January 30, 2024
(press release)
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Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “Throughout the quarter, demand in the segment was stronger than our expectations. In addition, the higher volume along with the operational benefits of our capital spending program and continued emphasis on cost management and process efficiencies across our manufacturing and converting facilities drove operating and converting costs lower as well. We had an excellent restart of our Wallula, WA and the No. 3 machine to meet the stronger demand and build some needed inventory during the quarter. We plan to restart the No. 2 machine at the Wallula in the first quarter to help manage our expectations in the first half of 2024 for continued strong demand together with scheduled maintenance outages and the final phase of the containerboard conversion of the No. 3 machine at our Jackson, AL . The segment had very good results with volume slightly higher than expected and costs managed extremely well.” “Looking ahead as we move from the fourth and into the first quarter,” Mr. Kowlzan continued, “in our segment, we expect higher total corrugated products shipments from continued strong demand and two additional shipping days in the first quarter. Despite restarting the No. 2 machine at our Wallula , containerboard volume will be lower due to downtime associated with the conversion of the No. 3 machine at our Jackson and a scheduled maintenance outage at our Counce, TN . Prices and mix should be slightly higher with the implementation of our announced January price increases partially offset by a decrease in the published benchmark prices that occurred late in 2023, with export prices fairly flat. In our segment, we expect an improved mix to move prices slightly higher with flat sales volume. Recycled fiber and energy prices will be higher, and unusually cold seasonal weather will negatively impact usages and yields for energy, wood and chemicals along with higher operating costs associated with the restart of full operations at the Wallula compared to fourth quarter operations. Labor and benefits costs will have seasonal timing-related increases that occur at the beginning of a new year related to annual wage and benefit increases, the restart of payroll taxes, and share-based compensation expenses. Scheduled outage expenses will be higher and will include the significant first quarter impact of the conversion outage at our Jackson which is estimated to be ($.16) per share. Considering these items, we expect first quarter earnings of $1.54 per share.”
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