders lost. Other times, we get right back up and, and we can catch up.
Thomas Hassfurther: Yeah. I think, I think the important thing is, George, to understand, it's gonna be very hard for us to get our arms around this until we find out, you know, what the impact is on that, on that book of orders that, that were not shipped in the short term, and whether they, whether they'll pick back up, with our customers going forward. Obviously, our customers were down as well. So, you know, it's, you know, we've been through these before, and sometimes, you know, and if it's, if it's too long of a process, you know, there are orders lost. Other times, we get right back up and, and we can catch up.
Speaker #3: And whether they'll pick back up with our customers going forward. Obviously, our customers were down as well. So, you know, we've been through these before and sometimes, you know, if it's too long of a process, there are orders lost.
Speaker #3: Other times we get right back up and we can catch up. So we'll just have to see as this month goes on, and really kind of probably as this winter goes on, because they're calling for another big storm, you know, coming in the Mid-Atlantic and Southern region this weekend.
Thomas Hassfurther: So we'll just have to see as this month goes on, and really kind of probably as this winter goes on, because they're calling for another big storm, you know, coming on the in the Mid-Atlantic and Southern region this weekend. So, you know, we'll, we'll just have to see what happens. But, but I think overall, I mean, you know, we've, I, I think we weathered it pretty decent, although we had a lot of box plants down. And the transportation is another big issue that, you know, exists, whether it's rail or truck, if we can get the product out once we get the plants and mills up and going. Hey, George, back to your first question. It's Kent.
So we'll just have to see as this month goes on, and really kind of probably as this winter goes on, because they're calling for another big storm, you know, coming on the in the Mid-Atlantic and Southern region this weekend. So, you know, we'll, we'll just have to see what happens. But, but I think overall, I mean, you know, we've, I, I think we weathered it pretty decent, although we had a lot of box plants down. And the transportation is another big issue that, you know, exists, whether it's rail or truck, if we can get the product out once we get the plants and mills up and going.
Speaker #3: So, you know, we'll just have to see what happens. But I think overall, I mean, you know, I think we weathered it pretty decently, although we had a lot of box plants down.
Speaker #3: And the transportation is another big issue that, you know, exists whether it's rail or truck. If we can get the product out once we get the plants and mills up and
Speaker #3: Going. Hey, George, back to your first
Kent Pflederer: Hey, George, back to your first question. It's Kent.
Speaker #1: question. It's Kent. X-Frape, and with a little bit of a little benefit in but not all of it, we're about 15 million dollars total in the cost line in the mills.
George Leon Staphos: Kent.
George Staphos: Kent.
Thomas Hassfurther: Excess freight and with a little bit of Wallula benefit in, but not all of it, we're about $15 million total on the cost line in the mills-
Kent Pflederer: Excess freight and with a little bit of Wallula benefit in, but not all of it, we're about $15 million total on the cost line in the mills, so running that through, that's maybe $10 a ton.
Speaker #1: So running that through, that's maybe 10 bucks a ton.
Kent Pflederer: ... So running that through, that's maybe $10 a ton.
Speaker #3: Okay. I appreciate that, Kent. Last one I'll turn it over just to be mindful. You know, what gives you comfort that at Massilon you're through the reliability issues and, you know, for that matter, what gives you comfort and what caused the inventory mismatch in the acquired facilities?
George Leon Staphos: Okay, appreciate that, Ken. Last one, and I'll turn it over. Just be mindful. You know, what gives you comfort that at Massillon, you're through the reliability issues, and, you know, for that matter, what gives you comfort, and what caused the inventory mismatch in the acquired facilities? Again, presuming it's gonna be worked down, but hopefully by Q1. But what caused that? Thank you, guys. Good luck in the quarter.
George Staphos: Okay, appreciate that, Ken. Last one, and I'll turn it over. Just be mindful. You know, what gives you comfort that at Massillon, you're through the reliability issues, and, you know, for that matter, what gives you comfort, and what caused the inventory mismatch in the acquired facilities? Again, presuming it's gonna be worked down, but hopefully by Q1. But what caused that? Thank you, guys. Good luck in the quarter.
Speaker #3: Again, presuming it's going to be worked down, but hopefully by one queue. But what caused that? Thank you, guys.
Speaker #3: Good luck in the quarter. Yeah,
Speaker #1: I'll talk about the operational matters and then let Tom talk about the inventory. You know, during the month of—if you went back to the acquisition date in, probably, September 200, we spent six straight weeks—PCA personnel assisting Massilon, along with contractors—essentially rebuilding the Massilon Mill, from bearings, bushings, pumps, motors; you know, we put our hands on everything.
Mark Kowlzan: Yeah, I'll talk about the operational matters, and then I'll let Tom talk about the inventory. You know, during the month of, if you went back to the acquisition date in September, we spent six straight weeks with probably 200 PCA personnel assisting Massillon, along with contractors, essentially rebuilding Massillon Mill. From bearings, bushings, pumps, motors, you know, we put our hands on everything. Gas turbine rebuild, again, all of the mechanical infrastructure. Then during the period of time during December that the mill was down, we continued to address some of the even finer detail items, some operational improvements, even down to the lubrication technology. Again, more bearing monitoring.
Mark Kowlzan: Yeah, I'll talk about the operational matters, and then I'll let Tom talk about the inventory. You know, during the month of, if you went back to the acquisition date in September, we spent six straight weeks with probably 200 PCA personnel assisting Massillon, along with contractors, essentially rebuilding Massillon Mill. From bearings, bushings, pumps, motors, you know, we put our hands on everything. Gas turbine rebuild, again, all of the mechanical infrastructure. Then during the period of time during December that the mill was down, we continued to address some of the even finer detail items, some operational improvements, even down to the lubrication technology. Again, more bearing monitoring.
Speaker #1: Gas turbine rebuild, again, all of the mechanical infrastructure. And then during the period of time during December that the mill was down, we continued to address some of the even finer detail items, some operational improvements, even down to lubrication technology, again, more bearing monitoring, so I'd like to say that over a three and a half month period of time, we've essentially rebuilt the Massilon Mill.
Mark Kowlzan: So, I'd like to say that over a 3.5-month period of time, we've essentially rebuilt the Massillon Mill, so it's become the little mill that could. It's, we've improved operational efficiency at both Massillon and Riverville from the, you know, probably a 15% improvement overall, in operational efficiency, the way we measure efficiency. So both mills are very close now to running to the PCA standard efficiencies. Tom, do you wanna talk about the inventory again?
So, I'd like to say that over a 3.5-month period of time, we've essentially rebuilt the Massillon Mill, so it's become the little mill that could. It's, we've improved operational efficiency at both Massillon and Riverville from the, you know, probably a 15% improvement overall, in operational efficiency, the way we measure efficiency. So both mills are very close now to running to the PCA standard efficiencies. Tom, do you wanna talk about the inventory again?
Speaker #1: So it's become the little mill that could. It's we've improved operational efficiency at both Massilon and River Mill from the, you know, probably 15% improvement overall in operational efficiency, the way we measure efficiency.
Speaker #1: So both mills are very close now to running to the PCA standard efficiencies. Tom, do you want to talk about the
Speaker #1: inventory? So George, I'll at
Kent Pflederer: So George, I'll at least start on the Massillon piece to quantify it. We were maybe 10,000 tons above where we'd forecasted, finishing up the year. Some of that were taking purchase commitment tons. Some of that was we were a little bit lower than forecasted shipment volume. So Tom, I'll let you expand.
Kent Pflederer: So George, I'll at least start on the Massillon piece to quantify it. We were maybe 10,000 tons above where we'd forecasted, finishing up the year. Some of that were taking purchase commitment tons. Some of that was we were a little bit lower than forecasted shipment volume. So Tom, I'll let you expand.
Speaker #2: least start on the Massilon piece to quantify it. We were maybe 10,000 tons above where we'd forecasted finishing up the year. Some of that were taking purchase commitment tons.
Speaker #2: Some of that was we were a little bit lower than forecasted shipment volume. So Tom, I'll let you expand.
Speaker #1: Okay. So I think, George, think of it this way. You know, we had we knew we had a lot of work that needed to be done.
Thomas Hassfurther: Okay, so I think, George, think of it this way: you know, we had, we knew we had a lot of work that needed to be done. We knew we had to get our reliability up in a number of things. And, you know, fortunately, we had the financial flexibility to go do that right away to prepare us for 2026 and the demand we saw coming forward in 2026. Now, that said, you know, everybody did an outstanding job, and you know, we've got, we're in good shape starting in 2026.
Thomas Hassfurther: Okay, so I think, George, think of it this way: you know, we had, we knew we had a lot of work that needed to be done. We knew we had to get our reliability up in a number of things. And, you know, fortunately, we had the financial flexibility to go do that right away to prepare us for 2026 and the demand we saw coming forward in 2026. Now, that said, you know, everybody did an outstanding job, and you know, we've got, we're in good shape starting in 2026.
Speaker #1: We knew we had to get our reliability up in a number of things. And you know, fortunately, we had the financial flexibility to go do that right away to prepare us for 2026 and the demand we saw coming forward in 2026.
Speaker #1: Now that said, you know, that you know, everybody did an outstanding job. And you know, we've got we're in good shape. Starting in 2026.
Speaker #1: But there is another big piece of this that was part of that inventory miss, and that is that we had—the grief had—a lot of containerboard purchase and trade commitments that were in place, that we just chose to absorb basically in the fourth quarter.
Thomas Hassfurther: But there is another big piece of this that was part of that inventory miss, and that is that we had the Greif. Greif had a lot of containerboard purchase and trade commitments that were in place that we just chose to absorb, basically, in the fourth quarter. And you know, we don't have a lot of visibility from a systems point of view into a lot of their day-to-day activities like we do at PCA. So those were the main drivers for the inventory miss. But I think the most important thing is we got all that work done upfront and put ourselves in good shape for 2026.
But there is another big piece of this that was part of that inventory miss, and that is that we had the Greif. Greif had a lot of containerboard purchase and trade commitments that were in place that we just chose to absorb, basically, in the fourth quarter. And you know, we don't have a lot of visibility from a systems point of view into a lot of their day-to-day activities like we do at PCA. So those were the main drivers for the inventory miss. But I think the most important thing is we got all that work done upfront and put ourselves in good shape for 2026.
Speaker #1: And you know, we don't have a lot of visibility from a systems point of view into a lot of their day-to-day activities like we do at PCA.
Speaker #1: So, those were the main drivers for the inventory miss. But I think the most important thing is we got all that work done up front.
Speaker #1: And put ourselves in good shape for 2026.
Speaker #3: Thank you.
George Leon Staphos: Thank you.
George Staphos: Thank you.
Speaker #1: Next question,
Mark Kowlzan: Next question, please.
Mark Kowlzan: Next question, please.
Speaker #1: please. And our next question comes from
Operator: Our next question comes from Michael Roxland, from Truist Securities. Please go ahead with your question.
Operator: Our next question comes from Michael Roxland, from Truist Securities. Please go ahead with your question.
Speaker #2: Securities. Please go ahead with your question, Michael Roxlin from Truist.
Speaker #4: Yeah, thank you, Mark, Tom, and Kent, for taking my questions. I just wanted to—Tom, I wanted to follow up on that last point in terms of the purchase and trade commitments that Greif had in place, just to provide some more color.
Michael Andrew Roxland: Yeah. Thank you, Mark, Tom, and Ken, for taking my questions. Just wanted to—Tom, I wanted to follow up on that last point in terms of the purchase and trade commitments that Greif had in place. Just want to provide some more color around those commitments. Is it something you're looking to keep? Is it something that you're looking to get rid of once those contracts expire? Just any color you can provide around those commitments and what you're looking to do with them.
Michael Roxland: Yeah. Thank you, Mark, Tom, and Ken, for taking my questions. Just wanted to—Tom, I wanted to follow up on that last point in terms of the purchase and trade commitments that Greif had in place. Just want to provide some more color around those commitments. Is it something you're looking to keep? Is it something that you're looking to get rid of once those contracts expire? Just any color you can provide around those commitments and what you're looking to do with them.
Speaker #4: Around those commitments, is it something that you're looking to keep? Is it something that you're looking to get rid of once those contracts expire?
Speaker #4: Just any color you can provide around those commitments and what you're looking to do with them.
Speaker #2: Okay, Mike, I'm going to ignore the color part and just tell commitments and you that those purchases we no longer are keeping or are pursuing or anything like that.
Thomas Hassfurther: Okay, Mike, I'm gonna ignore the color part and just tell you that those commitments and purchases, we no longer are keeping or, you know, pursuing or anything like that. Those were agreements that Greif had. We would not typically have any of those in place, and we're discontinuing those. We met the commitments, and, you know, we're moving forward from there.
Thomas Hassfurther: Okay, Mike, I'm gonna ignore the color part and just tell you that those commitments and purchases, we no longer are keeping or, you know, pursuing or anything like that. Those were agreements that Greif had. We would not typically have any of those in place, and we're discontinuing those. We met the commitments, and, you know, we're moving forward from there.
Speaker #2: Those were agreements that grife had. We would not typically have any of those in place, and we're discontinuing those. We met the commitments, and you know, we're moving forward from
Speaker #1: Perfect. Got
Michael Andrew Roxland: Okay, got it. And it sounds like demand hasn't selected a need to run full, you know, but you have 2 less shipping days in one Q. So just, you know, this is a theoretical question: I mean, if you had those 2 extra shipping days in one Q, would things be looser and volumes be softer, or has demand firmed up enough such that you would still be running full, even with those 2 extra shipping days?
Michael Roxland: Okay, got it. And it sounds like demand hasn't selected a need to run full, you know, but you have 2 less shipping days in one Q. So just, you know, this is a theoretical question: I mean, if you had those 2 extra shipping days in one Q, would things be looser and volumes be softer, or has demand firmed up enough such that you would still be running full, even with those 2 extra shipping days?
Speaker #1: it. there.
Speaker #4: And it sounds like demand has
Speaker #4: inflected a need to run full. You know, but you have too much shipping days in one-queue. So this is a theoretical question. I mean, if you had those two extra shipping days in one-queue, would things be looser and volumes be softer, or has demand firmed up enough such that you would still be running full even with those two extra shipping days?
Mark Kowlzan: If we had the two extra days, we'd still be running full. I mean, we're the way we've looked at the entire year for the full 2026, we expect to run the entire mill system full out. And so, which is a high-class problem to have. So Tom, you want to add anything?
Speaker #2: If we had the two extra days, we'd still be running full. I mean, the way we've looked at the entire year, for the full 2026, we expect to run the entire mill system full out.
Mark Kowlzan: If we had the two extra days, we'd still be running full. I mean, we're the way we've looked at the entire year for the full 2026, we expect to run the entire mill system full out. And so, which is a high-class problem to have. So Tom, you want to add anything?
Speaker #2: And so, which is a high-class problem to have. So, Tom, do you want to add anything?
Speaker #1: No, you know, this is just a matter of a 30-day period that we're looking at, as opposed to the long term. So we would absolutely be running full out if we had the two extra days.
Thomas Hassfurther: No, we'd. You know, it's, this is just a matter of a 30-day period that we're looking at as opposed to the long term. So we would absolutely be running full out if we had the two extra days.
Thomas Hassfurther: No, we'd. You know, it's, this is just a matter of a 30-day period that we're looking at as opposed to the long term. So we would absolutely be running full out if we had the two extra days.
Speaker #4: Got it. And then, just from a demand perspective, you know, you guys have called out in recent quarters the housing environment. You've called out protein.
Michael Andrew Roxland: Got it. And then just from a demand perspective, you know, you guys have called out, on recent quarters, the housing environment; you've called out, called out protein. Any inflection in those particular end markets that are contributing to this better demand?
Michael Roxland: Got it. And then just from a demand perspective, you know, you guys have called out, on recent quarters, the housing environment; you've called out, called out protein. Any inflection in those particular end markets that are contributing to this better demand?
Speaker #4: Any inflection in those particular markets that are contributing to this better
Speaker #4: Demand? Well, I think, as I
Thomas Hassfurther: Well, I think, as I mentioned in the comments, that the underlying demand is improving, and it's improving in all the segments, which is what's really positive for us. You know, as I've talked about over the last, certainly last year, and maybe even going into the previous year, auto, building products, durables, those segments were down and continued to be down all the way through the fourth quarter. But you know, and they worked their inventories down to the bare bones also, by the way. And we're seeing some pickup in that area, and that's a real positive for us because those are still large segments for us.
Thomas Hassfurther: Well, I think, as I mentioned in the comments, that the underlying demand is improving, and it's improving in all the segments, which is what's really positive for us. You know, as I've talked about over the last, certainly last year, and maybe even going into the previous year, auto, building products, durables, those segments were down and continued to be down all the way through the fourth quarter. But you know, and they worked their inventories down to the bare bones also, by the way. And we're seeing some pickup in that area, and that's a real positive for us because those are still large segments for us.
Speaker #2: mentioned in the comments, that the underlying demand is improving and it's improving in all the segments, which is what's really positive for us. You know, as I've talked about over the last certainly last year and maybe even going into the previous year, auto, building products, durables, those segments were down and continue to be down all the way through the fourth quarter.
Speaker #2: But you know, and they worked their inventories down to the bare bones also, by the way. And we're seeing some pickup in that area.
Speaker #2: And that's a real positive for us because those are still large segments for us. And you know, obviously, we're doing well in the other segments and the other segments continue to do well.
Thomas Hassfurther: And, you know, obviously, we're obviously, we're doing well in the other segments, and the other segments continued to do well. But I think, you know, consumer sentiment is getting better. You know, the, the GDP is up, 4%, the previous quarter, a little over 4%, pre- forecast to be up over 5% this quarter. If you just think about, you know, at worst, box demand could trend at half of the GDP, and that's a big number, you know, in terms of demand. So, you know, everything, everything underlying demand has been is very positive right now, Mike.
And, you know, obviously, we're obviously, we're doing well in the other segments, and the other segments continued to do well. But I think, you know, consumer sentiment is getting better. You know, the, the GDP is up, 4%, the previous quarter, a little over 4%, pre- forecast to be up over 5% this quarter. If you just think about, you know, at worst, box demand could trend at half of the GDP, and that's a big number, you know, in terms of demand. So, you know, everything, everything underlying demand has been is very positive right now, Mike.
Speaker #2: But I think, you know, consumer sentiment's getting better. You know, the GDP's up—4% the previous quarter, a little over 4%. Forecast to be up over 5% this quarter.
Speaker #2: If you just think about, demand could trend at half of you know, at worst, box the GDP and that's a big number. You know, in terms of demand.
Speaker #2: So, you know, everything underlying demand has been very positive right now.
Speaker #2: Mike. Got it.
Gabrial Shane Hajde: Got it. Thank you, guys. Just one quick follow-up, just on a housekeeping question. Are you reflecting the $70 per ton in your Q1 guide? So is that part- is that, you know, you announced that $70 per ton for 1 March, is that included in the $2.20 you're guiding for Q1?
Michael Roxland: Got it. Thank you, guys. Just one quick follow-up, just on a housekeeping question. Are you reflecting the $70 per ton in your Q1 guide? So is that part- is that, you know, you announced that $70 per ton for 1 March, is that included in the $2.20 you're guiding for Q1?
Speaker #4: Thank you, guys. There's one quick follow-up just on a housekeeping question. Are you reflecting the $70 per ton in your one-queue guide? So is that part is that, you know, you announced that $70 per ton for March 1st.
Speaker #4: Is that included in the $2.20 you're guiding for one-queue?
Speaker #2: The answer is no. We have a little bit into March, but not the full.
Thomas Hassfurther: The answer is no. We have a little bit into March, but not the full benefit.
Kent Pflederer: The answer is no. We have a little bit into March, but not the full benefit.
Speaker #2: benefit.
Speaker #4: So you are baking in, though, the—
Gabrial Shane Hajde: So you are baking in, though, the... But so you, you are, you are counting that in your Q1 guide to a little, to some extent?
Michael Roxland: So you are baking in, though, the... But so you, you are, you are counting that in your Q1 guide to a little, to some extent?
Speaker #4: So, you are counting that in your one-queue guide a little, to some extent.
Speaker #1: Just a small, just a small, just a small amount is what we're putting in the forecast. You know, as you know, these price increases, I mean, they take place over, you know, for us, you know, they take place over about a 90-day period.
Thomas Hassfurther: Just a small amount is what we're putting in the forecast. You know, as you know, these price increases, I mean, you know, they take place over, you know, for us, they take place over about a 90-day period. And then we have some contracts that extend to mid-year and, you know, that's that sort of thing. But for the most part, you know, I mean, we're baking in. Of course, it's effective starting March 1, but, you know, we can't bake in the full amount, obviously.
Thomas Hassfurther: Just a small amount is what we're putting in the forecast. You know, as you know, these price increases, I mean, you know, they take place over, you know, for us, they take place over about a 90-day period. And then we have some contracts that extend to mid-year and, you know, that's that sort of thing. But for the most part, you know, I mean, we're baking in. Of course, it's effective starting March 1, but, you know, we can't bake in the full amount, obviously.
Speaker #1: And then we have some contracts that extend to mid-year and you know, that sort of thing. But for the most part, you know, I mean, we're baking in.
Speaker #1: Of course, it's effective starting March 1, but, you know, we can't bake in the full amount,
Speaker #1: obviously. Got it.
Gabrial Shane Hajde: Got it. Very helpful. Thanks very much, and good luck in Q2.
Michael Roxland: Got it. Very helpful. Thanks very much, and good luck in Q2.
Speaker #4: Very helpful. two-queue.
Speaker #4: And good luck in
Thomas Hassfurther: Thanks, Mike. Appreciate it. Next question, please.
Mark Kowlzan: Thanks, Mike. Appreciate it. Next question, please.
Speaker #1: Thanks,
Speaker #1: Mike. Appreciate it. Next question, Thanks very much.
Speaker #1: please. Our next question comes
Operator: Our next question comes from Mark Adam Weintraub, Weintraub from Seaport Research Partners. Please go ahead with your question.
Operator: Our next question comes from Mark Adam Weintraub, Weintraub from Seaport Research Partners. Please go ahead with your question.
Speaker #2: from Mark Adam, Weintrope from Seaport Research Partners. Please go ahead with your question.
Speaker #5: Great. Thank you. Just a few two quick clarifications. One, just to be clear, the $70 you get that in container board in March, but you're talking about because it takes a while to flow through into boxes.
Mark Adam Weintraub: Great, thank you. Just a few, two quick clarifications. One, just to be clear, the $70, you get that in containerboard in March, but you're talking about because it takes a while to flow through into boxes, is why it would have a fairly de minimis impact in Q1. Is that correct?
Mark Weintraub: Great, thank you. Just a few, two quick clarifications. One, just to be clear, the $70, you get that in containerboard in March, but you're talking about because it takes a while to flow through into boxes, is why it would have a fairly de minimis impact in Q1. Is that correct?
Speaker #5: That's why it would have a fairly de minimis impact in Q4.
Speaker #5: one-queue. Correct. Is that correct?
Thomas Hassfurther: Correct. Correct, Mark. Yes. Mm-hmm.
Thomas Hassfurther: Correct. Correct, Mark. Yes. Mm-hmm.
Speaker #2: Correct, Mark. Yes.
Speaker #5: And just a second clarification, just to make sure I wasn't missing something. If there were two more shipping days, then you'd have more demand on your mill system, not less, in the short term.
Mark Adam Weintraub: And just second clarification, just to make sure I wasn't missing something. If there were two more shipping days, then you'd have more demand on your mill system, not less, in the short term?
Mark Weintraub: And just second clarification, just to make sure I wasn't missing something. If there were two more shipping days, then you'd have more demand on your mill system, not less, in the short term?
Speaker #2: Correct.
Thomas Hassfurther: Correct.
Thomas Hassfurther: Correct.
Mark Adam Weintraub: Yes. Oh, okay. And then just two, just going back to costs, last year, you had talked about $0.50 to $0.60 impact going from Q4 to Q1, and that you expected to get about half of it, or even perhaps a bit more than that, back in Q2, because, you know, some of it's seasonal, et cetera. Could you share those types of metrics this time around?
Mark Weintraub: Yes. Oh, okay. And then just two, just going back to costs, last year, you had talked about $0.50 to $0.60 impact going from Q4 to Q1, and that you expected to get about half of it, or even perhaps a bit more than that, back in Q2, because, you know, some of it's seasonal, et cetera. Could you share those types of metrics this time around?
Speaker #5: Okay. And yes, then just two—just going back to costs. Last year, you had talked about a $0.50 to $0.60 impact going from four-queue to one-queue, and that you expected to get about half of it, or even perhaps a bit more than that, back in the second quarter because, you know, some of it is seasonal, etc.
Speaker #5: Could you share those types of metrics this time?
Speaker #5: around? Yes, we
Thomas Hassfurther: Yes, we can, Mark. It's about $0.45 to $0.50, Q4 to Q1. We will get, excluding Wallula, a little under half of that back, but then Wallula, the cost improvements there start kicking in, more so in Q2.
Kent Pflederer: Yes, we can, Mark. It's about $0.45 to $0.50, Q4 to Q1. We will get, excluding Wallula, a little under half of that back, but then Wallula, the cost improvements there start kicking in, more so in Q2.
Speaker #2: Can, Mark. It's about $0.45 to $0.50 four-queue to one-queue we will get, excluding Walula—a little under half of that back. But then Walula, the cost improvements there start kicking in more so in the second quarter.
Speaker #5: Okay. Super. And then the can we also contrast how the container board, box markets feel now relative to how they felt this time last year?
Mark Adam Weintraub: Okay. Super. And then, can we also contrast how the containerboard box markets feel now relative to how they felt this time last year? I mean, obviously, you, you went with price increases January first last year. You got, at least in terms of what Pulp and Paper Week reflected, partial increases. How, how does it feel this time around versus the last two years?
Mark Weintraub: Okay. Super. And then, can we also contrast how the containerboard box markets feel now relative to how they felt this time last year? I mean, obviously, you, you went with price increases January first last year. You got, at least in terms of what Pulp and Paper Week reflected, partial increases. How, how does it feel this time around versus the last two years?
Speaker #5: I mean, obviously, you went with price increases January 1st last year. You got, at least in terms of what Pulp and Paper Week reflected, partial increases.
Speaker #5: How does it feel this time around versus the last two?
Speaker #5: Years? Now, I'm only going to—I can only speak...
Thomas Hassfurther: Now, I can only speak for PCA, so, you know, let's just... I want to qualify that. I mean, it feels improved. In fact, much improved, I think, because there were still a lot of question marks in place a year ago. A new administration was gonna take, you know, take hold. A lot of things were up in the air. We, you know, we dealt with. We were already dealing with potential tariff stuff, and all these other things that were question marks hanging in the air. Those are all pretty well cleared up at this point in time, and I think the most encouraging thing is what I just mentioned earlier, relative to GDP and consumer sentiment.
Thomas Hassfurther: Now, I can only speak for PCA, so, you know, let's just... I want to qualify that. I mean, it feels improved. In fact, much improved, I think, because there were still a lot of question marks in place a year ago. A new administration was gonna take, you know, take hold. A lot of things were up in the air. We, you know, we dealt with. We were already dealing with potential tariff stuff, and all these other things that were question marks hanging in the air. Those are all pretty well cleared up at this point in time, and I think the most encouraging thing is what I just mentioned earlier, relative to GDP and consumer sentiment.
Speaker #2: For PCA, so, you know, I just want to qualify that. How does it feel for us? I mean, it feels improved. In fact, much improved, I think, because there were still a lot of question marks in place a year ago—a new administration was going to take place, you know, take hold.
Speaker #2: A lot of things were up in the air. We, you know, we dealt with—we were already dealing with potential tariff stuff and all these other things that were question marks.
Speaker #2: Hanging in the air. Those are all pretty well cleared up at this point in time. And I think the most encouraging thing is what I just mentioned earlier, relative to GDP and consumer sentiment.
Speaker #2: You know, GDP being up over 4% last quarter, projected to be up over 5% this quarter—those are big numbers and make a big difference in terms of corrugated box demand.
Thomas Hassfurther: You know, GDP being up over 4% last quarter, projected to be up over 5% this quarter, those are big numbers and make a big difference in terms of corrugated box demand. And also, you know, I think another great metric is that, you know, for the first time in over 4 years, you know, you've got wages that are now ahead of inflation, and that will also improve the consumer sentiment going forward. They may not feel it immediately, but I think throughout the year, I think that's an important metric for our business.
You know, GDP being up over 4% last quarter, projected to be up over 5% this quarter, those are big numbers and make a big difference in terms of corrugated box demand. And also, you know, I think another great metric is that, you know, for the first time in over 4 years, you know, you've got wages that are now ahead of inflation, and that will also improve the consumer sentiment going forward. They may not feel it immediately, but I think throughout the year, I think that's an important metric for our business.
Speaker #2: And also, you know, I think another great metric is, you know, for the first time in over four years, you’ve got wages that are now ahead of inflation.
Speaker #2: And that will also improve the consumer sentiment going forward. They may not feel it immediately, but I think throughout the year, I think that's an important metric for our business.
Speaker #5: Great. Appreciate it. Thank you.
Mark Adam Weintraub: Great. Appreciate it. Thank you.
Mark Weintraub: Great. Appreciate it. Thank you.
Speaker #1: Thank you. Next question, please.
Thomas Hassfurther: Thank you. Next question, please.
Mark Kowlzan: Thank you. Next question, please.
Speaker #2: Our next question comes from Gabe Hady from Wells Fargo Securities. Please go ahead with your question.
Operator: Our next question comes from Gabe Hajde, from Wells Fargo Securities. Please go ahead with your question.
Operator: Our next question comes from Gabe Hajde, from Wells Fargo Securities. Please go ahead with your question.
Gabrial Shane Hajde: Mark, Tom, Kent, good morning. Thanks for taking the question. Not to be combative here, but I'm curious, like, I think GDP is projected to be up 3-4% in 2025, yet box demand is pretty muted, sluggish, disappointing. There seems to be a clear inflection in your tone. I'm curious. If you can, is this something specific to what PCA is doing, maybe the new Glendale box plant and internal initiatives? You know, we heard from someone else this morning, more hunters on the field versus gatherers. It just, there's obviously been a clear change in tone on the demand side. And then we've been dealing with this seemingly jockeying around of orders and inventories at quarter end, and then the first month of the new quarter.
Speaker #4: Mark, Tom, Kent, good morning. Thanks for taking the question. Not to be combative here, but I'm curious, like, I think GDP is projected to be up 3% to 4% in 2025, yet box demand is pretty muted, sluggish, disappointing. There seems to be a clear inflection in your tone.
Gabe Hajde: Mark, Tom, Kent, good morning. Thanks for taking the question. Not to be combative here, but I'm curious, like, I think GDP is projected to be up 3-4% in 2025, yet box demand is pretty muted, sluggish, disappointing. There seems to be a clear inflection in your tone. I'm curious. If you can, is this something specific to what PCA is doing, maybe the new Glendale box plant and internal initiatives? You know, we heard from someone else this morning, more hunters on the field versus gatherers. It just, there's obviously been a clear change in tone on the demand side. And then we've been dealing with this seemingly jockeying around of orders and inventories at quarter end, and then the first month of the new quarter.
Speaker #4: I'm curious, if you can, is this something specific to what PCA is doing, maybe the new Glendale box plant and internal initiatives? You know, we heard from someone else this morning, more hunters on the field versus gatherers.
Speaker #4: It just there's obviously been a clear change in tone on the demand side. And then we've been dealing with this seemingly jockeying around of orders and inventories at quarter end and then the first month of the new quarter.
Gabrial Shane Hajde: Any visibility, any work you guys have done to try to discern if that's going on here, or again, if this is more durable in terms of order patterns? Thank you.
Speaker #4: Any visibility, any work you guys have done to try to discern if that's going on here or, again, if this is more durable in terms of order patterns?
Any visibility, any work you guys have done to try to discern if that's going on here, or again, if this is more durable in terms of order patterns? Thank you.
Speaker #4: Thank you.
Speaker #1: Well, Gabe, I wish I could, empathically, you know, give you a great answer here. But all I can do is anecdotally talk about, you know, the fact that we do have these discussions with our customers.
Thomas Hassfurther: Well, Gabe, I wish I could emphatically, you know, give you great answers here, but all I can do is anecdotally talk about, you know, the fact that we do have these discussions with our customers. We are trying to find out what they're thinking and what they're doing, because that's important to our ability to adapt our business accordingly. But I can tell you there is a much more positive vibe across our entire customer base right now. The starts and stops we experienced last year was quite unusual, quite frankly, you know, because I think everybody was trying to figure out, you know, what consumer demand really was and what...
Thomas Hassfurther: Well, Gabe, I wish I could emphatically, you know, give you great answers here, but all I can do is anecdotally talk about, you know, the fact that we do have these discussions with our customers. We are trying to find out what they're thinking and what they're doing, because that's important to our ability to adapt our business accordingly. But I can tell you there is a much more positive vibe across our entire customer base right now. The starts and stops we experienced last year was quite unusual, quite frankly, you know, because I think everybody was trying to figure out, you know, what consumer demand really was and what...
Speaker #1: We are trying to find out what they're thinking and what they're doing, because that's important to our ability to adapt our business accordingly. But I can tell you there is a much more positive vibe across our entire customer base right now.
Speaker #1: The starts and stops we experienced last year was quite unusual, quite frankly, you know, because I think everybody was trying to figure out, you know, what consumer demand really was, and what CapEx spending from companies and all these other sorts of things.
Thomas Hassfurther: And CapEx spending from, from companies and all these other sorts of things, what was really going to occur because start, stop, start, stop, you know, I mean, we had... I have customers that talked about having product that they were importing, that they then add value to and then sell in the market that were stuck in, you know, stuck in ports in different places, you know, waiting for tariffs, to find out what the tariffs were gonna be, all these other sorts of things. So it was an unusual year, in my opinion, and a lot of that, a lot of that's now, you know, cleared out, and, and I think that's helped the visibility going forward, and I think it's also helped the positivity going forward in terms of, predictability.
And CapEx spending from, from companies and all these other sorts of things, what was really going to occur because start, stop, start, stop, you know, I mean, we had... I have customers that talked about having product that they were importing, that they then add value to and then sell in the market that were stuck in, you know, stuck in ports in different places, you know, waiting for tariffs, to find out what the tariffs were gonna be, all these other sorts of things. So it was an unusual year, in my opinion, and a lot of that, a lot of that's now, you know, cleared out, and, and I think that's helped the visibility going forward, and I think it's also helped the positivity going forward in terms of, predictability. So that's about the best I can tell you.
Speaker #1: What was because starts, stops, starts, stop, you know? I mean, we had I have customers that talked about having product that they were importing that they then add value to and then sell in the market that were stuck in, you know, stuck in ports in different places, you know, waiting for tariffs.
Speaker #1: To find out what the tariffs were going to be, all these other sorts of things. So it was an unusual year in my opinion.
Speaker #1: And a lot of that a lot of that's now, you know, cleared out. And I think that's helped the visibility going forward. And I think it's also helped the positivity going forward in terms of predictability.
Speaker #1: So that's about the best I can tell.
Thomas Hassfurther: So that's about the best I can tell you.
Speaker #1: you. All
Speaker #4: right. Thank you, Tom. On the growth acquisition, some of the feedback that we've gotten is that it feels maybe a little bit of swell out of the gate.
Gabrial Shane Hajde: All right. Thank you, Tom. On the Bright acquisition, some of the feedback that we've gotten is, is that it feels, maybe a little bit slow out of the gate. And, and I know you guys had a plan going in, but maybe, Mark, can you just talk about, you know, let's say, an impromptu mill rebuild in three and a half weeks? Was that part of the plan? And as you project forward and think about, the acquired assets, you talked about running full for the rest of this year, but for planned, maintenance outage, do you expect that to be kind of reaching that, you know, I guess, EPS accretion level in the Q2, Q1, second half of this year? Just any thoughts on that?
Gabe Hajde: All right. Thank you, Tom. On the Bright acquisition, some of the feedback that we've gotten is, is that it feels, maybe a little bit slow out of the gate. And, and I know you guys had a plan going in, but maybe, Mark, can you just talk about, you know, let's say, an impromptu mill rebuild in three and a half weeks? Was that part of the plan? And as you project forward and think about, the acquired assets, you talked about running full for the rest of this year, but for planned, maintenance outage, do you expect that to be kind of reaching that, you know, I guess, EPS accretion level in the Q2, Q1, second half of this year? Just any thoughts on that?
Speaker #4: And I know you guys had a plan going in, but maybe, Mark, can you just talk about, you know, let's say an impromptu mill rebuild in three and a half weeks?
Speaker #4: Was that part of the plan? And as you project forward and think about the acquired assets, you talked about running full for the rest of this year, but for planned maintenance outage.
Speaker #4: Do you expect that to be kind of reaching that, you know, I guess, EPS accretion level in the second quarter? First quarter? Second half of this year?
Speaker #4: Just any thoughts on
Speaker #4: that? As far
Speaker #1: As the two mills, the Macellan Mill and the Riverville Mill, we learned a lesson from Boise. And we also have a different organization in place now than we did 13 years ago.
Mark Kowlzan: As far as the two mills, the Massillon mill and the Riverville mill, we learned a lesson from Boise, and we also have a different organization in place now than we did 13 years ago. But we took advantage of the fact that we have the technology engineering group in-house, and decided that after the acquisition, you know, we would execute an immediate corrective action at the mills and go in in force and, you know, do what PCA does well, and that's provide operational expertise. So we took the couple of months in the fall, you know, right through December at Massillon, and essentially addressed all of the issues that normally might take a few years to address.
Mark Kowlzan: As far as the two mills, the Massillon mill and the Riverville mill, we learned a lesson from Boise, and we also have a different organization in place now than we did 13 years ago. But we took advantage of the fact that we have the technology engineering group in-house, and decided that after the acquisition, you know, we would execute an immediate corrective action at the mills and go in in force and, you know, do what PCA does well, and that's provide operational expertise. So we took the couple of months in the fall, you know, right through December at Massillon, and essentially addressed all of the issues that normally might take a few years to address.
Speaker #1: But we took advantage of the fact that we have the technology engineering group in-house and decided that after the, you know, acquisition, we would execute an immediate corrective action at the mills.
Speaker #1: And go in and force and, you know, do what PCA does operational expertise. And well. And that's provide so we took the couple of months in the fall, you know, right through December at Macellan, and essentially addressed all of the issues that normally might take a few years to address.
Speaker #1: And so all of the normal maintenance matters are behind us now. We've identified, like the gas turbine opportunity at Riverville. We've identified some bigger long-term cost takeouts at Riverville.
Mark Kowlzan: And so all of the, the normal maintenance matters are behind us now. We've got- we've identified, like the, the, gas turbine opportunity at Riverville. We've identified some bigger long-term, cost out, takeouts at, Riverville. And then, we'll continue just to, instill the, you know, the day-to-day, normal practice at, at Massillon and Riverville in terms of, operational expertise. But no, we, we, we accelerated that execution and took advantage of the, the opportunity this fall, when we not only, had the capability, but we, we were going to manage inventories, you know, to our needs, and so we took advantage of that.
And so all of the, the normal maintenance matters are behind us now. We've got- we've identified, like the, the, gas turbine opportunity at Riverville. We've identified some bigger long-term, cost out, takeouts at, Riverville. And then, we'll continue just to, instill the, you know, the day-to-day, normal practice at, at Massillon and Riverville in terms of, operational expertise. But no, we, we, we accelerated that execution and took advantage of the, the opportunity this fall, when we not only, had the capability, but we, we were going to manage inventories, you know, to our needs, and so we took advantage of that.
Speaker #1: And then we'll continue just to instill the, you know, the day-to-day normal practice at Macellan and Riverville in terms of operational expertise. But no, we accelerated that execution and took advantage of the opportunity this fall.
Speaker #1: When we not only had the capability, but we were going to manage inventories to our needs. And so we took advantage of Gabe, on the Gabe, sorry, that.
Speaker #1: When we not only had the capability, but we were going to manage inventories to our needs. And so we took advantage of
Gabrial Shane Hajde: Got it.
Gabe Hajde: Got it.
Speaker #1: And Got it. on the accretion piece, we are forecasting it to be slightly accretive in the first quarter and then improving as we get on.
Thomas Hassfurther: And, Gabe, sorry. On the accretion piece, we are forecasting it to be slightly accretive in Q1 and then improving, as we get on and, you know, seasonality improves as well there, so.
Kent Pflederer: And, Gabe, sorry. On the accretion piece, we are forecasting it to be slightly accretive in Q1 and then improving, as we get on and, you know, seasonality improves as well there, so.
Speaker #1: And, you know, seasonality improves as well there, so.
Speaker #4: Thank you. One quick last one, hopefully on CapEx. Just, I guess, directionally, I think things are probably coming in maybe a little bit heavy in '26.
Gabrial Shane Hajde: Thank you. One quick last one, we'll stay on CapEx. Just, I guess, directionally, I think things are probably coming in maybe a little bit heavy in 2026, and you talked about maybe only a smidge of the $250 for the two gas turbines, the majority of that hitting in 2027. Just directionally, would we expect things to be flattish next year on CapEx or down? I know we're just kicking off 2026, but just any preliminary thoughts?
Gabe Hajde: Thank you. One quick last one, we'll stay on CapEx. Just, I guess, directionally, I think things are probably coming in maybe a little bit heavy in 2026, and you talked about maybe only a smidge of the $250 for the two gas turbines, the majority of that hitting in 2027. Just directionally, would we expect things to be flattish next year on CapEx or down? I know we're just kicking off 2026, but just any preliminary thoughts?
Speaker #4: And you talked about maybe only a smidge of the $250 million for the two gas turbines, the majority of that hitting in '27. Just directionally, would we expect things to be flattish next year on CapEx, or down?
Speaker #4: I know we're just kicking off '26, but just any preliminary
Speaker #4: Thoughts? I think we're in a range.
Mark Kowlzan: I think we're in a range right now that you know, is in this low 800. The gas turbines will continue to you know, to keep the number on the higher end here. We're finishing up the big box plant in Ohio. We've got a couple of other projects that will finish up this year on the box plant side. We've got on a bigger pieces of capital, you've got the Jackson, Alabama, winder installation and you know, improvements there. So there's a few discrete big pieces. Some of those will be wrapping up this year.
Mark Kowlzan: I think we're in a range right now that you know, is in this low 800. The gas turbines will continue to you know, to keep the number on the higher end here. We're finishing up the big box plant in Ohio. We've got a couple of other projects that will finish up this year on the box plant side. We've got on a bigger pieces of capital, you've got the Jackson, Alabama, winder installation and you know, improvements there. So there's a few discrete big pieces. Some of those will be wrapping up this year, my goal, quite frankly, would be to see the number come down.
Speaker #1: Right now that, you know, is in this low 800s. The gas turbines will continue to, you know, to keep the number on the higher end here.
Speaker #1: We're finishing up the big box plant in Ohio. We've got a couple of other projects that will finish up this year on the box plant side.
Speaker #1: We've got on a bigger piece of capital—you've got the Jackson, Alabama winder installation and, you know, improvements there. So, there's a few discrete big pieces.
Speaker #1: Some of those will be wrapping up this year. My goal, quite frankly, would be to see the number come down. There's a number of reasons for that.
Thomas Hassfurther: ... my goal, quite frankly, would be to see the number come down. There's a number of reasons for that. Part of it is just the psychological discipline that you want the organization to take a pause once in a while and step back and then look at what's been done over the last few years, and then go truly put some optimization on all of the capital. So, without giving you a number and quantifying that number, my goal would be to bring the number down below the $800 million level. We did that back in 2022 into 2023, and then we had the opportunities, and we brought that number up into the $600 million level.
There's a number of reasons for that. Part of it is just the psychological discipline that you want the organization to take a pause once in a while and step back and then look at what's been done over the last few years, and then go truly put some optimization on all of the capital. So, without giving you a number and quantifying that number, my goal would be to bring the number down below the $800 million level. We did that back in 2022 into 2023, and then we had the opportunities, and we brought that number up into the $600 million level.
Speaker #1: Part of it is just the psychological discipline that you want the organization to take a pause once in a while and step back, and then look at what's been done over the last few years, and then go truly put some optimization on all of the capital.
Speaker #1: So without giving you a number and quantifying that number, my goal would be to bring the number down below the 800 million dollar level we did that back in 2022 into 2023.
Speaker #1: And then we had the opportunities and we brought that number up into the 600 million level. Last year, you know, 800 million with the bigger projects and, you know, new box plants.
Thomas Hassfurther: Last year, you know, $800 million with the bigger projects and, you know, new box plants. So it really depends on the opportunities, but we are mindful of the discipline required to, you know, spend the money wisely. So long, long answer to a question, but the goal would be to get it down, but we will, we'll take advantage of the opportunities.
Last year, you know, $800 million with the bigger projects and, you know, new box plants. So it really depends on the opportunities, but we are mindful of the discipline required to, you know, spend the money wisely. So long, long answer to a question, but the goal would be to get it down, but we will, we'll take advantage of the opportunities.
Speaker #1: So it really depends on the opportunities, but we are mindful of the discipline required to, you know, spend the money wisely. So long answer to a question, but the goal would be to get it down, but we will take advantage of the opportunities.
Speaker #4: Thank you. Good luck.
Charlie Muir-Sands: Thank you. Good luck.
Gabe Hajde: Thank you. Good luck.
Speaker #1: Thank you. Next question.
Thomas Hassfurther: Thank you. Next question.
Mark Kowlzan: Thank you. Next question.
Speaker #5: Our next question Question. comes from Anaja Shah from UBS. Please go ahead with your question.
Operator: Our next question comes from Anuja Shah from UBS. Please go ahead with your question.
Operator: Our next question comes from Anuja Shah from UBS. Please go ahead with your question.
Speaker #6: Hi, good morning,
Anojja Aditi Shah: Hi, good morning, everyone.
Anojja Shah: Hi, good morning, everyone.
Speaker #6: everyone. I want Morning, Anaja. to morning. I just wanted to ask more specifically, what changed in January? It does seem like there was a pretty sudden upturn in demand.
Thomas Hassfurther: Morning, Anuja.
Mark Kowlzan: Morning, Anuja.
Anojja Aditi Shah: Morning. I just wanted to ask more specifically, what changed in January? It does seem like there was a pretty sudden upturn in demand. And I know you talked about less uncertainty versus last year, but consumer confidence numbers are still kind of depressing, and CPG earnings tone hasn't really changed. So do you think your customers are responding to maybe the promise of stimulus in the one big beautiful bill, and then after we get through tax refund season, we can see some choppiness again in demand? What are you hearing from your customers on that?
Anojja Shah: Morning. I just wanted to ask more specifically, what changed in January? It does seem like there was a pretty sudden upturn in demand. And I know you talked about less uncertainty versus last year, but consumer confidence numbers are still kind of depressing, and CPG earnings tone hasn't really changed. So do you think your customers are responding to maybe the promise of stimulus in the one big beautiful bill, and then after we get through tax refund season, we can see some choppiness again in demand? What are you hearing from your customers on that?
Speaker #6: And I know you talked about less uncertainty versus last year, but consumer confidence numbers are still kind of depressing. And CPG earnings tone hasn't really changed.
Speaker #6: So, do you think your customers are responding to maybe the promise of stimulus in the one big, beautiful bill, and then, after we get through tax refund season, we could see some choppiness again in demand?
Speaker #6: What are you hearing from your customers on that?
Thomas Hassfurther: I think the upturn in demand is a couple things. One is, obviously, as we've talked about from an inventory standpoint, they ran inventories incredibly low. So, you know, you can't continue to operate forever at these tremendously low inventory numbers. But I think there is a lot more positivity going forward, you know, with tax reform, a number of different things. I mentioned, you know, wages and some other things. Consumer sentiment, you know, it depends on what, you know, on what, you know, survey you're looking at, too. You know, one day you get a survey that's positive, the next one is a little more negative. I think the questions get slanted, and a number of different things occur.
Speaker #1: I think the upturn in demand is a couple of things. One is obviously as we've talked about from an inventory standpoint, they ran inventories incredibly low.
Thomas Hassfurther: I think the upturn in demand is a couple things. One is, obviously, as we've talked about from an inventory standpoint, they ran inventories incredibly low. So, you know, you can't continue to operate forever at these tremendously low inventory numbers. But I think there is a lot more positivity going forward, you know, with tax reform, a number of different things. I mentioned, you know, wages and some other things. Consumer sentiment, you know, it depends on what, you know, on what, you know, survey you're looking at, too. You know, one day you get a survey that's positive, the next one is a little more negative. I think the questions get slanted, and a number of different things occur.
Speaker #1: can't continue to operate forever at these tremendously low inventory numbers. But I So, you know, you think there is a I think there is a lot more positivity going forward.
Speaker #1: You know, with tax reform, a number of different things—I mentioned, you know, wages and some other things. Consumer sentiment, you know, it depends on who, it depends on what—you know, on what survey you're looking at too.
Speaker #1: I mean, you know, one day you get a survey that's positive, the next one is a little—it's a little more negative. I think the questions get slanted and a number of different things occur.
Speaker #1: But I think overall, anytime you get more you get more money in the pockets of the consumer, you know, we're going to see we're going to see more demand and that ultimately reflects in the box business.
Thomas Hassfurther: But I think, I think overall, anytime you get more, you get more money in the pockets of the consumer, you know, we're gonna see, we're gonna see more demand, and that, and that, ultimately reflects in the box business. And, and I think from our, from our customer's point of view, of course, we try to align with, you know, the very best and, and the ones that, you know, are the, are, tend to be the winners in their space. You know, they tend to have a much more positive viewpoint going forward.
But I think, I think overall, anytime you get more, you get more money in the pockets of the consumer, you know, we're gonna see, we're gonna see more demand, and that, and that, ultimately reflects in the box business. And, and I think from our, from our customer's point of view, of course, we try to align with, you know, the very best and, and the ones that, you know, are the, are, tend to be the winners in their space. You know, they tend to have a much more positive viewpoint going forward.
Speaker #1: And I think from our customers' point of view, of course, we try to align with, you know, the very best and the ones that, you know, are tend to be the winners in their space.
Speaker #1: You know, they tend to have a much more positive viewpoint going forward. And as I said, all the noise that took place in 2025 with all the different things that were going on with the new administration—I think a lot of that, the air is cleared on that.
Thomas Hassfurther: And as I said, all the noise that took place in 2025, with all the different things that were going on with the new administration, I think a lot of that, the air is cleared on that, and I think people can see demand improving, and count on it a little bit better than they did in the past.
And as I said, all the noise that took place in 2025, with all the different things that were going on with the new administration, I think a lot of that, the air is cleared on that, and I think people can see demand improving, and count on it a little bit better than they did in the past.
Speaker #1: And I think people can see demand improving and count on it a little bit better than they did in the
Speaker #1: past. Yep.
Anojja Aditi Shah: Yep. Okay, it's good to hear. Let's hope you're right. And then for my second question, did I miss the cash tax expectation for 2026? And could you get a meaningful step down year-over-year this year? Because, I don't know, maybe, immediate depreciation expensing provisions on Glendale or anything else.
Anojja Shah: Yep. Okay, it's good to hear. Let's hope you're right. And then for my second question, did I miss the cash tax expectation for 2026? And could you get a meaningful step down year-over-year this year? Because, I don't know, maybe, immediate depreciation expensing provisions on Glendale or anything else.
Speaker #6: Okay. That's good to hear. Let's hope you're right. And then for my second question, did I miss the cash tax expectation for 2026? And could you get a meaningful step down year over year this year because I don't know, maybe immediate depreciation expensing provisions on Glendale or anything
Speaker #1: No .
Thomas Hassfurther: Anuja, we didn't provide what the cash tax forecast would be for the year. It'll be higher, though, than we paid out in 2025. The Greif acquisition and being able to take some of the immediate depreciation on those assets was a big help. So but, but we'll, we'll be approaching it maybe a little more normal levels, but we will still get some benefit from the bonus depreciation provisions.
Kent Pflederer: Anuja, we didn't provide what the cash tax forecast would be for the year. It'll be higher, though, than we paid out in 2025. The Greif acquisition and being able to take some of the immediate depreciation on those assets was a big help. So but, but we'll, we'll be approaching it maybe a little more normal levels, but we will still get some benefit from the bonus depreciation provisions.
Speaker #2: sir . We A no , didn't provide with the cash tax forecast would be for the year . It though , will be than we higher , paid out 25 .
Speaker #2: The grief acquisition and being able to take five . The grief in acquisition and being able to take some of the immediate depreciation on assets was a big those help .
Speaker #2: The grief acquisition and being able to take five . The grief in acquisition and being able to take some of the immediate depreciation on assets was a big those So but we'll be approaching a little and maybe more normal levels , but we will still get some benefit from the bonus depreciation provisions .
Anojja Aditi Shah: All right. Sounds good. I'll turn it over. Thank you.
Anojja Shah: All right. Sounds good. I'll turn it over. Thank you.
Speaker #3: All right. Sounds good. I'll turn it over. Thank you.
Thomas Hassfurther: Thanks, Anuja. Next question, please.
Mark Kowlzan: Thanks, Anuja. Next question, please.
Speaker #4: Thanks . question Next please .
Operator: Our next question comes from Anthony Pettinari from Citi. Please go ahead with your question.
Operator: Our next question comes from Anthony Pettinari from Citi. Please go ahead with your question.
Speaker #5: Our next question comes from Anthony Pettinari from Citi. Please go ahead with your question.
Anthony James Pettinari: Good morning.
Anthony Pettinari: Good morning.
Thomas Hassfurther: Morning, Anthony.
Thomas Hassfurther: Morning, Anthony.
Anthony James Pettinari: For the price increase for containerboard and boxes, should we expect the timing and implementation of the price hike for the kind of the Greif portion of the business to be pretty much identical to the legacy business? Or do they-- are there any sort of existing contracts or terms that might make it a little bit different or longer?
Anthony Pettinari: For the price increase for containerboard and boxes, should we expect the timing and implementation of the price hike for the kind of the Greif portion of the business to be pretty much identical to the legacy business? Or do they-- are there any sort of existing contracts or terms that might make it a little bit different or longer?
Speaker #6: Good morning .
Speaker #4: Good morning Anthony .
Speaker #6: the hey for For the price increase , for containerboard and boxes , should we expect the timing and implementation of the price hike for the kind of the grip portion of the business to be pretty much identical to the legacy business ?
Speaker #6: Or do they ? Are there any sort of existing contracts or terms that might make it a little bit different or longer ?
Thomas Hassfurther: We would expect the acquisition plans to roll out the same as PCA.
Thomas Hassfurther: We would expect the acquisition plans to roll out the same as PCA.
Speaker #4: We would expect we would expect the the acquisition plants to roll out the same as the same as PCA .
Anthony James Pettinari: Got it. Got it. And I mean, there were some pretty large mill closures in the industry last year, and obviously, you have Wallula. Understand that you don't, you know, sell into the open market as much as others. Can you just talk about sort of availability of board in the open market from a PCA perspective and just sort of what the market feels like, given some pretty major, you know, supply actions that happened at the end of last year?
Anthony Pettinari: Got it. Got it. And I mean, there were some pretty large mill closures in the industry last year, and obviously, you have Wallula. Understand that you don't, you know, sell into the open market as much as others. Can you just talk about sort of availability of board in the open market from a PCA perspective and just sort of what the market feels like, given some pretty major, you know, supply actions that happened at the end of last year?
Speaker #6: Got it . Okay . And I mean , there were some pretty large mill closures in the industry last year . And obviously you have Wallula .
Speaker #6: Understand that you don't sell into the open market much as as others . Can you just talk about sort of availability of board in the open market from a PCA perspective and just sort of what the market feels like given some pretty major , you know , supply actions that happened at the at the end of last year .
Thomas Hassfurther: Yeah. All I can tell you is, from a PCA perspective, we're gonna have to run the mills full out. Things are gonna be tight. We're not gonna have additional board, you know, that we're gonna be able to sell into the open market. And, you know, that's all I can comment on. You can draw other conclusions from your comments, relative to the industry.
Thomas Hassfurther: Yeah. All I can tell you is, from a PCA perspective, we're gonna have to run the mills full out. Things are gonna be tight. We're not gonna have additional board, you know, that we're gonna be able to sell into the open market. And, you know, that's all I can comment on. You can draw other conclusions from your comments, relative to the industry.
Speaker #4: Yeah. Well, what I can tell you is, from a PCA perspective, we're going to have to run the mills, pull out.
Speaker #4: Things are going to be tight . We're not going to have additional board . You know , that we're going to be able to sell into the open market .
Speaker #4: And you know, that's, that's, that's, that's all I can draw other comment can on. Your conclusions, your comments, relative to the industry.
Anthony James Pettinari: Got it. Got it. Maybe just one last one. In terms of the CapEx for 2026, $840 million to $870 million, I think you said the energy projects would be a small sliver of that. I'm just wondering if you can quantify that, and then if there are any other major projects, maybe on the box plant level that we should think about for 2026 or that you'd point out?
Anthony Pettinari: Got it. Got it. Maybe just one last one. In terms of the CapEx for 2026, $840 million to $870 million, I think you said the energy projects would be a small sliver of that. I'm just wondering if you can quantify that, and then if there are any other major projects, maybe on the box plant level that we should think about for 2026 or that you'd point out?
Speaker #6: Got it . Got it . Maybe just one last of the one in terms CapEx for 26 , eight , 40 to 8 , 70 , the I the think you said energy projects would be a small sliver of that .
Speaker #6: I'm just—if you can quantify—I’m wondering if that. And then, if there are any other major projects, maybe on the box plant level, that we should think about for '26 or that you would point out.
Thomas Hassfurther: Yeah, you know, we're, again, we're finishing up the detailed engineering right now and, getting ready to get approval. So there'll be, you know, a small amount of if we're spending 250, you might spend $50 million this year on ordering equipment and, getting steel, you know, and different things ordered. But, the bigger pieces of capital this year, of the 800+, are coming from the completion of the, the new Ohio box plant, the big project down at Jackson. The Jackson winder project and, all of the, expansion down at Jackson was over $100 million, project over a 2-year period. And then we've got a couple of other big projects at, the Counce number two machine.
Mark Kowlzan: Yeah, you know, we're, again, we're finishing up the detailed engineering right now and, getting ready to get approval. So there'll be, you know, a small amount of if we're spending 250, you might spend $50 million this year on ordering equipment and, getting steel, you know, and different things ordered. But, the bigger pieces of capital this year, of the 800+, are coming from the completion of the, the new Ohio box plant, the big project down at Jackson. The Jackson winder project and, all of the, expansion down at Jackson was over $100 million, project over a 2-year period. And then we've got a couple of other big projects at, the Counce number two machine.
Speaker #4: You know , we're again , finishing up the detailed engineering right now and getting ready to get approval . So there'll be , you know , a a small amount of if we're spending 250 , you might spend 50 million this year on ordering equipment and getting , getting steel , you know , different things ordered .
Speaker #4: But the bigger pieces of capital , this year , of the 800 plus are coming from the the of the new box Ohio completion of plant .
Speaker #4: The big project down at the the Jackson Winder Jackson , project and all of the expansion down at Jackson was over $100 million .
Speaker #4: Project over a two-year period. And then we've got a couple of other big projects at the accounts number two machine.
Thomas Hassfurther: It's a couple of phases of work, but the first phase begins this March, and so we're putting in a considerable amount of effort to upgrade the number two paper machine. And then there, we're finishing up a project in Syracuse, New York. And so there's a couple of other big box plant upgrade projects that are finishing up. And then the rest is just the numerous normal projects that we always bring on. On the converting side, new converting pieces of equipment that are being installed, corrugators, converting lines, upgrades. So it's spread out evenly, but that's the good news, that we're, you know, continuing to invest and grow with the customers as they need us to.
It's a couple of phases of work, but the first phase begins this March, and so we're putting in a considerable amount of effort to upgrade the number two paper machine. And then there, we're finishing up a project in Syracuse, New York. And so there's a couple of other big box plant upgrade projects that are finishing up. And then the rest is just the numerous normal projects that we always bring on. On the converting side, new converting pieces of equipment that are being installed, corrugators, converting lines, upgrades. So it's spread out evenly, but that's the good news, that we're, you know, continuing to invest and grow with the customers as they need us to.
Speaker #4: It's a couple of phases of work, but the first phase begins this March. And so, putting in a considerable amount of effort, we're upgrading the number two paper machine.
Speaker #4: And and then we're finishing up a project in New Syracuse , York . And , and so there's a couple of other box big plant upgrade projects that are finishing up .
Speaker #4: And then the rest is the the just numerous normal projects that we always bring on the , the on the converting side , new converting pieces of equipment that are being installed , Corrugators converting lines , upgrades .
Speaker #4: it's So spread out evenly . But but that's the good news that we're , continuing to invest and you know , and grow customers as they need us to .
Anthony James Pettinari: Okay. That's very helpful. I'll turn it over.
Anthony Pettinari: Okay. That's very helpful. I'll turn it over.
Speaker #6: Okay, that's very helpful. I'll turn it over.
Thomas Hassfurther: Thank you. Next question.
Mark Kowlzan: Thank you. Next question.
Speaker #6: . Thank you .
Operator: Our next question comes from Phil Ng from Jefferies. Please go ahead with your question.
Operator: Our next question comes from Phil Ng from Jefferies. Please go ahead with your question.
Speaker #4: Next question .
Speaker #5: Our next question comes from Phil Ng from Jefferies. Please go ahead with your question.
Phil Ng: Hey, guys. Question for Tom. The pickup in orders in January, you know, how much would you attribute that being from that destock that you saw reversing? You know, is that uptick pretty broad-based, isolated to end markets? When I look at the spread between bookings and billings, it's quite large, larger than normal, from what I can tell. I think that's a bullish indicator, but just give us a little more color on how we kind of interpret some of these things.
Philip Ng: Hey, guys. Question for Tom. The pickup in orders in January, you know, how much would you attribute that being from that destock that you saw reversing? You know, is that uptick pretty broad-based, isolated to end markets? When I look at the spread between bookings and billings, it's quite large, larger than normal, from what I can tell. I think that's a bullish indicator, but just give us a little more color on how we kind of interpret some of these things.
Speaker #7: Hey , guys . Question for Tom . To in orders in pickup January . You know , how much would you attribute that being from that destock that you saw reversing ?
Speaker #7: You know , is that uptick pretty broad based ? Isolated few end markets ? When I look at the spread between bookings and billings , it's quite large , larger than normal from what I can tell .
Speaker #7: I think that's a bullish indicator. But just give us a little more color on how we kind of interpret some of these things.
Thomas Hassfurther: Okay. I think, Phil, it's very difficult to, you know, separate out anything relative to inventory restocking. There's some of that. I don't think that's the majority of it by any stretch. I think that our customers are preparing for more demand. They've got more demand. That's what we're hearing. I think that, you know, right now, being late in the month, you know, we've got a lot more visibility as an example into February, and February remains very strong. So it's kind of following on to January, which helps the bullishness of the forecast. And, you know, in general, it's just a much more positive feeling across the board.
Thomas Hassfurther: Okay. I think, Phil, it's very difficult to, you know, separate out anything relative to inventory restocking. There's some of that. I don't think that's the majority of it by any stretch. I think that our customers are preparing for more demand. They've got more demand. That's what we're hearing. I think that, you know, right now, being late in the month, you know, we've got a lot more visibility as an example into February, and February remains very strong. So it's kind of following on to January, which helps the bullishness of the forecast. And, you know, in general, it's just a much more positive feeling across the board.
Speaker #4: Okay , I .
Speaker #8: Think , Phil , it's it's very difficult to , you know , separate out anything relative to inventory restocking . There's there's some of that I don't think that's the majority of it by any stretch .
Speaker #8: I think that our , our customers are preparing for for more demand . They've got more demand we're . That's , that's hearing I think that , you the know , right now being late in the month , you know , we've got a lot more visibility as , as an example into February and February remains very strong .
Speaker #8: So it's kind of following on to on to January , which helps the bullishness of the of the forecast you know , in general .
Speaker #8: it's just a much more And positive feeling across the board . And as I mentioned earlier we've of those got some segments that were real laggards last year that are beginning to show some show some new life and come back to what I consider to be , you know , a little more normal demand that we've seen in the past .
Thomas Hassfurther: And as I mentioned earlier, we've got some of those segments that were real laggards last year that are beginning to show some new life and come back to what I'd consider to be, you know, a little more normal demand that we've seen in the past. And I think as housing, you know, begins to come forward again, I think with mortgage rates now having dropped under 6%, that's a real catalyst for new home building and remodeling, et cetera. So, that'll be a big benefit for us in that sector.
And as I mentioned earlier, we've got some of those segments that were real laggards last year that are beginning to show some new life and come back to what I'd consider to be, you know, a little more normal demand that we've seen in the past. And I think as housing, you know, begins to come forward again, I think with mortgage rates now having dropped under 6%, that's a real catalyst for new home building and remodeling, et cetera. So, that'll be a big benefit for us in that sector.
Speaker #8: And I think as , as housing , you know , begins to begins to come forward again . I think with , with mortgage rates now having dropped under 6% , that's , that's a real catalyst for , for home new building and remodeling , etc.
Speaker #8: . So that'll be that'll be a big benefit in that for us sector .
Phil Ng: Gotcha. And then, pretty encouraging, all that great stuff. And then I think your-
Philip Ng: Gotcha. And then, pretty encouraging, all that great stuff. And then I think your-
Speaker #7: Gotcha. And pretty, then encouraging, all that great stuff. And then I think your commentary is you expect to be running full out all this year.
Thomas Hassfurther: Mm-hmm
Thomas Hassfurther: Mm-hmm
Phil Ng: ... your commentary is you expect to be running full out all this year?
Philip Ng: ... your commentary is you expect to be running full out all this year?
Thomas Hassfurther: Yeah.
Thomas Hassfurther: Yeah.
Phil Ng: Is that a function of demand getting much better this year? I mean, certainly the Wallula piece is part of it, but, you know, predicated on that, like, what kind of box shipments should we assume for you to be running full out?
Philip Ng: Is that a function of demand getting much better this year? I mean, certainly the Wallula piece is part of it, but, you know, predicated on that, like, what kind of box shipments should we assume for you to be running full out?
Speaker #7: Is that a function of demand getting much better this year ? I mean , certainly the piece is part of it . But , you know , predicated on that , like what kind of box shipments should we assume for you to be running full out ?
Thomas Hassfurther: Well, we're definitely gonna be up, and I think one of the things that we're really focused on this year, you know, although the capital intensity in this business is tremendous, as alluded to in these numbers, you know, that we have to spend capital every year, you know, to get the job done. I think, as Mark mentioned earlier, you know, we are gonna be really focused on maximizing the returns on the capital that we've put in place, and this is gonna be a great year for us to really test that. And you know, so we're very well positioned for significant growth in the business.
Thomas Hassfurther: Well, we're definitely gonna be up, and I think one of the things that we're really focused on this year, you know, although the capital intensity in this business is tremendous, as alluded to in these numbers, you know, that we have to spend capital every year, you know, to get the job done. I think, as Mark mentioned earlier, you know, we are gonna be really focused on maximizing the returns on the capital that we've put in place, and this is gonna be a great year for us to really test that. And you know, so we're very well positioned for significant growth in the business.
Speaker #8: Well , it's we're definitely we're definitely going to be up . And I think one of the things that that we're really focused on this year , you know , although although the capital intensity in this business is tremendous alluded as as to in these numbers , you know , that we have to spend capital every year , you know , to to get the job done .
Speaker #8: I think, as Mark mentioned earlier, you know, we are going to be really focused on maximizing the returns on the capital that we've put in place.
Speaker #8: And this is going to be a great year for us to really that . test And , you know , so we're we're very well for significant positioned the growth in business .
Thomas Hassfurther: But again, you know, you don't build, you know, for some exorbitant amount of growth, because that never happens in this business. So, you know, we're well positioned for the normal growth, plus a little is where we're really positioned for. So I think we'll be in good shape, and of course, then we've got the ability to spend more capital if needed, if those opportunities present themselves.
But again, you know, you don't build, you know, for some exorbitant amount of growth, because that never happens in this business. So, you know, we're well positioned for the normal growth, plus a little is where we're really positioned for. So I think we'll be in good shape, and of course, then we've got the ability to spend more capital if needed, if those opportunities present themselves.
Speaker #8: And but again you know , you don't you don't build you don't build . You know for for some exorbitant amount of growth because that never happens in this So you know , business .
Speaker #8: we're we're we're well positioned for the normal growth . Plus a where little is we're is where we're really positioned for . I think we'll So be we'll be in good shape .
Speaker #8: And of course got the the ability then we've to spend more capital if needed , if those , if those opportunities present themselves .
Phil Ng: Okay. Tom, I don't want to pin you to a number, but it sounds like you're expecting 26 box demand for the broader industry to be more normalized this year, and then do PCA kind of stuff, kind of grow after-
Philip Ng: Okay. Tom, I don't want to pin you to a number, but it sounds like you're expecting 26 box demand for the broader industry to be more normalized this year, and then do PCA kind of stuff, kind of grow after-
Speaker #7: Okay, Tom, I want to pin you to the number, but it sounds like you're expecting 26 box demand for the broader industry to be more normalized this year.
Speaker #7: And then do PCA kind of stuff, kind of grow a little? No.
Thomas Hassfurther: Well, no, what I-
Thomas Hassfurther: Well, no, what I-
Phil Ng: ... kind of base it?
Philip Ng: ... kind of base it?
Thomas Hassfurther: No. No, what I'm saying is that I think the demand is going to definitely be up this year.
Thomas Hassfurther: No. No, what I'm saying is that I think the demand is going to definitely be up this year. And we at PCA will do what we normally do in terms of-
Speaker #8: No , no , what I'm saying is , is that the I think the demand is going to definitely be up this year .
Phil Ng: Uh-huh.
Thomas Hassfurther: And we at PCA will do what we normally do in terms of-
Speaker #8: And , and we and we at PCA will will do what we normally do in terms of , you know , how we how perform we versus , you know , versus the total demand .
Phil Ng: Got it
Philip Ng: Got it
Thomas Hassfurther: ... you know, how we, how we perform versus, you know, versus the total demand.
Thomas Hassfurther: ... you know, how we, how we perform versus, you know, versus the total demand.
Phil Ng: Okay. Makes sense. And then a question for Kent. It was helpful color. You said you expect the Price deal to be modestly accretive in Q1. I think last quarter, you gave us a framework in terms of LTM EBITDA in that $240 million range and maybe $20 million of run rate synergies by Q2. You know, appreciating things move around, you know, is that still a good way to think about it, or perhaps some of that gets pushed out a little bit in terms of achieving those targets?
Philip Ng: Okay. Makes sense. And then a question for Kent. It was helpful color. You said you expect the Price deal to be modestly accretive in Q1. I think last quarter, you gave us a framework in terms of LTM EBITDA in that $240 million range and maybe $20 million of run rate synergies by Q2. You know, appreciating things move around, you know, is that still a good way to think about it, or perhaps some of that gets pushed out a little bit in terms of achieving those targets?
Speaker #7: Okay . Makes sense . And then question a for it Ken , was helpful color . You said you expect the growth deal to be modestly accretive in one .
Speaker #7: I think last quarter you gave us a framework in terms of LTM EBITDA in that $240 million range, and maybe $20 million of run-rate synergies by Q2.
Speaker #7: Q you know , appreciating things move around . You know , is that to think still a good way about it ? Or perhaps some of that gets pushed out a little bit in terms of those achieving targets ?
Thomas Hassfurther: ... No, that's a very good way to think about it. That's where we still are, and I think we'll be in a better position to talk about some, you know, synergy opportunities in the, you know, next couple of calls going forward, now that we're able to operate this thing at full capacity.
Kent Pflederer: ... No, that's a very good way to think about it. That's where we still are, and I think we'll be in a better position to talk about some, you know, synergy opportunities in the, you know, next couple of calls going forward, now that we're able to operate this thing at full capacity.
Speaker #2: No , that's a way to very good think about where we it . That's still are . And I think we'll be in a better position to talk about some , you know , synergy opportunities in the , next couple of calls going forward .
Speaker #2: Now that we're able to operate this thing at full capacity.
Anthony James Pettinari: Okay, super. Thank you. Appreciate it, guys.
Philip Ng: Okay, super. Thank you. Appreciate it, guys.
Operator: Once again, if you would like to ask a question, please press star and one. Our next question comes from Charlie Muir-Sands from BNP Paribas. Please go ahead with your question.
Operator: Once again, if you would like to ask a question, please press star and one. Our next question comes from Charlie Muir-Sands from BNP Paribas. Please go ahead with your question.
Speaker #5: Once again, if you would like to ask a question, please press star, and one. Our next question comes from Charlie Muir from BNP Paribas.
Speaker #5: Please go ahead with your question.
Charlie Muir-Sands: Hey, morning, guys. Thank you very much for taking my questions. Just a couple of follow-ups. You've obviously outlined a big list of all the projects that are the focus of CapEx at the moment. If we think ahead sort of 12 months from today, given that you're gonna be running, you said, all out throughout this year, you anticipate, how much more capacity do you think you'll have in a 12-month time from today versus now? And how are you thinking about any kind of constraints or things you might need to do in order to get ahead of that? And then I've got one follow-up question. Thanks.
Charlie Muir-Sands: Hey, morning, guys. Thank you very much for taking my questions. Just a couple of follow-ups. You've obviously outlined a big list of all the projects that are the focus of CapEx at the moment. If we think ahead sort of 12 months from today, given that you're gonna be running, you said, all out throughout this year, you anticipate, how much more capacity do you think you'll have in a 12-month time from today versus now? And how are you thinking about any kind of constraints or things you might need to do in order to get ahead of that? And then I've got one follow-up question. Thanks.
Speaker #9: Hey . you very much Thank my questions . Just a couple of follow for taking ups . You've obviously a outlined big list of all the projects that are the focus of CapEx at the moment .
Speaker #9: If we think ahead , sort of 12 months from today , given that you're going to be running . You said all out through year , you anticipate how much more capacity do you think you'll have in in a from 12 months time today versus now ?
Speaker #9: And how are you thinking about any kind of constraints, or things you might need to do in order to get ahead of that?
Speaker #9: And then one follow up question . Thanks . I've got
Mark Kowlzan: The short answer to that is I'll let you know then what we're planning to do going forward. This - nothing's changed in terms of how PCA goes about our business to look at supplying containerboard into the converting side of the business. Tom just said it. We never get too far ahead of ourselves. The part of the impetus for the Greif acquisition is that we had two mills that we looked at that, say, were producing in that 600,000 tons run rate a year. We looked at that, and we know how to improve the operations, and we said we'll probably get over a couple of year period of time, depending on how much capital we want to spend, probably another 200,000 tons out of the two-mill system.
Mark Kowlzan: The short answer to that is I'll let you know then what we're planning to do going forward. This - nothing's changed in terms of how PCA goes about our business to look at supplying containerboard into the converting side of the business. Tom just said it. We never get too far ahead of ourselves. The part of the impetus for the Greif acquisition is that we had two mills that we looked at that, say, were producing in that 600,000 tons run rate a year. We looked at that, and we know how to improve the operations, and we said we'll probably get over a couple of year period of time, depending on how much capital we want to spend, probably another 200,000 tons out of the two-mill system.
Speaker #4: The short answer to that is I'll let you know then what we're planning to do . Going forward . Nothing's changed in terms of how PCA goes about our business .
Speaker #4: To look at supplying Containerboard into the converting side of the business . Tom just said it . We we never get too far ourselves .
Speaker #4: Ahead of that, part of the impetus for the acquisition is that we had two mills that we looked at that say we're producing in that 600,000 tons run rate a year.
Speaker #4: We looked at that and we know how to improve the operations , and we said , we'll probably get over a couple year period of time , depending on how much capital we want to spend .
Speaker #4: Probably another 200,000 tons out of the two-mill system. And so that provides the growth runway for the next couple of years for us.
Mark Kowlzan: And so that provides the growth runway for the next couple of years for us. So that's, that's how I'm looking at it. But it's, you know, it, it's gonna be tight. We're gonna have to run very well, as we normally do, run very efficiently. But, but never forget, we're always looking out on the horizon of, of where the next containerboard capacity will come from in PCA, and, and we've got different, levers to pull and different, ways to get there. But that's one of the high-class problems that we face all the time. Tom, you wanna add to that?
And so that provides the growth runway for the next couple of years for us. So that's, that's how I'm looking at it. But it's, you know, it, it's gonna be tight. We're gonna have to run very well, as we normally do, run very efficiently. But, but never forget, we're always looking out on the horizon of, of where the next containerboard capacity will come from in PCA, and, and we've got different, levers to pull and different, ways to get there. But that's one of the high-class problems that we face all the time. Tom, you wanna add to that?
Speaker #4: So that's that's how I'm looking at it . But it's , you it's going to be tight . We're going to have to run very well know , as we normally do run very efficiently .
Speaker #4: But never forget, we're always looking out on the horizon of where the next containerboard capacity will come from in PCA. And we've got different levers to pull and different ways to get there.
Speaker #4: But that's one of the high class problems that we face all the time . Tom , do you to that ? want to add No , nothing .
Thomas Hassfurther: No, nothing. Nothing, nothing really more to add other than, you know, we're, we'll grow, we'll grow with our, with our customers. That's, that's how we, that's how we operate.
Thomas Hassfurther: No, nothing. Nothing, nothing really more to add other than, you know, we're, we'll grow, we'll grow with our, with our customers. That's, that's how we, that's how we operate.
Speaker #8: Nothing . add other know , we're Nothing really than , you we'll more to grow . We'll our with grow with our customers .
Speaker #8: That's that's how we that's how we operate .
Charlie Muir-Sands: Thank you. And just the, the follow-up was, you quoted your bookings and billings numbers, so far. Can you just clarify, is that a fully legacy PCA number, or is that line getting blurred now? Have you sort of moved customers from Greif's operations into PCA or vice versa, or is that an all, all-in number? Thank you.
Charlie Muir-Sands: Thank you. And just the, the follow-up was, you quoted your bookings and billings numbers, so far. Can you just clarify, is that a fully legacy PCA number, or is that line getting blurred now? Have you sort of moved customers from Greif's operations into PCA or vice versa, or is that an all, all-in number? Thank you.
Speaker #9: Thank you . And just the follow up was you quoted your bookings and billings numbers so far . Can you just clarify . Is that a fully legacy pKa number or is that line getting blurred now ?
Speaker #9: Have you sort of moved customers from Growth operations into PCA or vice versa, or is that an all-in number? Thank you.
Thomas Hassfurther: Okay. That's, you know, I'm giving you essentially the legacy PCA number, but I also-
Thomas Hassfurther: Okay. That's, you know, I'm giving you essentially the legacy PCA number, but I also the visibility I do have into our Greif business, it doesn't quite mirror that, but it's pretty close to that.
Speaker #8: Okay . That's that's you know , I'm giving you essentially the legacy pKa number . But I also the I do visibility have into our growth business .
Charlie Muir-Sands: Right.
Thomas Hassfurther: the visibility I do have into our Greif business, it doesn't quite mirror that, but it's pretty close to that.
Speaker #8: It doesn't quite mirror that, but it's pretty close to that.
Charlie Muir-Sands: Many thanks.
Charlie Muir-Sands: Many thanks.
Mark Kowlzan: Thank you. Are there any other questions, Jamie?
Mark Kowlzan: Thank you. Are there any other questions, Jamie?
Speaker #9: Many times .
Speaker #4: Thank you . Are there any ? Jamie
Operator: Mr. Kowlzan, at this time, there are no more questions. Do you have any closing comments?
Operator: Mr. Kowlzan, at this time, there are no more questions. Do you have any closing comments?
Speaker #4: .
Speaker #5: At this time, there are no
Speaker #5: at this time , there are no
Speaker #5: More questions? Mr. Kosan, any other questions or comments before closing?
Speaker #5: More questions? Mr. Kosan, any other questions or comments before closing?
Mark Kowlzan: Yeah, again, I want to thank everybody for joining us today. And also, I just want to put out a big thanks to the folks at the Riverville mill and Counce mill in particular. A number of the employees and managers spent three or four days living at the mill during the storm and protecting the assets and running the mill and safeguarding things. So, from up here in Lake Forest to the facilities, thank you.
Mark Kowlzan: Yeah, again, I want to thank everybody for joining us today. And also, I just want to put out a big thanks to the folks at the Riverville mill and Counce mill in particular. A number of the employees and managers spent three or four days living at the mill during the storm and protecting the assets and running the mill and safeguarding things. So, from up here in Lake Forest to the facilities, thank you. And then all the box plants that are down and people that have been without power, again, it's been a struggle, but things are coming back, so we appreciate everybody's effort and the dedication that we have from our PCA employees, and look forward to talking with everybody on the next call in April. Thank you. Have a good day.
Speaker #4: thank everybody for Yeah , joining again , I And also I just want to put out a big thanks to the folks at the Riverview Mill and Counts Mill in particular , a number of the employees and managers spent 3 or 4 days living at the during mill the storm , and protecting the assets and running the mill and safeguarding things .
Speaker #4: So from from up here in Lake Forest to the facilities . Thank you . And then all the , box the are down and the people that have been without power , again , it's it's been a struggle , but things are coming back .
Mark Kowlzan: And then all the box plants that are down and people that have been without power, again, it's been a struggle, but things are coming back, so we appreciate everybody's effort and the dedication that we have from our PCA employees, and look forward to talking with everybody on the next call in April. Thank you. Have a good day.
Speaker #4: So, we appreciate everybody's effort and the dedication that we have from our PCA employees. And we look forward to talking with everybody on the next call in April.
Operator: Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.
Operator: Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.
