Please ensure Javascript is enabled for purposes of website accessibility

Graphic Packaging Holding Co (GPK) Q1 2021 Earnings Call Transcript

By Motley Fool Transcribers - Apr 27, 2021 at 10:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

GPK earnings call for the period ending March 31, 2021.

Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Graphic Packaging Holding Co (GPK 4.29%)
Q1 2021 Earnings Call
Apr 27, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to the Graphic Packaging First Quarter 2021 Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Melanie Skijus, Vice President, Investor Relations. Please go ahead.

Melanie Skijus -- Vice President of Investor Relations

Good morning, and welcome to Graphic Packaging Holding Company's Conference Call to discuss our first quarter 2021 results. Speaking on the call will be Mike Doss, the company's President and CEO; and Steve Scherger, Executive Vice President and CFO. To help you follow along with today's call, we will be referencing our first quarter earnings presentation, which can be accessed through the webcast, via self-directed slides, and also on the Investors section of our website at www.graphicpkg.com. I would like to remind everyone that statements of our expectations, plans, estimates and beliefs regarding future performance and events constitute forward-looking statements. Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from the company's present expectation. Information regarding these risks and uncertainties is contained in the company's periodic filings with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements as such statements speak only as of the date on which they are made, and the company undertakes no obligation to update such statements, except as required by law.

Mike, I'll now turn the call over to you.

Michael P. Doss -- President and Chief Executive Officer

Thank you, Melanie. Good morning to everyone joining us on the call and webcast today. I'm pleased to report a solid start to 2021 in what can be described as a truly unique operating environment. We continue to deliver organic sales growth, capturing new real opportunities in growing markets with our innovative fiber-based packaging solutions. Global adoption of paperboard multipacks and KeelClip packaging solutions through beverages Paperboard trades, including our new PaperSeal and ProducePack lines for food packaging and Integra fluids, a ship and own container package for omnichannel commerce, all are examples of products that are driving our results. We remain encouraged by the traction we are seeing from our innovative packaging solutions with existing and new customers in growing markets around the world. Aligned with Vision 2025 and supported by our history of successful acquisitions, we are announcing today our intent to acquire Americraft Carton.

The proposed transaction will provide benefits to our customers, employees and stakeholders. I will provide additional details on this development shortly. Turning to Slide three. Let me update you on a high-level financial and operational highlights for the quarter. Growth continued in the first quarter of 2021, with net organic sales increasing 2% year-over-year. Notably, this follows a very strong first quarter of 2020, where net organic sales growth was 7%. Over the last 12 months, we've exceeded our targets, delivering 3% net organic sales growth. Stronger than forecasted sales growth is the result of ongoing conversions to more sustainable fiber-based packaging options across our food, beverage, foodservice and consumer goods markets. In addition, our business has benefited from increased at-home consumption. Importantly, we continue to have confidence in our 100 to 200 basis points goal for annual net organic sales growth established with Vision 2025. Achieving consistent year-over-year organic sales growth is supported by the strengthening global trend to more sustainable packaging alternatives. As we look out specifically at the year to the anticipated volume from our innovation pipeline, coupled with return to growth in foodservice, we expect 2021 net organic sales growth will be at the high end of our 100 to 200 basis point range. Adjusted EBITDA in the quarter of $240 million met our expectations before the $29 million of costs we incurred associated with winter storm Uri.

During the quarter, we did see a return of inflation across some of our commodity input cost categories such as logistics, recycled fibers, resins and chemicals. We are executing multiple price initiatives with our customers to fully recover the current inflationary environment. Our commitment to price offsetting commodity input costs remains the pillar of our overall value creation model for stakeholders. Also during the quarter, we made further progress on the Vision 2025 goal of achieving 80% to 90% paperboard integration across our consolidated business. We exited the first quarter of 2021 at 71%, improving from 70% in the full year of 2020 and 68% in 2019. We expect to benefit from a meaningful increase in our paperboard integration rate as we start up the new CRB paperboard machine in Kalamazoo later this year while winding down a portion of the existing supply agreements. In addition, we will drive paperboard integration rate higher as we grow our converting volumes both organically and through acquisitions. Our partnership with International Paper continue to wind down during the quarter as we acquired another $400 million of minority partnership interest, reducing their interest to 7% from the initial 21% held at the inception of the partnership. In addition, work on our CRB platform consolidation project in Kalamazoo continues ahead of schedule, with the new K2 machine set to begin paperboard production in the fourth quarter. Planning related to our more recently announced investment in Texarkana to convert an existing SBS machine to its full capacity capable of also producing CUK is tracking on time and on budget.

This represents a very efficient path to meet increased global demand for CUK and further advances our efforts to closely match supply with areas of strengthening demand. Continuing the capital allocation discussion, let's move to Slide four, where I will provide an overview of our intent to acquire Americraft Carton. We have entered into an agreement to acquire Americraft Carton for approximately $280 million. The company is one of the largest remaining independent converters in North America, with over $200 million in annual sales, operating seven well-capitalized and high-quality converting facilities. The company has a great reputation with customers, has been in business for over 100 years and generates approximately $30 million of annual EBITDA. We see 300 basis points of paperboard integration opportunity across all three substrates and expect an additional $10 million of synergies over 24 months following the close. The transaction is expected to close in the next few months. Turning now to Slide five and a discussion of innovation and new product development. I will focus my comments this morning on projects and work under way in our plastics substitution growth platform, one of three growth markets we are targeting, with a $7.5 billion total addressable market opportunity. We have discussed with you in past calls the significant ongoing conversions to paperboard solutions we are seeing in our beverage and foodservice markets. An additional area of expansion for us is into food categories around the printer of the grocery store. We have targeted and are seeing success in new categories as we align our global innovation resources and have established frameworks to execute on the biggest opportunities.

On Slide six, I will provide details on our PaperSeal innovation. With the launch of the PaperSeal in 2020, we targeted a $1 billion addressable market opportunity to replace foam trays and shrink wrap alternatives commonly found in the grocery store meat departments around the world. Our PaperSeal packaging innovation offers producers and retailers significantly increased food trade recyclability as well as enhanced branding opportunities. We have seen traction in Europe, in Australia with the list of retailers, including Aldi, Esda, ECA, Little, Marks & Spencer and Woolworths adopting our packaging for meats and poultry products. We have tests under way in North America and are on track to be commercial in the region in 2021. Building on early momentum on PaperSeal, we are executing a product expansion with the launch of PaperSeal Slice and PaperSeal Wedge. The recyclable barrier line paper packaging format now offers the same ease of use and sustainability benefits for sliced deli meats and cheese categories. The packaging insures hygienic and shelf-life characteristics that match existing packaging alternatives. The design allows for enhanced branding and meets the requirements for high-speed food manufacturing lines.

Turning to Slide seven. We are also targeting and expanding in another category found at the perimeter of the store, produce. With our ProducePack line, we are offering a variety of fully sustainable shelf-ready solutions for protecting and preserving fresh fruit and vegetables. ProducePack offers significant branding advantages in an eco-friendly container versus existing alternatives. The leading Michigan apple distributor, bell harvest, recently switched to ProducePack for its Fuji, Honeycrisp and Gala Apples in response to consumer preference for fiber-based packaging. With the launch of our new Punnet tray line, we are extending our offerings to new categories like berries and snacking size vegetables. Our global marketing, sales and innovation and sustainability team members are working clearly that are focused on winning in today's market. Sustainability is a key part of every new product development discussion and is central to our go-to-market strategies. We are engaging with external stakeholders to learn more about consumer preferences, product direction and the evolving needs in the market places we move to more environmentally, conscious society. Providing packaging enhancements for consumers that include 100% recyclability and reduced carbon footprint will be the key to our new product development road map moving forward. Let me conclude on Slide eight, revisiting my comments made at the end of what was an incredible year 2020. We are creating value to leadership with our Vision 2025. Simply put, we are running a different race. The investments we have made to advance our capabilities, engage employees and optimize our mills and converting infrastructure differentiate us.

We are leaders in sustainability because we've built our business on it. Our packaging solutions are made primarily from renewable wood fiber from sustainably managed wood baskets in the United States, and the vast majority of our fiber-based packaging can be recycled today. As a result of prudent capital management and strong cash flow generation, we have invested back into the business and has continued to enhance our service offering to meet global demand and customer preferences, delivering on new product development opportunities with customers and achieving our sustainability-supported growth goals with the proposed acquisition of Americraft, we are positioned to further strengthen our growth outlook, adding customers, adding markets while driving greater paperboard integration. We are confident in the pipeline in front of us to achieve a 100 to 200 basis of annual net organic sales growth and expect to be at the high end of that range in 2021. Our ability to help customers reduce their environmental impact and elevate their brands through continued innovation and improvements in packaging is expanding opportunities in drive growth.

Steve, I'll now turn it over to you.

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Thanks, Mike, and good morning. Moving to Slide nine, focused on key financial highlights in the first quarter of 2021. Net sales increased 3% from the prior year to $1.65 billion, driven by 2% net organic sales growth and positions. Adjusted EBITDA declined from the prior year quarter, primarily related to $29 million in costs associated with winter storm Uri and maintenance downtime. As a result, adjusted earnings per share were $0.23 as compared to $0.31 in the first quarter of 2020. Total liquidity remained significant at $1.44 billion. Additional financial and market detail can be found on Slide 10. Solid sales performance was driven by continued strength food, beverage and consumer markets, where sales before acquisitions increased 5%. Partially offsetting this performance was our foodservice business, where sales declined 10% versus the prior year period. Importantly, foodservice sales improved to flat performance year-over-year in the month of March and are inflecting positive for month-to-date April versus the prior year. This is encouraging and largely as expected, as we see a return to more away-from-home consumption, as vaccinations are rolled out and as we anniversary the beginning of the COVID-19 pandemic.

On Slides 11 and 12, you'll see our year-over-year revenue and EBITDA waterfall. Net sales increased $50 million in the first quarter of 2021, driven by $33 million of improved volume mix, resulting from a combination of 2% organic sales growth and acquisitions, partially offset by fewer selling days when compared to leap year observed in the prior year quarter as well as $20 million of favorable foreign exchange. Adjusted EBITDA decreased $55 million to $240 million in the first quarter of 2021. Adjusted EBITDA benefited from $21 million in improved net productivity and $5 million from favorable foreign exchange. EBITDA was unfavorably impacted by $3 million of pricing, $2 million of unfavorable volume mix, $34 million of commodity input cost inflation, $13 million of other inflation and $29 million of costs related to winter storm Uri. Excluding storm-related costs, adjusted EBITDA was $269 million, consistent with our expectations. As Mike mentioned in his remarks, we experienced higher inflation across certain commodity categories during the first quarter, and we are successfully executing multiple price initiatives to offset inflation. Back on Slide nine, you will see that industry operating rates remained strong and backlogs are quite elevated across all of our paperboard substrates. In addition, AF&PA first quarter data reflects declines in industry inventory levels, with balances significantly below historical 5-year average. AF&PA industry operating rates at the end of Q1 for SBS and CRB were 92% and 94%, respectively. Our CUK operating rate was over 95%, as we remained in an oversubscribed environment.

Backlog increased from last quarter and were 6-plus weeks in SBS and CRB and 8-plus weeks in CUK at the end of the quarter. We ended the quarter with net leverage at 3.7 times. While leverage is above our long-term targeted level of 2.5 times to three times and our 2021 target of three times to 3.5 times, we remain confident in our cash flow generation commitments and increase in expected cash flow generation in 2022. Referring back to Slide three and highlights in the quarter. Since the beginning of 2021, we have strengthened our balance sheet, debt maturity and interest rate profiles through very effective borrowing arrangements. We issued $800 million in two senior secured notes offerings. What is notable about these transactions are the annual interest rates of the 2024 notes at 0.8% and the 2026 notes at 1.5%. We also retired $425 million of maturing higher interest rate bonds, with an attractive farm credit system loan. And earlier this month, we completed an amend and extend to our bank credit facility, which notably extended the maturity date from January 2023 to April 2026 and increased the availability under the domestic revolving line of credit by $400 million. Our significant liquidity, balance sheet flexibility and strong cash flow generation remains a source of strength of the economy. We have excellent optionality. And as Mike detailed for you, we are executing a balanced approach to capital allocation.

Turning now to guidance on Slides 13 and 14. Underlying demand for our fiber-based packaging solutions remains strong. As Mike mentioned, we expect 2021 net organic sales growth to be at the high end of our 100 to 200 basis points target range. We are meeting demand, introducing new products and growing organically. We remain steadfastly focused on achieving the growth goals we established in Vision 2025. We are executing multiple price initiatives to offset commodity input cost inflation. We continue to expect that our volume mix and net performance will be in line with our original expectations for the year, as we earn on organic sales growth at the high end of our expectations and execute performance countermeasures to offset winter storm Uri related costs. While some components of adjusted EBITDA have changed given the operating environment we are managing, our full year adjusted EBITDA guidance range of $1.09 billion to $1.15 billion provided at the beginning of 2021 remains unchanged due to the numerous pricing, volume and productivity initiatives we are committed to successfully executing throughout the remainder of the year. All of which will result in stronger adjusted EBITDA performance in the second half of 2021. As such, there's also no change to our full year cash flow guidance range. Thank you for your time this morning.

I will now turn the call back to the operator for questions.

Questions and Answers:

Operator

Thank you.[Operator Instructions] Your first question comes from Mark Connelly from Stephens. Please go ahead. Your line is open.

Mark Connelly -- Stephens -- Analyst

Mike, how much of your newer sustainable packaging represents -- one, two categories: first, new customers; and then second, new rather than replacement business with existing customers.

Michael P. Doss -- President and Chief Executive Officer

Hey. Good morning, Mark. Yes. So it's a mix of both of those things. I mean if you think about KeelClip as an example, that's a new product to an existing customer for the most part. And if you look at some of what we're profiling today with some of the protein packaging and fruit packaging that we've outlined, those will represent, in many cases, new customers that we're selling new products to. So it's -- I should think about the 100 to 200 basis points, and again, as we said, this year, we're going to be at the high end of that range based on what we see in our new product development pipeline and commitments we already have from customers. It's almost half and half.

Mark Connelly -- Stephens -- Analyst

That's great. That's great. Nice percentage. And Steve, you mentioned the return to away-from-home consumption. And I'm curious, is it too early for you to be able to see headwinds coming on the businesses that benefited from the shutdown in away-from-home? Clearly, you've got a lot of organic growth that is more than offsetting. But I'm just curious if you're at a position yet to quantify any headwinds.

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes. Thanks, Mark. Good morning. As we mentioned in the remarks, we have seen a good positive pivot from flat to growth in the foodservice business from March to April. What gives us some of the confidence that we're conveying to you around the high end of the overall volume range is we haven't yet seen anything material in terms of moving away from the at-home consumption. Obviously, that's something we've talked about in the past. We talked about kind of the teasers outer effect that we shared with you previously. But we haven't really seen indications of that materializing. And some of the ongoing at-home consumption and some of the trends around where people work even in a post environment, we haven't seen anything that we'd characterize as material. Our customers remain quite confident in their volumes as they kind of look through the -- certainly through the next couple of quarters. Anything to add to that, Mike?

Michael P. Doss -- President and Chief Executive Officer

No. I think, Mark, it just -- that adds up to what you saw in terms of the backlogs on the paperboard side. I mean if you normalize February for the outages you incurred due to the storm, you've got operating rates in the mid-90s, mid to upper 90s actually really across all three substrates. Backlogs that are at historical highs relative to the five-year average, and inventories that are substantially down against the five-year averages. Steve, you talked about all according to the AF&PA statistics. And so that creates a very favorable operating environment for us.

Mark Connelly -- Stephens -- Analyst

Sure, does. Thank you very much.

Michael P. Doss -- President and Chief Executive Officer

Thanks, Mark.

Operator

Your next question comes from George Staphos from Bank of America. Please go ahead. Your line is open.

Michael P. Doss -- President and Chief Executive Officer

Good morning, George.

George Staphos -- Bank of America -- Analyst

How are you doing? Thanks for the details. I wanted to go with the first question -- use first question for Americraft. So doing some very rough calculations, it seems like the business realizations and mix is pretty comparable to Graphic Packaging, but could you talk a little bit about where the end market weightings might be somewhat different than yours? What kind of mix of business does it have relative to yours? And what kind of retention do you expect or retention loss do you expect that we should be trying to model into our numbers?

Michael P. Doss -- President and Chief Executive Officer

Yes. So thanks for the question. I would characterize it this way. It's food and consumer packaging. It just tends to be a little bit more of a regional focus book of business. There's very little overlap with our existing customer set, virtually none as a matter of fact. And our expectations are that we won't see material loss business.

George Staphos -- Bank of America -- Analyst

Okay. Thanks for that, Mike. And then I want to come back to guidance. And you mentioned you're maintaining your forecasts, considering the multiple price increases, additional productivity actions. I may have left out some things that you had mentioned. But could you point to one or two things in particular the emphasis that you are putting and applying that makes you comfortable in the guidance? And relatedly, can you, to the extent possible, talk about what pricing increases that have been announced are in your guidance? And if there are any price increases that you've announced that are not in your guidance just so we know how to size our forecast based on what ultimately happens in the market one way or another? Thank you, guys.

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes. Thanks, George. It's Steve. I'll take that on, and we can add any additional color. I think on the pricing front, inherent in the guide for the price/cost spread, based upon recognized pricing, known and recognized pricing in the marketplace, as well as very specific initiatives that we're pursuing, we have line of sight to $90 million of price this year in 2021. And that's what's in the guide, that which is known and recognized. We're executing on and pursuing pricing that adds up to over $200 million that would obviously enter benefit later this year and into 2022. But in terms of the guide, there's $90 million of price in the guide. Most of that, in fact, the vast majority, $80 million of that, we will see in the second half of the year, which really speaks to the changes and the things that we've done to compress time lines and be able to execute on pricing in a way that keeps any dislocations relative to the inflation, which I'll talk about in a moment, shorter and shallower. On the inflation front, we saw $34 million of inflation in the quarter, a little over 5% of our commodity input cost spend. Our guide, as that continuing in the 4% to 5% range or roughly $100 million to $120 million of inflation. And so that's -- hence, the modest change to the price/cost spread that we provided in the guidance.

So just repeating that, 4% to 5%, $100 million to $120 million of inflation, $90 million of known price, $200 million plus that we're pursuing. Which results, George, just to finish that off in a pretty significant inflection first half to second half financials. In the first half of this year, we incurred almost $40 million of maintenance downtime and weather-related costs, that will inner to a positive $30 million in the second half, so almost a plus $70 million. On pricing similar, very modest pricing in the first half, under $10 million, upwards of $80 million in the second half, hence, the $90 million. So again, a $70 million type inflection. So those are the very specifics to provide you with regards to what we're executing on what's in and not in our guide.

George Staphos -- Bank of America -- Analyst

Steve, Mike, thanks. I'll turn it over.

Michael P. Doss -- President and Chief Executive Officer

Thanks, George.

Operator

Your next question comes from Mark Wilde from Bank of Montreal. Please go ahead. Your line is open.

Mark Wilde -- Bank of Montreal -- Analyst

Thanks. Good morning, Mike. Good morning, Steve.

Michael P. Doss -- President and Chief Executive Officer

Good morning, Mark.

Mark Wilde -- Bank of Montreal -- Analyst

First question, I just wondered if you could give us a little more color on Americraft, some sense of who the seller is, some sense of asset quality, and whether you kind of see any opportunities for facility rationalization coming out of this. And what percentage of Americraft's Board you were providing going into the process?

Michael P. Doss -- President and Chief Executive Officer

Yes. Thanks for that. So I'll cover those points. First off, just a solid shout out to the Johnson's who are the owners of this business and have been for a long time. They've built an incredible business. We're very pleased, yet to be able to have their company joining ours as we go forward here. The basic statistics we walked through in the script, and it's a little over $200 million in sales. There's 110,000 tons of paperboard. We had about 35,000 of that. So it was split kind of across the CRB and SBS grades. There's a little bit of CUK in there. They've got seven well-capitalized facilities that, quite frankly, are all in attractive markets for us and attractive locations. So look, we -- every year, as you know, Mark, are always looking at our asset footprint and trying to make decisions around how best to utilize and optimize that footprint. But as we go into it, we're going into it that, if anything, we'll look to scale these facilities and work to enhance them over time. The synergies that we pointed out, the $10 million, that's largely through board integrations, procurement savings, just given the size that we have. But this is a nice bolt-on. And the tuck-under part of this is actually relatively straightforward. We're really, really excited to have Americraft joining our company.

Mark Wilde -- Bank of Montreal -- Analyst

Okay. That's helpful. Just as a follow-up, Mike, I wondered if you can talk briefly about this sort of what the sustainability proposition is for some of this paperboard packaging that's laminated with barrier film. I'm just -- I'm very aware that over in Europe, and particularly, the U.K., products like the composite can have come under a lot of fire because they aren't recyclable. And I'm just wondering whether we've got some of the same issue here with some of this paperboard laminated with plastic.

Michael P. Doss -- President and Chief Executive Officer

Yes. It certainly is the same issue, unless you've got institutional way of recycling, which is really what you're referencing relative to some of the concerns there. And again, Mark, that's why we're so focused on our eliminating low-density polyethylene coatings on the inside of our cups, as an example, in pursuing the water-based coatings, which we're making very good progress on here with our customers, because we want to position the business to increasingly become more environmentally conscious with the products that we provide. I mean the end-use consumer has spoken. They appreciate fiber-based packaging. To your point, what we have to do is find ways to provide those functional barriers in a way that's still readily recyclable. And that's something we're actively working on really all the time with our new product development team.

Mark Wilde -- Bank of Montreal -- Analyst

Okay. Fair enough. I'll turn it over. Thank, Mike.

Michael P. Doss -- President and Chief Executive Officer

Thank you.

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Thanks, Mark.

Operator

Your next question comes from Gabe Hajde from Wells Fargo. Please go ahead. Your line is open.

Gabe Hajde -- Wells Fargo -- Analyst

Mike, Steve, good morning.

Michael P. Doss -- President and Chief Executive Officer

Good morning, Gabe.

Gabe Hajde -- Wells Fargo -- Analyst

I had a question about, I guess, the organic volume commentary and then kind of shifting toward the upper end of what you're kind of expecting coming into the year. And quite frankly, it's seemingly at odds. I mean I know that you talked about transitioning away from maybe discussing tonnage or absolute volume figures. But kind of what was reported in the first quarter, and part of it might be housekeeping. If you can give us maybe, Steve, any impacts from the days, the shipping days from the leap year and the prior year on volumes, this maybe will help us. And then again, I guess, kind of revisiting the commentary on volumes. Anything from your customer perspective that you can share with us that gives us confidence in the volume outlook?

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes. Gabe, good morning. Let me just start, and then Mike can add on with the back half of your question. But yes, you're correct. If you look at it on a raw tonnage basis, a couple of things to keep in mind. Quarter-to-quarter, year-over-year, we closed the White Pigeon mill. We exited from some of the corrugated small volume that we did. So those -- that volume was taken out of the company. When you factor in the leap year, you've got 15,000, 20,000 tons that kind of comes from the realities of less true production days. But also importantly, we had almost 40,000 tons of production impact in the quarter associated with winter storm Uri. And so that's one of the reasons that our open market sales were down as we didn't have the tons to sell. Our inventory levels have come down materially. We obviously service all of our customers effectively. But we had 40,000 tons of actual production removed from the quarter. So kind of those four things added up will give you a sense for what, as you said, kind of an ad line level on that particular slide that you're referencing is why there's some modest down. What we look through in all of that are our integration rates and the actual volume we're seeing on our integrated platform, which was the 2% that we conveyed to you today.

Michael P. Doss -- President and Chief Executive Officer

Maybe, Gabe, just to build a little bit on that, talk about the momentum here. As Steve said, I mean if we would have had more tons, then we could have sold more in the quarter, and we could be selling more right now, too. We're having to actually be very thoughtful in terms of how we allocate our tons, both internally and externally, relative to the demand profile that we've got right now given the inventories are down, as I mentioned, over 100,000 tons year-over-year for Graphic. And in some cases, that's caused us to have to do more trucking of paperboard to converting plants as [Indecipherable] our confidence being in the higher end of that range. It's high. And this is a very good paperboard market right now. As I mentioned earlier, the operating rates adjusted for the storm are in the -- at least in the mid to upper 90s. And you've got your backlogs that are growing, and that's a function of growth in the overall folding carton sector. And again, as I clarified here, inventory, not only for us but for the industry, are down according to the AF&PA data. So it's a very healthy and growing market right now.

Gabe Hajde -- Wells Fargo -- Analyst

Thanks for the details, guys. And then a two-part question as a follow-up. I know you guys are not in the business of providing quarterly guidance, but if we were to adjust for the $29 million of Uri hit and call it kind of Q1 would have come in, I think you guys will say, directionally 270, would you expect kind of Q2 taking into account a year-over-year basis similar level of maintenance outage? And I think what's implied of $10 million of favorable price, such as you kind of be directionally in that range or a little bit better for the second quarter. Or is there anything else that I should be thinking about that I'm missing?

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes, Gabe. We don't provide it on a quarterly basis, but you've got the most of the parts correct. I mean I think Q2 will look more like last year's Q2, may modestly better. And then as we talked, the inflection that we spoke about relative to actual maintenance downtime, run strategies as well as price execution will enter most of the benefits in Q3 and 4.

Gabe Hajde -- Wells Fargo -- Analyst

Okay. Thank you, guys.

Michael P. Doss -- President and Chief Executive Officer

Thank you.

Operator

Your next question comes from Adam Samuelson from Goldman Sachs. Please go ahead. Your line is open.

Adam Samuelson -- Goldman Sachs -- Analyst

Hi. Thanks. Good morning, everyone.

Michael P. Doss -- President and Chief Executive Officer

Good morning, Adam.

Adam Samuelson -- Goldman Sachs -- Analyst

I was hoping to maybe continue on a lot of questioning on the demand environment. And I know in the prepared remarks, you talked about April improving versus year-ago levels on the foodservice side. Maybe can talk relative to 2019 in your key channels. I feel like it's a more appropriate kind of baseline given the comps get really over the next few months as we think about kind of some of your different consumer channels, foodservice, kind of how far are we back to normal or above normal in some cases? And as we think about the world continuing to normalize moving forward.

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes, Adam. It's Steve. It's a very, very good question. I don't have the back sitting in front of us on that. But just to kind of give you a sense for what we're seeing. What we are pleased with is that foodservice business here in April is inflecting back to levels that are approaching that where we were in 2019 in terms of moving back into that kind of a trend line. So if you're doing a true multiyear look-through, we're pleased with what we're seeing in that business in April. We're not all the way there, obviously, back, as things haven't completely returned to norm. And what's positive around traditional food, beverage consumer packaging is that a lot of the organic growth innovation-oriented products are making their way through the market relative to 2019 and here into '21. So those would be naturally up, driven by the actual organic sales growth that we've shared with you. If you kind of look through '19 into '21, you'd have a net step-up in growth from organic sales driven by innovation efforts and new product developments.

Adam Samuelson -- Goldman Sachs -- Analyst

Okay. That's really helpful. And then a clarifying question on the pricing comments that you made in terms of the 90 that you've got direct line of sight too and I think it was over 200 of actions that are under way. I just want to make sure I understand the scope of that. Does that include the contracts that you have with customers at our raw material base so that there's a more contractual passthrough? Or are the actions that are contractual with customers outside of that discussion?

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes. Thank you, Adam. It's an all-inclusive number, so it includes the multiple price initiatives and actions that we have under way at any point in time. And these are the known ones that we're executing on. So it would be known RISI and recognized pricing. It would be how our cost models are playing out with customers. It was the actions we're taking to increase prices with noncontract customers. It would be freight initiatives that we have to go to four openers a year rather than two. It would be other terms and conditions that we're modifying. So that was an all-inclusive 90 million things that we know we're executing on. And then the 200 is -- would be what lies ahead of us in terms of either announced or other initiatives that we're pursuing but are not in the guide.

Adam Samuelson -- Goldman Sachs -- Analyst

Got it. That' s all really helpful. Thanks a lot. Thank you.

Michael P. Doss -- President and Chief Executive Officer

Thank you, Adam.

Operator

Your next question comes from Mark Weintraub from Seaport Global. Please go ahead. Your line is open.

Mark Weintraub -- Seaport Global -- Analyst

Thank you. Just following up on the last question. Can you give us a sense as to how much of the 200 million where you have actions in motion might be cost passthrough? So where you can have a really pretty high degree of certainty even at this point.

Michael P. Doss -- President and Chief Executive Officer

Well, I guess, Mark, that is largely based on what goes into effect in May. And so it would follow a similar algorithm to what we've been seeing on these other increases that we've done and have been scored through April. So I think that's how you need to think about it. And I guess what I would add to that, relative to pricing is if you look at this market, as I've said a couple of times here, this is a really good paperboard market. And as Steve just outlined, a number of the Ts and really across the board with our customers because we actually have leverage given the high demand profile that we're seeing here. And what we're doing is making sure that we're going out and getting paid and recovering for the input cost inflation that we're seeing come through the business and the value that we're providing customers. And in order to do that, you know how it works. We've got to be willing to put some business at risk. And that, in fact, is what we're doing here graphically relates to these pricing initiatives that we've got out there. So as Steve mentioned, we've got 90 already recognized, and we've got initiatives of well over 200. The vast majority of that, as he mentioned, will be kind of a late Q4 because of the lag that we see, but strong momentum as we head into 2022, not knowing what the inflationary environment will be. So we feel we're getting out in front of that in a good way and really positioning the business for success over a multiyear period of time.

Mark Weintraub -- Seaport Global -- Analyst

Right. And to make sure I fully understand, if I can, just one. So even if we have another highly inflationary year such as we're having this year where you're suggesting $100 million to $120 million, if you were take this full amount, you would expect that price/cost spread to be favorable to $80 million to $100 million? And then if it's even less inflation and assuming success on all the various initiatives, it can even be a bigger number. Is that the way to think about it?

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Well, it would over time, Mark. I mean, if inflation moves up materially from the kind of 4% to 5% inflation that we've talked about, then obviously, the cost models would pass that through on the reduced lags that we've been referring to. And so obviously, the things move along the way. And if we saw incremental inflation of substance continuing in the business, we would continue then to take other price actions across the other mechanisms that we have with market-based models as well. So this is a point in time based on all that we know specifically that we're trying to provide to you. And then obviously, it variates or is variable depending upon what we actually see relative to inflation over the coming quarters.

Mark Weintraub -- Seaport Global -- Analyst

Understood. Thank you. And one quick other one, if I could. Now obviously, all the customers see the price increases coming. And so to the extent they were able to, I would imagine they would want to increase inventory ahead of time. At the same time, I'm not sure that there is much in the way of carrying converted inventory. Can you provide a little bit of color? Or should one be thinking that customers are trying to build inventory? Or do they really not do that and/or cannot do that?

Michael P. Doss -- President and Chief Executive Officer

It's a small component of it, Mark, if it happens at all, and to tell you the truth and the reality of it is, as I mentioned, we lost 40,000 tons due to winter storm Uri. Our supply chains are actually disrupted and our inventories are low. And as a result of that, as I mentioned, we're having to allocate tons both internally and to external customers. So there's -- we don't see this as inventory building.

Mark Weintraub -- Seaport Global -- Analyst

I appreciate that. Thank you.

Operator

Your next question comes from Anthony Pettinari from Citi. Please go ahead. Your line is open.

Anthony Pettinari -- Citi -- Analyst

Good morning.

Michael P. Doss -- President and Chief Executive Officer

Good morning, Anthony.

Anthony Pettinari -- Citi -- Analyst

On CUK, you talked about backlogs, eight-plus weeks, which is pretty remarkable. I'm wondering if you could talk about if there's a couple of categories or end markets that are really driving that continued strength versus SBS. And then on the Texarkana conversion, I think you had talked earlier about 300,000 ton machine. You'll be able to swing production in 1Q of next year. If you had that capability today, would that all go to CUK? I'm just wondering if you could talk about how you'll be able to use that asset.

Michael P. Doss -- President and Chief Executive Officer

I appreciate the question, Anthony. It's a very good one. Relative to what's driving the global growth of CUK, it's largely beverage. And it's this movement on a global basis to kind of replace plastic solutions with our paperboard, our fiber-based solutions, things like KeelClip and fully enclosed, not just here, but also in Europe and really around the globe. And so as we mentioned at the -- on our last call, to run our business this year, we're buying over 50,000 tons from various suppliers globally to make sure we have what we need. So relative to what we'd be doing if we had the Texarkana mill, that optionality we have, having a fit CUK machine capable of going on that rig, yes, that would be excellent. And that's really why we wanted to make that investment, and we're on track, as we mentioned here. Our plan is to have it done in Q1 of next year. We ordered the major components. Our circa coater and our sizing breasts are on order. We're finishing up the engineering work on that.

But I'm really excited about the optionality to give us to be able to swing back and forth between coated SBS and CUK, it's going to be a big capability that we have. We'll be able to -- with the investments we're making to be able to have our CUK with cost parity with what we're doing in making in West Monroe. So we like that investment. And between that, what we're doing in Kalamazoo, given the demand of these markets, those capital investments look quite fortuitous. And Anthony, just to add on to that as we share other conversations as well, we've converted about 1,000 tons of run rate going from CUK to SBS. So part of this swing machine, that too would be converted back into CUK most likely. And so between that, it's the purchases, I think you could think of it as half of the machine is probably easily convertible among when we complete the work.

Anthony Pettinari -- Citi -- Analyst

Okay. Okay. That's very helpful. And then you highlighted the impact from the winter storm to your tons. I'm just wondering if there's a lingering impact from a raw material perspective, specifically around things like adhesives and glue. Have you lost sales because you haven't been able to procure materials from some of those Gulf Coast suppliers? Is that a risk in 2Q? Is there any other kind of color you can give there?

Michael P. Doss -- President and Chief Executive Officer

Yes, happy to do it. So we did not incur any more downtime for an inability to get materials to operate in our mills other than the 40,000 tons related directly to the storm. And that was, again, in Texarkana and West Monroe. Having said that, we had to substitute certain latexes and adhesives in order to manage supply chains and ensure that customers got what they needed. And again, being a global company, we're able, on the adhesive side, to actually get some adhesives from Europe and bring that in to keep all of our converting plants up and operational. As of May 1, the vast majority of those supply chains are restored, meaning we're getting the material from our existing suppliers prior to the storm, albeit at higher prices, as we outlined in the inflation comments as we put forward. So we didn't lose material sales on the converting side related to that. As Steve mentioned, if we would have had to 40,000 tons, we could add more external paperboard sales, for sure.

Anthony Pettinari -- Citi -- Analyst

Okay. That's helpful. I'll turn it over.

Michael P. Doss -- President and Chief Executive Officer

Thanks, Anthony.

Operator

Your next question comes from Ghansham Panjabi from Baird. Please go ahead. Your line is open.

Matthew Krueger -- Baird -- Analyst

Hi. Good morning. This is actually Matt Krueger sitting in for Ghansham. So given the emphasis on passing price through to customers, not only across your own footprint, but across the consumer supply chain overall, how do you believe that these hikes will impact consumer spending from a product category perspective in terms of branded versus private label? And then does this have any -- does this sort of shift have any impact on your business in any particular fashion from a margin or a volume perspective?

Michael P. Doss -- President and Chief Executive Officer

So that trend on private label versus brand, it's been kind of well under way for a period of time, Matt. So I would expect that to continue to be the case as consumers look for value, and even quality, quite frankly. I think the bigger trend that's going to be interesting for us to watch, and we view it as a tailwind here, is the fact that more people are going to be working from home for longer. Yes, the return to work will bring some office workers back in. But as you've seen, and it's been really well chronicled in the Journal and other news agencies here, is that there is an expectation that more people will be working from home. And again, 95% of what we do is food and beverage. And so if people are at home, there's a reasonable belief that you could have that we would see ongoing demand that would be different than what we saw before. Now on the other side of that, we can see some food service that may be not quite as strong. But as Steve mentioned, we're seeing a nice bounce-back there here in April, which was really our low watermark last year at this time. So I think that's how I'd have you think about it. Obviously, the retailers are going to have to do relative to store brand brands and -- versus consumer brands. But you've seen some of those consumer brands released their results already announced. They're going to take price because they're seeing things come out of them. So I think that's -- that will play out here over the next six to nine months.

Matthew Krueger -- Baird -- Analyst

Great. That's helpful. And then I just wanted to dig into some of the volume mix impact expectations for the year with my next question. So can you talk a little bit about how you expect full year volumes to perform by product category during 2021? And if there's any particular mix benefits or impacts that we should consider as consumer mobility improves throughout the year, I guess I'm kind of aiming this at foodservice versus nonfood service type volumes.

Michael P. Doss -- President and Chief Executive Officer

Yes. I wouldn't, Matt. I mean, overall, our profitability levels have a lot of commonality across the whole portfolio. So I wouldn't expect you to see anything that is particularly mix oriented. I think what we have confidence in is that, at 2% organic growth, there's a good solid top line that comes along with that, that we'll earn on, at margins pretty consistent with where we earn on it as a company. And so if you kind of look at a 2% growth and $130 million, $140 million range, and we earn on it appropriately, it gets you into the range that we're talking about, setting aside a little bit of a headwind in Q1 plus, we have a little bit of acquisition-based year-over-year, earnings in there early this year. So I wouldn't focus too much on the mix component. I'd focus more on the actual volume, organic growth component.

Matthew Krueger -- Baird -- Analyst

Great. That makes sense. That's it for me. Thank you.

Michael P. Doss -- President and Chief Executive Officer

Thanks, Matt.

Operator

Your next question comes from Phil Ng from Jefferies. Please go ahead. Your line is open.

Phil Ng -- Jefferies -- Analyst

Hey, guys. With your leverage now at the higher end of your target, I assume a lot of the excess cash is going to be used to delever. But can you talk about how you prioritize buybacks and M&A in all the next few years?

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes, Phil. It's Steve. We have a long-term commitment here to a balanced approach to capital allocation, and I think it proves itself out quarter-to-quarter. And we take those decisions as we see them in front of us relative to our strategies. So there are times when we're putting capital to work in a more intensive way like we're finishing up this year with Kalamazoo investment. There are times where the M&A is timely and the right thing to do. We put that to work. There are times where we've been dislocated. We believe from a share price perspective and we bought back the company. in pretty material ways. And then obviously, we've returned some value to shareholders in the form of the dividend. So it's an always for us. We do know that this year, we'll probably be -- we'll be in the three times to 3.5 times range. We're probably on the higher end of that with everything that we've brought forward this year. But our confidence in the cash flow generation moving into 2022 is very high, which gives us the ability to speak with confidence around getting the leverage ratio back into the kind of long term two to -- 2.5 times to three times over time.

Michael P. Doss -- President and Chief Executive Officer

And Phil, the other thing I'd add to that is if you think about, and Steve kind of profiled the financing investment took place over the quarter and last year as well is we're borrowing money very efficiently. And if you look at M&A, in particular, it's a little lumpy, right? You don't control when quality assets come to the market. And so we've got to have that kind of flexibility to be able to move when an opportunity presents itself that's strategic and core, our overall vision for where we want to drive the business. So I think that's -- as we've said before, if we see those types of things, we're willing to lever up a bit as long as we see a clear path to delevering very quickly as Steve outlined. So hopefully, that helps you give a little color.

Phil Ng -- Jefferies -- Analyst

Yes, yes. That's great, Mike. So it sounds like you're not -- if there's a good deal on the table or you see a dislocation in your stock price, you're not refraining from buybacks or M&A. So that's encouraging given your confidence here, free cash flow profile. And I guess the product you talked about today on PaperSeal, it looks pretty interesting. Can your customers run it on existing equipment? Is it agnostic to the film that you would use? And any drop-off in terms of performance, like shelf life?

Michael P. Doss -- President and Chief Executive Officer

No. We can run it on our existing equipment, which is important, but the customer actually needs a line, and we've got a partner there that we partnered with and actually make the machine.

Phil Ng -- Jefferies -- Analyst

Okay. Is it a big capital investment for the customer? I guess if they didn't have...

Michael P. Doss -- President and Chief Executive Officer

No. It's not.

Phil Ng -- Jefferies -- Analyst

Okay. And then from a film perspective, you could pretty run -- pretty much run anything or there has to be like a partnered film that you have for this product in particular?

Michael P. Doss -- President and Chief Executive Officer

No. We're agnostic on the film.

Phil Ng -- Jefferies -- Analyst

Okay, great. All right, really exciting. Thank you.

Michael P. Doss -- President and Chief Executive Officer

Thanks, Phil.

Operator

Your next question comes from Kyle White from Deutsche Bank. Please go ahead. Your line is open.

Kyle White -- Deutsche Bank -- Analyst

Hi, good morning. During the quarter, you pointed to the $15 million to $20 million headwind related to the storm, and it came in higher than that. Just curious what drove the increase relative to your initial expectation? And then following up on that, what is offsetting this impact that is allowing you to maintain your net performance guidance in that $70 million to $90 million range?

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes, Kyle. It's Steve. Just very briefly for you. With regards to the $29 million versus the $15 to $20 million, we had to announce that early. We were in the market with the $800 million of secured bonds that we were successfully executing on. So we conveyed that as a material event, but it was very early in the process. And so as such, as it played out as we work through some of the challenges that Mike talked about earlier, Overall, the cost just went up. But it was a function of us needing to be in the market with that material knowledge early in the process. As you may recall, we were pretty early in it. What gives us confidence on the overall productivity is that we don't have the recovery boiler downtime this year. We have less downtime. And our overall confidence in our productivity going into the year was quite high. Unfortunately, the weather impact took away what we felt was the potential for upside, but it's why we believe we can still maintain our overall commitment to productivity and net performance in that $70 million to $90 million range for the year.

Kyle White -- Deutsche Bank -- Analyst

Got it. That's helpful. And then you're highlighting PaperSeal in your ProducePack, are you seeing market penetration for product offerings such as these in your kit up in the U.S. Or are you deliberately focused more on the international and European market first? And then related, why might the U.S. be slower to adopt these products despite everything we're hearing from consumer packaging brands on sustainability?

Michael P. Doss -- President and Chief Executive Officer

Yes. So it's a little bit of a mix. So KeelClip has definitely been more Europe-centric up to this point, although we have a number of applications in sales that will take place here in North America toward the end of this year. We're right on track with where we thought we'd be. We've got over 20 of those machines installed in Europe already. We're learning a lot about how those are running, optimizing their performance. And again, as you know, Kyle, we're selling these to large CPG and beverage companies, and they've got global footprint. So if we're successful in one market, they will look to bring that into other markets as well. We're highly confident that we've seen that before with all the packages that we've done. In regards to some of the ProducePacks that's here in the U.S., as I mentioned, the pun and tray here is for an ample producer in Michigan as an example. And so you put those together, those are a lot of base hits But that's really what gives us confidence in the $7.5 billion addressable market we pointed out two of the three main platforms there, and that particular one being plastic substitution. It used to be in a bag. Now it's going to be in a trade that's made out of solid fiber.

Operator

Your next question comes from Arun Viswanathan from RBC Capital Markets. Please go ahead. Your line is open.

Arun Viswanathan -- RBC Capital Markets -- Analyst

All right. Thanks for taking my questions, guys. Good morning and congrats to the results. I guess, first off, you laid out the $90 million of price that you expect and the $100 million to $120 million of commodity cost inflation. So if you look at the $100 million to $120, what are the components that have inflated the most? And do you expect any moderation in any of those components as we could move forward here? Is that what's embedded in your outlook?

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Yes. Just briefly on that. Obviously, we're not going down to the buy category level. But as Mike mentioned, secondary fiber, chemicals, energy, logistics drove the $34 million, and we would expect for the quarter, and we would expect that -- those to be the primary drivers on a pretty consistent basis for quarters for the remainder of the year that's inherent in the $100 million to $120 million. And so we don't see different categories necessarily, but we do see some inflection up for some categories like logistics that would maintain that over the year, hence, the range, obviously, things can move inside of that, but that's how we're thinking about it.

Arun Viswanathan -- RBC Capital Markets -- Analyst

Okay. And I just want to revisit the price commentary as well. It looks like you mentioned very high operating rates across most of the substrates. Have you -- do you guys feel that the price cost dynamic has improved over the last couple of years? I know you shortened the legs to six months. But I know there's been some capacity additions also in SBS. But maybe if you just look at the three grades, you can just comment on each one to see, again, if you feel that the price cost dynamic has improved and in any of them, I imagine so in CUK just given the demand strength. But what about CRB and SBS?

Michael P. Doss -- President and Chief Executive Officer

Yes. So Arun, I'll answer that. I mean, relative to all three grades as a basket, which is how we need to look at those given some of the substitution around the edges, I'll characterize it as one of the strongest paperboard markets that I can remember, I've been doing this a long time. And so relative to how that looks and what gives us confidence in our pricing is really the strength of those markets. And relative to the lags, and Steve mentioned this, I mean, the algorithm for pricing in our business is substantially different than it was in 2016 and '17, the last time we saw a big run of inflation. As you're seeing, midyear here, we've got the better part of $80 million worth of pricing that's going to take place here in the second half of the year. That's substantially faster.

And as Steve mentioned, it's going to result in a shorter and shallower dislocation. And if we see additional inflation We're going to take more price. That's just how we need to deal with it in the marketplace. And again, we can't predict what inflation will do. We've given you our best analysis as we have around 4% to 5% of our COGS here, roughly on average around $110 million of inflation, which is what we're expecting right now as we sit here today. But if it's more, we'll have to take more price. And again, with these markets and the strength of those, we'll continue to push those graphic because we have to offset our input cost inflation.

Operator

We are out of time for questions today. I would now like to turn the call back over to Graphic Packaging's CEO, Mike Doss, for closing remarks.

Michael P. Doss -- President and Chief Executive Officer

Thank you, everyone, for joining us this morning. During the first quarter, we met strong demand with our fiber-based packaging solutions and captured continued organic growth. We remain intensely focused on achieving the pricing, growth goals and performance improvements we shared with you today. And we look forward to updating you on our progress the next time we speak at the end of the quarter. Thank you. Have a good day.

Operator

[Operator Closing Remarks]

Duration: 62 minutes

Call participants:

Melanie Skijus -- Vice President of Investor Relations

Michael P. Doss -- President and Chief Executive Officer

Stephen R. Scherger -- Executive Vice President and Chief Financial Officer

Mark Connelly -- Stephens -- Analyst

George Staphos -- Bank of America -- Analyst

Mark Wilde -- Bank of Montreal -- Analyst

Gabe Hajde -- Wells Fargo -- Analyst

Adam Samuelson -- Goldman Sachs -- Analyst

Mark Weintraub -- Seaport Global -- Analyst

Anthony Pettinari -- Citi -- Analyst

Matthew Krueger -- Baird -- Analyst

Phil Ng -- Jefferies -- Analyst

Kyle White -- Deutsche Bank -- Analyst

Arun Viswanathan -- RBC Capital Markets -- Analyst

More GPK analysis

All earnings call transcripts

AlphaStreet Logo

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Graphic Packaging Holding Company Stock Quote
Graphic Packaging Holding Company
GPK
$21.38 (4.29%) $0.88

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.