Packaging Corporation of America (PKG) Earnings Call Transcript & Summary

Good morning, everybody. Welcome back to day 2. The Global Ag and Materials Conference. We're delighted you're here. As always, and we are honored by all the companies and speakers who participate in our conference and all of our clients. So welcome again. We are particularly delighted to be welcoming back Packaging Corp. to be presenting at the conference today. It will be a fireside chat. Here today from the company, are Mark Kowlzan, Chief Executive Officer; Chief Financial Officer, Bob Mundy, and Senior Vice President, Ray Shirley, from PCA. Now Ray Shirley has been with the company, I think, over 20 years, true Ray, is Senior VP of Technology and Engineering; Bob Mundy, who we all know, is Chief Financial Officer. He's been with the company since 2015, previously having been at Verso. And Mark Kowlzan is Chairman and CEO and has been Chairman for the company since 2016 and Chief Executive Officer and Director since 2010 and Packaging Corp is one of the very few companies in our sector that has kept up with or outperformed the S&P 500 over this period of time. So congratulations to all of you for what you've done over time. Bigger picture, maybe Mark, to start, we've gone through an interesting period. How about that in terms of containerboard, do you have some slides that you wanted to talk to?

I'm just going to stand here and we're going to talk, and then I'll sit back then because we're going to get right into questions, but I'm going to give you some updates.

Please do. Okay.

And again, I presume someone must know who we are, so I'm not going to put a big deck on it and go over the boring history of the company. But if you have a question, by all means, ask the question. But I want to start out this morning and thank everyone for taking the time to be with us. Really appreciate it. And then we'll get right into some updates that we believe will be very important to you. As you recall, if you paid attention to our earnings call at the end of January, our volume was up significantly for the fourth quarter. And the first month of the new quarter, we called out a number about 10% up on volume. And here we are finishing up 2 months in the first quarter, and our bookings are up over 13% and our billings are up a solid 10% on box plant cut up. So things haven't slowed down for us. Things have actually picked up stronger in the first quarter. And so we wanted to make sure everybody understood that, that this is a significant turnaround. We started seeing this last -- late last third quarter, and then it took off like a rocket in the fourth quarter. And across the board, our volume is strong nationwide. Along with that, our Paper sales, volume has picked up dramatically on the Paper side of the business. And if you think about our Paper side, most of it is cut size, reprographic type paper, but we do make a fair amount of printing and converting grades offset type paper. And the order book is full. We're running the International Falls mill as hard as we can to meet orders, and we're turning orders away. And so along those lines, effective this morning, we've begun notifying customers of $100 price increase on all our uncoated freesheet grades. And so customers are being notified of that as we speak this morning. And so things are very strong. Things are good and everything we talked about on the earnings call just continues to get better. And with that, I'd like to just open it up for questions and George, and we'll just have a discussion. Again, I apologize if there are people here who don't understand the history of the company, please ask that question and we can give you the rundown on who we are and how we've gotten to be what we are. But thank you.

Thanks, Mark. So Mark, why don't you take that seat then? Any questions from the audience to start? I guess maybe from my vantage point, so billings up 13%, bookings up 10%.

Bookings are up 13% and the billings, the actual boxes that we make and the invoices that we're sending out are up 10%. So the order book and the order activity is strong and the customers are busy.

Is there any particular takeaway from where trends are most active. I know it's across the board, but are any markets that are particularly robust? And what does it tell you -- we read about the consumer still being pinched. We read about demand trends, frankly, for a lot of our other companies coming out of fourth quarter reporting, first quarter was going to be an inflection point. This is broader than corrugated. Flattish, maybe a pickup in the second half of the year, what are the implications that your customers are seeing this strength and have been seeing this strength for a couple of quarters now, what it means for the rest of the economy, do you think, Mark?

We see this daily. There's some segment of the economy that's struggling a little bit. We saw this through 2022 into 2023 where, quite frankly, we've got, say, 15,000 customers in the United States. Different segments were down. Auto industry had a tough time for a period just getting chips in various parts, homebuilding were struggling for the same reason. Things stabilized. And even though interest rates are up and new home construction may have slowed down, things have kind of leveled out and so there's a constancy in the demand across the board. All of our ag business, food business is very stable. And so nationwide, coast to coast from the Gulf Coast, Pacific, Atlantic Midwest, we're seeing strong demand on all of our customer base, whether it's a food-related product, an ag product right off the farm or manufactured goods, whether it's auto, home, and so it's just very stable and very strong, which actually bodes well for us. But it's -- and I'll make this point, we wouldn't be able to satisfy the kind of numbers I just talked about with an order book that's up 13% and the billings going on at 10%, if we hadn't have done what we've done over the last number of years. And back in 2019, we reorganized our entire corporation as far as how we took care of business day to day. That's why I brought Ray with us today. Ray is our Senior Vice President of Technology and Engineering. And for many, many years, we had an organization that it was the box plant side of the business, the mill side of the business. And I came from the mill side of the business decades and decades and decades ago. But we built up this incredible talent base, and that's what took care of our mill system. As we wound down some of these reconfiguration projects, we had 150 of these engineers, technology specialists that had a lot more time to do things. And we realized we had the need on the box plant side of the business to bring that technology and capability to bear. So Ray assumed a new role in 2019. And so we formed an umbrella technology in the engineering organization. So it's just one organization now that takes care of everything in the company, which has been incredibly effective for us. And so it has shortened our time, bob and I in terms of how we handle capital discussions at the plant level through Ray. We have a real-time every day, 7 days a week, discussion going on, what's happened in the last 24 hours, who's doing what, where Ray's deploying if someone needs help if there's an issue. We have people on the ground very quickly. We have people taking care of all these matters. But during these 6 years, we've recapitalized a massive amount of the box plant side of the business because we had that capability. If you include 2024 as the sixth year, we will have gone through primarily the entire box plant system. There's a few that we haven't gotten to yet. But for the most part, we've recapitalized and retooled our box plant system. We've got 63 new converting lines, think about that, 63 new converting lines put in, but 1 new converting line probably took out 2 or 3 old converting lines that were inefficient and very labor intensive. We reconfigured all of the work in process flows through these plants, automated, robotized and turn these plants into some very, very efficient box plant systems. I'm looking at the audience, and some of you wouldn't understand this, but 25 years ago, 30 years ago, people used to laugh at PCA because we had old sheet plants we had. We probably had the largest number of sheet plants. Those are plants that don't have a corrugator. They buy sheets or they get sheets from a sister plant that has a corrugator. But we had a lot of old inefficient sheet plant operations. And to give you an idea, they might make -- produce on an annual basis, 250,000, 300,000 square feet of boxes a year, whereas a big full-line modern plant will produce 2.5 billion square feet a year today. What we've done in the 6-year period of time, all of this investment we've made has taken a sheet plant that went from 300,000 square feet to 1.5 million square feet. And so you're getting some big numbers out of these plants and productivity, unit labor hour cost dramatic improvements. We're probably more -- 30%, 35% more efficient today on a unit labor hour basis than we were 4, 5, 6 years ago. So all these things that we've been doing allow us to generate the kind of numbers we generate, but it also allows us to grow with the customer base and stay up with this volume growth.

When you got the sheet plants that ways, you got to make sure, you have the paper as well. So you've been doing an amazing job on that front, too. When you think about -- well, let's come back to one thing you said. You said you're in constant conversations. So does that engineering group meet regularly on a like weekly basis?

This is an everyday -- raise on the phone every day with everybody in the box plant system. And all from the box plant level up through Ray in his organization, everyone is talking, everyone's communicating in real time. I'm being communicated with in real time every day, especially on the Nova side of the system. I received a call every morning bright and early, 7 days a week, holidays included. And I get up at 4 in the morning. I'm already looking at the data, looking at what's been happening and by the time call start coming into me, I know what to ask, Where issues are. And that's why we're able to respond so quickly. Even on the capital side of things in real time, Bob and I talk on a daily basis. And we'll just chat about this is what I heard, what's going on here and somebody's got a great idea here. So you'll probably be seeing this coming along, but we can get ahead of these opportunities and that all of the assumptions, that all of the thought process, and we keep all of our group unencumbered and just driving forward with these opportunities. We have no -- when you think about the layers of management and the bureaucracy, there is none. It's us. And we're talking in real time. As many of you know, Tom Hassfurther who runs the packaging side of the business for me, he and Ray are talking on a daily basis. I'm talking with Tom. We -- no matter where we are, we're linked in and talking in real time, but we don't have committees. We're the committee. We're the committee. It's a phone call away, a decision can be made. I have to believe that that's one of the reasons that we are so able to do what we do. And so it's -- but to that point, if we had -- and over these 6 years, we -- if you include the spending that we will finish up this year, we will have spent $1.5 billion in the box plant side of the business, retooling these box plants. But we have now -- oh, this is another fact. You'll appreciate this because many people don't think about this. During this period of time, we've shut 10 plants down. So we built -- if you include the new plant we're starting up in Salt Lake City next month, we will build 4 brand-new state-of-the-art full-line plants. We've shut 10 plants down that really needed to be shut down. They were ancient artifacts. And so we've gone about this holistically. And so you end up with the capability to go to market in a very efficient low-cost fashion, you can service your customer base, and that's the other thing that we can do with it. And you heard Paul Stecko said this years ago, the former CEO and Chairman, this goes back 20 years ago, we do the hard-to-do things. We do things for our customers that our competitors don't want to do or do not have the capability of doing. And so again, within a region, we'll have the big anchor full line corrugating plants surrounded by some of the smaller sheet plant operations, but the sheet plant operations now are incredibly productive and they support one another. And so your plant and your plant and your plant, we're all working in cooperation with one another servicing this customer base with whatever they need. And so we'll do whatever they need, they're going to pay for it, though. And that's one of the reasons our margins are as good as they are.

Mark, how many box plants did you say you opened?

We shut down 10 and with the 4, we've got started up, I think we're 86 now.

And did you do anything on the sheet feeder side given what you're doing on the sheet side?

Well, again, within these plants, the -- we only have 1 big sheet feeder done in Texas, and that supplies a lot of the market in the Texas region over into the Mexico side of the border. But we've purposely not gotten into the sheet feeder business.

And switching gears and I'll turn it over to the audience for a bit. The uncoated freesheet price hike that came out, what kind of demand are you seeing right now if you think about year-on-year? That do not came out of nowhere.

No. I mean through 2022 into 2023 last year, we saw things slowing down on our -- especially on the printing and converting grades, offset-type printing grades, things are slowing down. Our cut-size, reprographic grades slowed down somewhat -- but it also allowed us to really realign all of the logistics side of that business and how we go to market, where we distribute the organization. So we are able to take cost out there. But during the fourth quarter and into now the 2 months of the new year, we're back to running the I Falls' mill full out. But again, it's -- we're in a real good position and this is across the board on printing, converting grades and in the reprographic cut size.

One last last question, Mark. So if you look back -- if you look at your volume right now, in box shipments, where are you relative to where you were in 2019? Have you recovered beyond where you were prior to COVID?

Yes. We are significantly ahead of 2019. We are almost -- the peak was 2021, into 2022 things started slowing down. But we're -- if we're, we're just a few percentage points below the all-time peak volume in 2021. That's when we had numbers, we were up 15% over 2018, 2019 type numbers. And so we recovered to within a few percent of the all-time peak volume. But again, our system is so much more capable of producing much more efficiently at lower cost. The mills, obviously, we've done a lot of work in the mill system. We've reconfigured DeRidder, Wallula. We're just finishing up the Jackson mill. Jackson, Alabama is finishing up as we speak through its 58-day outage, the second phase of the total reconfiguration of that operation. And so it's -- again, it's raised organization and Jack Carter, who runs the mill side of the business. Again, we have a unique group of people. Many of us in the operating side are chemical engineers. Some of us have a Master's level engineering and MBAs. So we understand how to make the products and also drive the profitability. There's no other company that has the capability that we have. I know I want to make also about currently what's happening in the space. When you think about what we read in some of the news about OCC and what that's doing to the makeup of the business. In the last 3, 4, 5 years now, and we'll just round it off. There's about 2.5 million tons of new capacity that came on over the last few years. At the same time, mill capacity was taken out. Some of our bigger competitors announced shutdowns. They took -- the capacity that came out was fully integrated craft-type production. So what replaced net-net was 100% OCC-based recycled demand. So again, you've heard of Paul Stecko anybody who's been around PCA's space for a long time. We always wanted to remain flexible with our fiber flexibility. We never wanted to be so far into recycle or so far into the kraft, but we could flex either the way and take advantage of the marketplace. And we have that capability. But if you're 100% beholden to OCC or DLK, you got a big problem right now. OCC is up 200% in the last 12 months, while prices for product are down. So if you think about that kind of squeeze where a producer making containerboard that's facing prices, especially if you're producing a medium -- recycled medium on the pricing side, you're down $170 a ton where OCC is up 200%. That's a tough squeeze to be in. So every day, I wake up and I root for higher OCC prices and that's good for us.

So it's your fault then, Mark, basically what we're seeing here right now?

We position ourselves in the marketplace and we do it with flexibility in mind.

Thanks, Mark. Any questions from the audience? Mark, let's talk about the mill system. Historically, Packaging Corp. was viewed to be incorrectly, correctly viewed as more of a heavyweight system. Talk about what -- if you grew that premise, talk about what some of the changes that you've made at Wallula and DeRidder at Jackson now mean for that, number one. Number two, as you were touching on recycled fiber versus virgin, can you update us on what your mix is right now when you're done with Jackson?

The mix, we're probably about 20% recycle. And -- but again, we could push that up probably 25% but we could go to 0 if we had to, but there's a sweet spot in there even though with prices up for OCC, 200%, we have a need to balance out our portfolio. We'd probably go down to 12%, 15% if prices got so high, we could supplement that with kraft fiber in most cases. But we're in a place where we don't want to have much more OCC, but we're good because we spent the money in all these reconfigurations, DeRidder will look the big new OCC plants. So we take advantage of the Pacific Northwest, the Gulf Coast region; Jackson, Alabama, we just finished the big OCC operation filled out there last year. So we balance that off with kraft fiber and recycle within these big mills.

Did you put more OCC, I forgot in Jackson as well?

Yes.

Okay.

And then the other question, the other part of the question was...

I mean historically you're more...

If you went back 20 years, not just PCA, but a lot of the industry was heavyweight. Over the last decade, we've significantly shifted to the lighter weight, high-performance grade mix. And in these last half dozen years, primarily we've developed our own proprietary grades of we call it an SP grade. It's a special performance, special purpose type of grade. It's actually a lighter weight than most of the advertised grades you see, but it offers the same performance capability, but we primarily shifted all of our box system into these lighter weight grades. If someone was thinking about 35-pound high-ring as a liner and then 23 pound medium -- as the medium portion. Most of our boxes are done in this category, but we're actually lighter because we don't sell this SP grade out to the marketplace. We only use it in our box plant system that's going into our customer boxes. And so -- but because we're over 90% integrated, most of our production flows through our own system anyway. But we are now primarily a lightweight system. But you can be a lightweight, high-performance system if you do it efficiently. And so we're lightweight, high-performance craft based primarily that's why we have mills that if I took you into one of our mills and you'd go, well, isn't this mill a 60-year-old mill because you'd be looking at a mill and you think it was brand new. I mean in the last 15 years, we probably spend $3.5 billion in the mills with all these reconfigurations and all of the projects, but that's what allows us to run as efficiently and effectively as we do. We have some of the lowest cost mill assets in the world because we know how to take care of them, we know how to operate them. That's our expertise. If you think about -- you've heard me say this before when we did more of these type of events, but PCA has something unique. We have an incredible technology talent, a manufacturing talent and a capability unlike anyone else. And we also have the marketing sales prowess unlike any of our competitors. So how we go to market and how we operate is unsurpassed. And that's the unique talent base that the management team brings to there.

So Mark, you said your average basis weight now on liner is below 35-pound would you say, running through year?

Yes. It's in that -- but if you think about a decade ago, we were up in the 40 -- 52 pound because 56 pounds, then it went to 52 pound as the heavier weight; 25 years ago, 69 pound, dropping to 56 pounds, then to 52 pound, 42 pound went away, 35 pound took that place. But now we've gone below that with the high-performance special SP grades.

Understand.

That's why, again, we get these efficiencies that we're not wasting fiber, George.

What about the smaller mills like Filer City and Tomahawk? Are there any other projects that need to be done around the mill system? We've talked about DeRidder and so on in the last 10 years.

Filer City machine is a good example. And one of the machines of Tomahawk, Wisconsin -- these are 100-year old -- Filer city is a 100-year-old mill. But if I -- again, if I took you there, you think it was a brand-new mill built in the last 10 years. I've been with PCA for 28 years now, and for 28 years, as all we've done was continually make improvements in investments. And it's not just a big flashy new paper machine or a box plant putting in a big new corrugator, we go into these projects, and we're looking holistically at all the infrastructure. Again, we're all engineers. We're looking at the power infrastructure, all of the things that you would normally think about. It's no different than your home. If you have an old home and your heating systems, your air conditioning systems. If you haven't upgraded them in the last 30 years, they're probably pretty inefficient and the dollars are flowing out the door. And if your windows are not well sealed. So we look at all of this holistically. It's almost like saying every unit of fiber that comes in the mill, every gallon or pound of chemical that comes in the mill, how do you convert that in the most efficient manner, all of your units of fuel, natural gas, whatever you're using for fuel, black liquor that we burn, are you converting these units of energy in the most efficient manner and then making the end product in the most efficient manner. We have that capability. That's how we think, that's how I think every day. That's all the people around me. Bob is the only CFO in the industry that knows how to run a mill in a box plant. He grew up in the industry. And we are a unique bunch. And if you have a notice, I actually enjoy doing what I do. And I go to bed thinking about these things, that I wake up at 4 in the morning, by 6, I've had a pot of coffee, but my brain is wheeling on all these opportunities. And he's laughing because he's been with me for 28 years. And so apparently he is still having fun too.

Two questions come to mind. One, on the project side, Ray, Mark, Bob, don't you run out of things. Isn't there a horizon where at some point, you look at everything holistically from the box plants to the machines, to the winders, to the press section, to the dryers and there's nothing left and the answer is probably no, okay? But I know you're going to say that, but if you can give us a reason why you continue to find that and what the productivity improving, what the -- over a 5-year period, what you think you can add to the business in dollar terms and profit can come from those continued projects, number one. Number two, I know you're probably sick of this question, I'll try anyway again. The rest of the industry is not growing at the rate that PCA is saying it's growing. So do you think you're just tip of the spear here? Or is it just your unique capabilities are allowing it?

Bring in some history to bear here. If you went back to the year 2000, we became a new public company in the year 2000. We were part of the Tenneco conglomerate.

I was there.

Exactly. And so when we went out as [ NewCo ] Packaging Corporation of America, there were a lot of opportunities that we could take advantage of. One of the things that was occurring at the time was the consolidation in the industry. And so you had -- if you went back 30 years ago, there were probably 28 companies in this space, making corrugated products. I mean bigger companies and now there's a half dozen of us. So what was happening during this consolidation in the 2000s in that period of time from the late 1990s into the 2000s is consolidation in the industry took place, we were the benefactors. As customers were looking at the landscape and wondering what was going to happen, we ended up capturing a lot of that business through those decades. The other factor and people don't realize this. I've been running the company now going on 15 years. We've made 22 acquisitions. People don't think about PCA as an acquirer. We've made 22 acquisitions. Boise is the biggest, which -- and its Boise is the most successful acquisition in the history of the industry. But we made 21 other smaller acquisitions that are equally successful. We bolt them on. A lot of them we pay with cash on hand. We don't borrow money, very prudent on how we do that. But we have outgrown the industry and you used to see these numbers, George, every year, I'm looking at [indiscernible] over there, who would show you the numbers every time we met with you on our volume growth compared to the industry. And for the better part of 15 years, our numbers were on a slope that we're like 100% growth over that period of time and the industry was flat. For a better part of a decade, the industry number was negative growth, and we were in that industry number, but we were still up in an incredible trajectory. I mean, today, if you look at where we are right now today over that period of time from about 2,000, so a 24-year history, we're up probably 130%, 140%, while the industry is basically flat. We've also seen times because someone would say, yes, your volume went down pretty dramatically last year. We've seen that happen before during the economic crisis in 2008, 2009. Our volume fell off faster during those -- that late summer fall period of 2008, our volume came to a halt very quickly. But by springtime in 2009, and I remember it because it was my birthday, March 10, 2009, the market took off, and we saw the volume in April just taking off like a rocket. And it was the same thing, then we outpaced the industry again for many, many years. And so we've seen this downturn last year where we dropped quickly but now we seem to be coming back much more quickly. We have much more capability than anybody in the industry to take advantage of that. And all of that opportunity flows to the bottom line. And so I think part of what happens in our marketplace, dealing with more local account business, which, by the way, we -- even though someone would think we were dealing with a lot of small local account business, these local accounts have grown pretty dramatically in the last decade, the last 20 years. So now they're not just local accounts, they're regional accounts and some of them have grown up into national accounts. But we've been together all these years. We take care of their box needs. They know they can depend on us.

It is 70% of your mix, Mark.

It's still in that, that 2/3, 70% is what everyone thought of as the local account, but these local accounts have grown dramatically. That's where our volume has gone. So it's not just the small mom-and-pop local account down the street. It's the entrepreneurial group, the entrepreneurial family that has grown that business over the last decade or two, and we've grown with them. But some of the dynamics taking place in the marketplace now. I'm looking forward to that. We will be the beneficiaries of that. We're tooled up and we have the capability in our mills and box plants to grow. We have the organization that can grow. The customers know that. And I'm pretty bullish on how we're moving forward and where we're going.

I know you must get this question a lot. I'll raise it here as well. A number of the other corrugated companies, well respected, a lot of history have said in the market and one of the remaining companies have said they also want to now pursue more of a value over volume has been the phrase strategy. How do you think that affects Packaging Corp and its model, if at all, over time recognizing they don't just show up and do it. You have been doing it for 3 decades.

Easy to say that, but many of them don't even know what that means. I'll throw one out to you. In the last 15 years, one of the things that we -- this came from the Boise acquisition. Boise had a transportation organization in their company, trucks, tractor trailers, truck drivers, we had sold our business back in the 1990s. We had a small trucking operation up in Michigan. We -- much of the industry and the world around has got rid of their trucking fleets and just went out to the market and let private carriers handle their products. Boise had a very efficient trucking organization and a railroad. We actually own a railroad up in Minnesota. And I sat down and I was -- my inclination was get rid of this. It's overhead. We don't need it. And the more I started looking at it, think about we could take advantage of this. These acquisitions we are making, these smaller businesses around the country, they have trucking operations. They have their own employees. They had their tractors and their trailers. And I started thinking about this, we could -- we have the foundation of a nationwide capability here that no one else in the industry had. And so over the last 15 years, we've invested in that trucking organization. We put a lot of capital into tractors, trailers, hiring drivers and enhancing that capability nationwide now. So any given day in the country, we probably have 500 trucks running around the country, 1,000 trucks running around the country, PCA trucks and drivers, bringing boxes to customers. And so we have that capability. And we also still -- when you talk about people wanting to get into a value mode, we'll do partial truckload orders. We'll do again the hard-to-do deliveries. A customer calls us up this afternoon and says, "I got a problem. I got to have boxes tomorrow morning." We'll get them their boxes. Again, they're going to pay the price for them, we'll get them their boxes. If we have a problem at a plant, someone, I think anybody that's followed the space during the last 4 or 5 years, during some of the winter weather events, some of the calamities that occurred with cold weather, some companies were explaining that they weren't able to satisfy customers because of the weather issues. The plant was frozen. The plant was down. Within any given region, within any part of the country, I could have a plant down over here, but we've got 3 other plants that can take care of what that plant does to make sure a customer never runs out of their boxes. And so we have that capability. But part of that capability is that the plant management, the regional management thinks as one unit, that it's not me, it's not you, it's us together, how do I help you? How do I help you? How do you help me? And we're -- because at the end of the day, we look at this at the end of the quarter, it's the number we generated, not look at my plant and what I did. Everyone knows they're all in this together. They all are sharing the benefit together. And so it behooves everyone who work as 1 unit and help 1 another, take care of these customers. we'll have inquiries from our sales. We still have the largest number of salespeople, boots on the ground in the nation. We're the third largest player in the space, and we've got more salespeople than our 2 largest competitors do. Our salespeople will have an inquiry. They'll talk amongst themselves, they'll talk to the plant management. Someone will say, "You know what, I've got some time on my converting line over here and I can make that box for you and we can do it profitably. Let's take that business." And so that is constantly going on. That doesn't happen at our competitors.

Mark, we're having this conversation, I don't know, 3 years from now, what will we find from Packaging Corp.? How will it look differently? What will it look like from a financial standpoint, if you can comment at all? -- or -- and if not, there conceptually 3 years from now, what are you saying?

Well, all right. When I came here 28 years ago, we were producing about 1.5 million tons of containerboard. Now we're pushing 5 million tons. We finished up with Jackson. We're going to have 5.3 million, 5.4 million tons of containerboard capacity. We've got an incredibly efficient fleet of box plants that we're making better all the time. We're looking at acquisition opportunities. I remember when I told some of you and I'm looking at Jim over there, and I said the stock would be at $100 a share, and then it would be $150 a share, then it would be pushing $200 a share. I think we're starting to get towards that $200 a share level. Well, I started using a term in the last year, it's 3 for 3. -- within 3 years, it will be at $300. And so we just -- the economy has to cooperate. We have to have a customer, but we know how to take advantage of the marketplace and grow with the customer base, very profitable growth and do it very effectively. And so I would expect if the economy continues to do what it needs to do, we will continue to deliver the kind of results we delivered over the last 2 decades, and that means an upward slope of earnings and share price.

Thanks, Mark. We look forward to marking the progress, Ray. Mark, thank you very much, everybody. Please join me in thanking Packaging Corp. for a terrific presentation.