Good morning, and welcome to RYAM's first quarter 2025 earnings conference call. Joining me on today's call are Delisle Blomquist, our president and CEO, and Marcus Maltner, our CFO and senior vice president of finance. Last evening, we released our earnings report and accompanying presentation materials, which are available on our website at ryam.com. These materials provide key insights into our financial performance and strategic direction. During today's discussion, we may make forward-looking statements made subject to risks and uncertainties that could cause actual results to differ materially. These risks are outlined in our earnings release, SEC filings, and on slide two of the presentation. We will also reference certain non-GAAP financial measures to offer additional perspective on our operational performance. performance. Reconciliations to the most comparable gap measures can be found in our presentation on slides 22 through 27. We appreciate your participation today and ongoing interest in RYAM. I'd now like to turn the call over to Delisle to discuss our performance and strategic initiatives.

Well, thank you, Mickey, and good morning. I'll start with a review of our first quarter financial and operational results before handing it over to Marcus to provide further detail on our business segments, capital structure, and liquidity. After Marcus's comments, I'll return to discuss our strategic initiatives and outlook for the remainder of 2025. Let's now turn to page four. Let me begin with a direct and honest assessment. Our 2025 first quarter performance fell well short of our expectations. Compared to the first quarter of 2024, we reported an 8% decline in revenue and a 67 percent reduction in adjusted EBITDA. These results are disappointing, and as CEO, I take full responsibility for where we are. There were several distinct and compounding challenges this quarter. First, the lower revenue was driven primarily by our cellular specialties customers accelerating purchases into the previous quarter due to concern about supply chain disruptions from potential tariffs and a U.S. East Coast port strike. Second, we experienced operational setbacks from equipment failures and poor weather at our cellulose plants. In the case of our two sulfide operations, the equipment failures were primarily due to the extended 16-plus month period since the previous scheduled maintenance outages, and at Jessup, the unusual cold weather in January was a primary driver of lower productivity. Third, energy prices were higher than expected in the southeast United States due to the noted cold weather in January. Fourth, we increased the remediation reserves for a couple of our legacy sites due to recent changes in scope resulting from the regulatory process. Fifth, we experienced an unfavorable $5 million change in foreign exchange. And finally, our paperboard and the high-yield pulp businesses continued to be challenged by unfavorable market dynamics. Our most significant near-term issue is tariffs, particularly the 125% tariff imposed by China on U.S. source cellulose commodities. These tariffs affect approximately $85 million of our annual revenue. In response, we are actively mitigating this risk through three key actions, customer advocacy, market diversification, and operational adjustments. These efforts are already underway. I will discuss these risks in more detail later in the presentation. Despite these challenges, our financial foundation will remain solid, supported by liquidity of $272 million, net secured debt reduction of $624 million, and a net secured leverage ratio of 2.9 times Covenant EBITDA. However, given these uncertain market conditions, we've lowered our full-year guidance for adjusted EBITDA to a range of $175 to $185 million and adjusted free cash flow between $5 million and $15 million. With that, I'll hand the call over to Marcus to discuss the financial details.

Thank you, Delisle. Starting with our cellular specialty segment on slide five, quarterly net sales decreased by $5 million to $201 million. A 2% sales price increase was more than offset by a 2% decline in sales volume and an unfavorable sales mix. The decline in sales volumes resulted from accelerated customer purchases in the prior quarter and stronger prior year volumes ahead of the Tumiskim indefinite suspension. Operating income for the segment was $31 million, down $7 million compared to the same quarter last year, due to higher input costs, mainly higher energy, and operating challenges. EBITDA margins reduced from 27% to 23% as a result of the above impacts. Turning to slide 6, in cellulose commodities, net sales declined $19 million to $75 million. This decrease reflects the company's shift away from negative margin commodity grades, partially offset by a 2% increase in pricing. Operating results improved by $6 million year-over-year to a loss of $13 million, primarily due to reduced commodity losses, partially offset by higher input costs and operational challenges. Slide 7 covers our new biomaterials segment. Net sales remained steady at $7 million, with growth from bioethanol sales partially offset by lower feedstock availability from the Tartas cellulose plant. Operating income was flat at $2 million, as increased shared and ancillary costs to support the segment's new operating structure were offset by lower maintenance expenses. EBITDA margins for the segment held steady at 29%. Our paperboard results are set out on slide 8. Net sales were down $4 million to $49 million, reflecting a 4% decrease in sales prices and a 3% decline in sales volumes due to increased European imports and weaker product mix. The segment recorded an operating loss of $2 million, declining $10 million due to volume and pricing impacts, higher purchase pulp costs, and maintenance expenses, as well as the impact of Tumisming custodial site costs. Slide 9 summarizes our high-yield pulp segment, where net sales declined $3 million to $31 Sales prices and volumes decreased by 7% and 4% respectively, as a result of continued market oversupply, notably in China, and shipment timing challenges to customers in India. Operating losses increased to $7 million, driven by lower market pricing, reduced volumes, and to miscoming custodial site costs. Turning to slide 10, the company's consolidated operating income reflects several key drivers impacting the year-over-year performance. Lower pricing in paperboard and high-yield pulp segments were offset by modest price improvements in CS, which came in below due to weaker product mix. We also realized lower sales volumes as we continued to reduce our exposure to non-fluff commodity markets. Costs increased during the quarter, driven by operational challenges at our plants and higher input costs. Corporate costs reflect a $12 million non-cash environmental reserve charge and foreign exchange impacts stemming from a weaker U.S. dollar. Lastly, Slide 11 sets out our capital structure and liquidity profile. Our financial position remains strong, despite our first quarter performance that fell short of expectations. We ended the quarter with solid liquidity of $272 million, which reflects $130 million in cash, $131 million available under our ABL facility, and $11 million under our French factoring facility. Net secured debt was reduced to $624 million, resulting in a net secured leverage ratio of 2.9 times Covenant EBITDA. Our continued discipline around cash flow, working capital management, and strategic capital allocation will ensure we remain in compliance with our debt covenants based on our guidance and as we navigate the uncertainty of the tariffs. We remain focused on maximizing free cash flow generation and maintaining financial flexibility to support the company's strategic initiatives and deliver long-term shareholder value. With that, I will turn the call back to DeLaw.

All right. Thank you, Marcus. Let's turn to slide 12. As I mentioned earlier, our immediate focus is on tariff mitigation actions. As mentioned earlier, we have organized these initiatives into three key areas, customer advocacy, market diversification, and operational adjustments. I'll expand further on these mitigation strategies on the following slide. Though we remain committed to our key strategic initiatives, progress for some of these initiatives will likely be paused this year. For example, debt reduction in 2025 will likely be minimal due to the cash flow uncertainty caused by the tariff situation. Also, in the cellulose commodities segment, we will likely increase the production of non-fluff commodities in the short term to keep the plants operating at capacity while we work to mitigate the impact of the tariffs. Conversely, we plan to continue to pursue high-return but low-risk strategic investments that will improve operational efficiencies. We also believe that the change in the macroeconomic climate It doesn't affect the investment thesis of our biomaterials growth strategy, given that the investments in commerce will be U.S. centric. So we will continue to execute our biomaterials strategy. The strategy's key projects will continue to advance, and we expect to make final investment decisions on several projects in the second half of this year. moving to slide 13 currently within our cellulose commodities segment only our fluff pulp sales to china are directly subject to tariffs in addition though we expect some indirect secondary impact from a few u.s cellulose specialty customers that are also facing high tariffs into china to address this challenge we are actively diversifying our sales channels into non-tariff affected markets, taking immediate steps to gradually shift production toward other commodity grades, and engaging in ongoing dialogues with customers to mitigate disruptions. We remain closely attuned to the evolving trade landscape and will continue to proactively take steps to further protect our market position. Though our paper board products are USMCA compliant, thus currently avoid tariffs, We are proactively working to reduce our exposure to potential future tariffs. For example, we are taking advantage of the current Buy Canada sentiment to increase our Canadian market share. And the Canadian government is positioned to impose retaliatory tariffs on U.S. paperboard products if needed. On slide 14, we outline our updated financial guidance and cash flow drivers for 2025. As already noted, our adjusted EBITDA guidance is now in the range of $175 to $185 million, which is roughly a $45 million reduction from the midpoint of our earlier guidance. The primary drivers of this lower EBITDA guidance include the following. We now assume a $20 million reduction in adjusted EBITDA from tariff-related impacts, specifically the estimated direct impact on cellulose commodities and secondarily to our CES customers. We also lowered the adjusted EBITDA guidance by $15 million to reflect our first quarter production problems, which we believe are largely behind us as the scheduled maintenance outages for all the HPC plants were completed in March and April. The new guidance also includes a $12 million non-cash environmental charge and corporate expenses. However, most of the actual cash spend for this charge will not occur before 2028. We are forecasting a favorable foreign exchange adjustment of $5 million due to the weakened U.S. dollar versus both the Canadian dollar and euro. And we are forecasting input prices to remain largely in line with our prior guidance. Finally, some CS orders were canceled or delayed in April after the initial tariffs were announced. Though we expect that most of these orders will be rebooked, this revenue and accompanying EBITDA will likely be recognized in the second half of the year. Consequently, the second quarter results will be lower than a straight linear extrapolation. Adjuster-free cash flow guide is expected to be in the range of $5 to $15 million. Cash interest expense is projected to be approximately $93 million, which is $12 million higher than normal due to the timing of interest payments related to our recent debt refinancing. Maintenance capital expenditure remains at $85 million, primarily driven by the extended plan maintenance outages at our HPC facilities, which, as noted, are largely behind us. The pause of $10 million under environmental and other reflected non-cash environmental reserve charge discussed earlier. Working capital is expected to contribute an additional $5 million, and lastly, we have reduce our expected cash outflows related to the France deferred energy payments to $5 million due to timing. On slide 15, we summarized the 2025 market outlook across each of our business segments in greater detail. In cellular specialties, we anticipate a mid-single-digit percentage price increase versus 2024, driven by our ongoing value over volume strategy. We believe that ETHR's demand will improve and other CS sales volumes will remain robust. However, at-state volumes face ongoing de-stocking pressures, and as I've noted, we acknowledge that at-state demand could present additional near-term risk as customers leverage the tariff-related pause and orders during April to accelerate the achievement of their de-stocking objective. Although this could intensify near-term volume impacts, we believe that such actions would expedite the de-stocking process, creating a healthier market balance sooner. As a result, we now anticipate cellular specialty EBITDA to be in the range of $237 to $245 million. In cellulose commodities, fluff demand remains generally strong, although we anticipate earnings pressure due to the significant Chinese tariff. These impacts will be offset by diversifying our sales channels into non-tariff-affected markets and shifting production to alternate commodity rates. Taking these factors into account, we project cellulose commodity EBITDA to be approximately a negative $5 million for the year. a biomaterial business is anticipated to deliver modest but positive EBITDA growth driven by contributions from our france bioethanol and powder lignosulfonate facilities and ongoing strategic investments we expect biomaterials 2025 EBITDA to be in the range of eight to ten million dollars and paperboard volumes are expected to modestly improve benefiting from improved market access within North America. However, prices remain under pressure due to competitive market dynamics, including the startup of new capacity. As a result, we expect paperboard EBITDA to be approximately $25 million for 2025. Turning to high-yield pulp, persistent oversupply continues to create more challenging market conditions. In response, we plan to idle one of our high-yield pulp production lines for 11 weeks starting in early June. We anticipate this segment's EBITDA to be approximately a negative $20 million this year. Corporate costs are expected to increase year-over-year, primarily driven by the non-cash environmental reserve charge in foreign exchange headwinds, partially offset by reduced costs following the completion of our ERP implementation. Overall, we now expect corporate expenses of $70 million for 2025. Lastly, on slide 16, we are targeting a net secured leverage ratio of approximately 3.1 times covenant EBITDA for year-end 2025, which is well within our debt covenants and remains within striking distance of our long-term objective of less than 2.5 times. Despite the current market uncertainties, we are confident that we will achieve our longer-term EBITDA target of $325 million because the growth and value drivers of our strategy remain intact. Our highly bespoke products in a supply-constrained market allow us to execute our value-over-volume CS strategy. Investment in low-risk but high-return cost reduction projects will increase profit margins and improve our long-term competitive advantage. Our exposure to the non-fluff commodities market will decrease as key cellular specialties and uses grow. And we continue to strongly believe that the biomaterial strategy is independent of the current tariff risk and thus remains a valuable growth opportunity for Ryan. With that, operator,

please open the call to questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please, while we poll for questions. First question, Matthew McKellar with RBC Capital Markets. Please go ahead.

Hi, good morning. Thanks for taking my questions. First, I'd like to just ask about fluff pulse. Can you just talk a bit more about what conditions are like in that market right now with China's retaliatory tariffs in place? What share of buyers in China would be absorbing the tariffs? Would you expect those buyers to continue to do so? And what kind of market diversification do you think is possible to achieve and over what kind of timeline should we be thinking about there?

Hey, Matt. This is Delisle. A great question about the fluff market. And I wish I had something more definitive to tell you, as you would probably understand, the conditions are very dynamic as we speak. But let me try to give you an idea of what's going on. With respect to our Chinese customers, a couple of them have decided that they will continue to place orders for the near term. But they've also communicated that this will not be something we should count on for the long term. I think at the end of the day, they're hoping that a resolution of the trade conflicts between the U.S. and China will be resolved in the next few months. And once that happens, then things can return to normal. But they have said that they can't afford to continue to pay the tariffs for the long term. So given that messaging, we've started pivoting away from China to pursue opportunities in other, call them non-tariff markets. And that would be principally India, Africa, the Middle East, and so forth. And we're having some success in finding demand for fluff in these other markets. And that's, I think, indicative of the fact that the fluff markets are largely supply-constrained right now. So we are finding opportunities to sell the fluff outside of China, but it is taking quite a bit of effort on the part of our sales teams and commercial teams to pursue such opportunities. In the medium term, if these tariffs continue, we will obviously look to a move away from fluff to some of the other non, some of the other cellulose commodities, principally things like viscose or paper pulp. And one of the things that came out of the Chinese, one of the things we're understanding anyway with respect to the Chinese tariffs is that the dissolving wood pulp is, at least what we're understanding, is possibly exempt from the tariffs. And that would include viscose. So we are having discussions and our viscose orders have resumed. And so that will be a real opportunity for us in going forward. Unfortunately, that's a business where the operating capacity remains high and the pricing is relatively healthy. And so that is an opportunity for us to be an option that we will consider. And then with respect to paper pulp, exceptionally large market, we're dropping the bucket in that market. And if needs be, that'll be a market that we'll use as kind of the backstop, if needed to, to move product into. So long-winded answer. I'm sorry about that, Matt. But at the end of the day, right now, we're having some success moving the product and keeping it in fluff, moving the product out of China and keeping it in fluff we have opportunities to move it into viscose into China currently the door seems to be open and then as a final last resort we'll be looking to get into paper pulp if we have to

that's great I appreciate all the color there moving on to CS you mentioned lower volumes following the accelerated purchases in Q4 and also it sounds like there's maybe a bit of noise following Liberation Day, could you just provide maybe a little bit more color around how volumes evolved, maybe following Liberation Day, how they've continued to evolve to today? And then how would you have us think about how your volumes sort of evolved through the balance of the year, both kind of across the segments and maybe for acetate

specifically? Okay. All right. Starting at the beginning of the year, we did start seeing that volumes of CES, principally to China, were lower than expectations. And in our conversations with our customers, we were informed that they had pre-ordered a lot of material going into 25 due to, at the time, the principal concern around being the potential for port strikes along the East Coast. I don't know if you remember that, but that didn't really get resolved until the middle of January around President Trump's inauguration. But I also was concerned generally about the potential for tariffs, because again, going into Christmas and coming out of Christmas into January, a lot of discussion about and a lot of news around the potential for tariffs. So we saw orders principally acetate, but also some of our other CS products that we do ship into China and other parts of the world were also affected. When we got to Liberation Day, April 2nd, and the announcement of the tariffs, and then the exceptionally accelerated tariffs that occurred between April 2nd and April 6th, first started by the U.S., and then we saw the response from China. We saw orders going into China just dry right up. Orders were canceled, they were deferred, they were delayed. And so really, at the end of the day, we didn't see much in terms of any new orders during that month. It wasn't until we got it to May that we saw that orders that had been previously paused began to resume for our CS customers in China. And that goes back to that we believe that our CS products have been largely exempted by the Chinese authorities, though there's been no official announcement on that. But orders have resumed for a number of our customers. Um, that being said, as I said, uh, during, during the formal part of the presentation, um, we do think some of our customers are going to take advantage of the pause or, uh, that in orders in April to accelerate the destocking that we, uh, we, we had, um, stated and noted in the acetate market, principally in China. um so we do expect that we'll see orders being lower this year than what we had um budgeted as well as we had in our initial guidance um uh however that being said um we did as i said the market our orders for our customers in in china are have resumed and we expect that um coming into Q3 and Q4, that will be back to normal, is what we've assumed in our guidance. But that Q2 will be light, given the pause in April. Things will start normalizing in May and June, and then by the time we get to July, things will be largely normal, is what we've assumed in our guidance.

Thanks. That's very helpful commentary. Last question for me. Could you please just kind of remind us what the puts and takes are around how your paperboard guidance for 2025 has evolved here? And maybe also remind us what you've assumed around pricing for the segment as part of your guide. And any just color around the mix impacts you saw in Q1 as well would be helpful.

Okay. All right, with respect to paperboard, you know, at the beginning of the year, we had noted that there was a risk of a $35 million tariff impact for the imports of our – that we – imports into the U.S. of our paperboard business. Obviously, that didn't transpire because of the fact that our products are U.S. CMA compliant. Also, what I stated in, I think, in February, the February call, was that a lot of our mitigation actions on paperboard were actually going to be spread out across the full enterprise in terms of cost reduction and actions taken to accelerate some projects that would improve our material usage and other cost-to-cost opportunities. And so the fact that this risk has now reversed and we're not seeing, don't expect that we're going to see any tariffs on our paper boards. The fact is that much of the mitigation was actually, it's still in place, but it's actually affecting the other businesses. And we have that baked in largely in the guides we've given. There was some mitigation that was paperboard and high-yield pulp specific that also reversed with the reversion of the tariff. The good example would be foreign exchange. We had expected the Canadian dollar to continue to weaken. um there was a point that it got down to 68 cents or 67 cents to the u.s dollar and then it did just the opposite and so um and now it's back to 72 cents 73 cents to the um to the u.s dollar and that was a 10 million dollar swing all by itself uh for us there was other things um that we had in our mitigation plan, like picking up additional Canadian customers, but that we also noted that the qualification process would be a little extended. We're continuing to pursue that and continue to go after that, but we're still in the qualification process. So the mitigation that would come from that is still to be realized, and we have not included any of that type of activity in the guidance that we've given to you today. With respect to pricing, pricing is – we expect to be – continue to decrease. It's down in our guidance roughly 5%, and that's really due to increased supply from the new SAPI capacity coming online, which is expected to hit the market in June. um so we continue to expect that that will um uh that will have pressure and we've got that baked into the guidance we do expect long term though that demand will eventually catch up to that new supply relatively quickly um given the mega trends of the move away from plastic packaging to more sustainable packaging so we expect that that will eventually uh that overhang of supply will eventually go away and then continue to support the long-term profitability of our business. So with respect to mix, I think that the primary change there is really the fact that a lot of our high-end customers were and are in the U.S. And it's really principally around lottery, the lottery business. We've lost some share in the lottery business to some European competitors. And that obviously, and then we've replaced that with a lower price business to keep the plant running at capacity. But that was really the primary impact to our mix.

Thanks very much for all that detail.

I will turn it back. Thanks. Next question, Daniel Harriman with Sidoti and Company. Please proceed.

Hey, guys. Good morning, and thank you so much for taking your questions. Just a couple quick ones today, one for Delisle and one for Marcus. Delisle, I know you just went through a bunch of information on CSN paperboard, but looking at the guide for CSN 25 and kind of comparing that to the guide from the 4q24 call um i was kind of hoping you may be able to confirm that you're still able to sell that product into china without any tariff impact currently obviously the the fluff is subject to tariffs but i was curious about the just cs in general and then marcus you yeah oh yeah i'm sorry oh no you can go and then i'll ask my question to marcus so go

ahead while okay dan daniel the nothing has been officially announced with respect to the the tariffs or the tariff impacts on our CS products but we have assumed in our guidance that CS parks will not be exposed to tariffs for the year what we base that on is one our conversations with our customers which are almost day to day and the fact that shipments that were previously paused principally in April have now resumed and that I think is the the most confident indicator that we got that CS demand or CS orders will will resume and get back to back to normal. One of the things I took away and what we take away from this experience is that our products, our products that we sell, our CS products that we sell are absolutely needed. And that has been confirmed with our conversation with our customers. And I think also is confirmed by the fact that the orders have resumed and that at least we're hearing in the background, though not official, that our CS products will be allowed to enter China without tariffs. But again, as I said, that has not been confirmed.

All right. Thank you so much. That's so helpful. And then Marcus, quickly, I know you talked about it, but I just wanted to check in and see how you're feeling about the current liquidity because in this environment, you still seem to be in pretty good shape at 2.9 times, even though that's higher than where you were at the end of 24 with solid cash on the balance sheet. So any color you

could provide would be helpful. Yeah. Good morning, Dan. Thanks for your question. No, I feel good about the liquidity profile of the company. You know, despite the difficult quarter, as you saw and our disclosures at an enterprise level just north of $270 million of liquidity. We manage the business with a view to always keep around $200 million of liquidity around between the ABL and cash. So I feel we're active on all fronts to always manage cash. Our working capital, we're still looking to target a bit of savings there. and between the factoring line in France and our ABL. As you saw, we were not on the ABL at the end of the quarter and we used it just to cover timing issues. So overall, I feel very good about it.

Thanks so much, guys, and best of luck this quarter. Thank you, Daniel.

Once again, if you would like to ask a question, please press star 1 on your telephone keypad. Next question comes from Dimitri Silverstein with Water Tower Research.

please go ahead. Good morning, gentlemen. Thank you for taking my call and my questions. I just wanted to follow up on a couple of things. First of all, you talked about energy costs being up and input costs being up. Now, wood pulp is up. I understand the reasons for that. But what other costs have increased for you and why are your energy costs down? Just looking at the You know, oil market and natural gas market, you know, the prices there seem to have come down since the beginning of the year. So, what's the dynamic driving higher energy costs?

Good morning, Dimitri. To answer the question on energy, it's really specific to Q1. And the very cold weather that hit the southeast of the United States, primarily in January, we actually got four inches of snow in Jessup. during that period, but it was also, we had a little bit of snow here in Jacksonville, Florida, so the weather was exceptionally cold, and it was part of the reason for some of the operational issues we had at Jessup in January, but that shot the cost of energy through the roof. In fact, we got what's called an OFO order that essentially just allowed us to use our hedge on natural gas, and we ended up having to buy natural gas on the spot market in January as a result of the issues with respect to the cold weather. Now, energy prices normalized as we got out of Q1, but the energy impact that we've noted was largely just tied to our experience in Q1. With respect to the other inputs, you noted wood pulp, but I would say that our other major inputs, That would be, you know, caustic and the sulfur family of products that we have, ammonia and other things. Our assumptions and guidance is largely in line with the indices that are out there. And those are higher than 24, and we've maintained that. But we haven't seen any real decrease in those indices in 25 as of yet. So that's kind of where we are with our assumptions.

Understood. That's helpful. Thank you, Delisle. And then a quick question on your TARDIS plan. It seems to be raw material constrained because obviously you're not producing as much cellulose internally. But even with the full production, you were still not operating at full capacity because of raw material constraints. So what are you doing to address getting the biomass into the Tartus plant so you can produce the bioethanol at higher volumes?

Yeah, we're doing a number of things, but the short-term answer to your question with respect to raw material feedstock for the bioethanol plant in Tartas is that we need to run the Tartas plant at a consistently higher level than we did in Q1. So, the good news is that the outage is behind us, equipment has been repaired, and the facility should operate better going forward for the rest of the year. In the medium term, we are continuing to look at using different yeasts, as well as making some operational changes to increase the the the sugars that are more more readily formidable to to bioethanol for example monomers and those efforts continue and we expect that we'll see a pop in feedstock availability or call it more of a improvement in yield for the for the from the feedstock come August in September of this year, and then as we get into 26, we'll be looking at another pop as we change some of the operations in TARDIS, in the cellulose plant to, again, provide us a feedstock that will actually give us a better yield. And then we are spending some capital to allow us to We use GMO yeast at our facility in TARDIS, which, again, will give us a pop in yield in 26-27. So this is obviously an area we've got a lot of focus on. The margins on this business is fantastic. We want to make as much ethanol as we possibly can. so we are we are going to spend a little bit of capital to make that happen and then with respect to the Tartas facility we believe that the problems that we had in Q1 are largely now behind us. And Demetri, the comments that Delisle

shared on the cellulose production at Tartas, that impacts both the sugar stream and the lignin stream, right? So we're making good economics on powder and liquid

lignin as well. Thank you, Nicky. That's helpful as well. And then you touched on that in answer to the previous question, but what's going on with the Fernadena plant and expansion there for Biathinol? I know the city is putting up some roadblocks. So where do we stand there and how confident you are that you'll be able to get the permits that you need and get that plant built in the near future.

We remain confident that we'll eventually prevail. It's a very promising project for RIAM. We also believe it provides huge benefits to the community as well as to the world in large in that it reduces emissions and it provides another source of renewable energy for the country as well as the world generally. So we believe that we are well positioned and believe that the business is something that would be beneficial for all stakeholders. With respect to the illegal actions we've taken, not much I can comment to because it's an open litigation and just say that we still believe strongly in our position.

Okay. I'll take the rest offline. Thank you. That's all the questions I have.

Thank you. I will now turn the floor over to D. Lyle for closing remarks.

All right. Well, thank you again today for your time and for your continued interest in RYAM. We acknowledge the challenging start we've had this year and the ongoing uncertainties that we're seeing in the global market. But despite these near-term headwinds, I remain confident in the resilience of our core business and our ability to effectively navigate these challenges. And also want to just reemphasize our ongoing commitment to our long-term strategy. Our focus remains clear. We need to actively mitigate the tariff impacts. We need to optimize our assets and advance our high-return biomaterial investments while maintaining disciplined financial management to drive sustained long-term value. We greatly appreciate your ongoing support and engagement during this period,

and as always, we remain committed to transparency and open communication.

So please do not hesitate to reach out with any further questions if you require additional information.

Thank you for joining us today, and have a great day.