Sandy Burns's questions to Mercer International Inc (MERC) leadership • Q2 2025
Question
Sandy Burns from Stifel Nicolaus questioned the state of Mercer's softwood inventory levels, asking if they were elevated and if there was a risk of a non-cash write-down similar to the one taken on hardwood. She also inquired about any covenants on the Canadian revolver that could be at risk and sought clarification on the maintenance CapEx level.
Answer
CFO Richard Short acknowledged that softwood inventories are slightly elevated due to slower sales in China but stated the company is not close to needing an impairment. He also confirmed there are no immediate concerns regarding the Canadian revolver's springing covenant, which is not close to being triggered. He clarified that the maintenance of business CapEx level is around $60 million to $70 million.