Reaffirms 2024 EBITDA and Increases Free
Cash Flow Guidance
- Net sales for the first quarter of $388 million, down $79
million from prior year quarter
- Net loss for the first quarter of $2 million, a decline of $4
million from prior year quarter
- Adjusted EBITDA for the first quarter of $52 million, up $1
million from prior year quarter
- Total debt of $779 million; Net Secured Debt of $721 million
with a net secured debt ratio of 4.4 times
- 2024 Adjusted EBITDA guidance of $180 million to $200
million
- 2024 Adjusted Free Cash Flow guidance increased to $80 million
to $100 million
Rayonier Advanced Materials Inc. (NYSE:RYAM) (the “Company”)
today reported results for its first quarter ended March 30,
2024.
“First quarter results exceeded our expectations, driven by
lower costs and improved demand for cellulose specialties. We
delivered a solid $52 million in Adjusted EBITDA to maintain a net
secured debt ratio of 4.4 times covenant EBITDA,” stated De Lyle
Bloomquist, President and CEO of RYAM. “We also increased capital
expenditures to support growth in our Biomaterials strategy and
increased net debt to boost inventory levels in preparation for
Jesup’s annual outage.”
“The solid first quarter, along with the start-up of the
bioethanol facility in Tartas and the April completion of the
planned maintenance outage in Jesup, keep us on track to deliver
our full-year guidance of $180 to $200 million in Adjusted EBITDA.
As a result of the indefinite suspension of operations of our
Temiscaming High Purity Cellulose plant and the sale of refund
rights to our softwood lumber duties to OCP Lumber LLC, our 2024
Adjusted Free Cash Flow guidance is increased to $80 to $100
million. The suspension at Temiscaming will also reduce our
exposure to the volatile commodity viscose market. The potential
sale of the Temiscaming Paperboard and High-Yield Pulp facilities
is progressing, albeit slower than originally expected, as we
manage buyers through the complexity of carving out these assets.
While the suspension and asset sale decisions affecting the
Temiscaming site have been approached and carried out
independently, we believe the suspension will bring clarity to the
asset sale diligence process by validating that these assets can be
efficiently run separately. Updates on these processes will be
provided as appropriate. In the meantime, we are focused on
reducing debt with lower earnings volatility as we plan to
refinance our senior secured notes prior to them becoming current
in early 2025,” concluded Mr. Bloomquist.
First Quarter 2024 Financial Results
The Company reported a net loss of $2 million, or $(0.02) per
diluted share, for the quarter ended March 30, 2024, compared to
net income of $2 million, or $0.02 per diluted share, for the prior
year quarter.
The Company operates in the following business segments: High
Purity Cellulose, Paperboard and High-Yield Pulp.
Net sales was comprised of the following for the periods
presented:
Three Months Ended
(in millions)
March 30, 2024
December 31, 2023
April 1, 2023
High Purity Cellulose
$
307
$
347
$
374
Paperboard
53
55
59
High-Yield Pulp
34
25
42
Eliminations
(6
)
(5
)
(8
)
Net sales
$
388
$
422
$
467
Operating results were comprised of the following for the
periods presented:
Three Months Ended
(in millions)
March 30, 2024
December 31, 2023
April 1, 2023
High Purity Cellulose
$
21
$
(49
)
$
13
Paperboard
8
8
10
High-Yield Pulp
(1
)
(5
)
7
Corporate
(11
)
(15
)
(13
)
Operating income (loss)
$
17
$
(61
)
$
17
High Purity Cellulose
Net sales for the quarter decreased $67 million, or 18 percent,
to $307 million compared to the prior year quarter. Included in
each of the current and prior year quarters were $23 million of
other sales primarily from bio-based energy and lignosulfonates.
Despite a 2 percent increase in cellulose specialties prices, total
sales prices decreased 2 percent due to an 11 percent decrease in
commodity prices. Total sales volumes decreased 17 percent driven
by 16 percent and 18 percent decreases in cellulose specialties and
commodity volumes, respectively. Increased cellulose specialties
sales volumes resulting from the closure of a competitor’s plant in
late 2023 and an uptick in ethers sales were more than offset by
customer destocking in acetate products and the one-time favorable
impact from a change in customer contract terms in the prior year
quarter. The decrease in commodity sales volumes was primarily
driven by lower production in favor of cellulose specialties
production as the Company built inventory ahead of Jesup’s second
quarter planned maintenance outage.
Operating income for the quarter increased $8 million compared
to the prior year quarter driven by the higher cellulose
specialties sales prices, decreased key input and logistics costs
and improved productivity, partially offset by the lower cellulose
specialties sales volumes, lower commodity sales prices and volumes
and $7 million of energy cost benefits in the prior year quarter
from sales of excess emission allowances that did not repeat in the
current quarter.
Compared to the fourth quarter of 2023, net sales declined $40
million due to a 15 percent decrease in total sales volumes,
including a 10 percent decrease in cellulose specialties volumes
driven by customer destocking in acetate products that offset an
uptick in ethers sales, and a 21 percent decrease in commodity
volumes due to lower production in favor of cellulose specialties
production. Operating results improved $70 million primarily due to
the $62 million non-cash asset impairment recorded in the fourth
quarter. Also contributing to the improvement in results was a 4
percent increase in total sales prices, including 1 percent and 3
percent increases in cellulose specialties and commodity prices,
respectively, and a decrease in key input costs. Partially
offsetting these improvements were the lower sales volumes and
higher production costs driven by the impact of fourth quarter
annual planned maintenance and market-related production
outages.
Paperboard
Net sales for the quarter decreased $6 million, or 10 percent,
to $53 million compared to the prior year quarter driven by a 12
percent decrease in sales prices due to market-driven demand
declines and mix, partially offset by a slight increase in sales
volumes.
Operating income for the quarter decreased $2 million compared
to the prior year quarter driven by the lower sales prices,
partially offset by lower purchased pulp costs.
Compared to the fourth quarter of 2023, operating income was
flat as a 4 percent decrease in sales prices, due to market-driven
demand declines and mix, was offset by lower unit production costs
due to improved production levels in the current quarter.
High-Yield Pulp
Net sales for the quarter decreased $8 million, or 19 percent,
to $34 million compared to the prior year quarter driven by a 27
percent decrease in sales prices due to market supply dynamics in
China, partially offset by a 16 percent increase in sales
volumes.
Operating results for the quarter declined $8 million compared
to the prior year quarter driven by the lower sales prices,
partially offset by the higher sales volumes and lower logistics
costs.
Compared to the fourth quarter of 2023, operating loss decreased
$4 million driven by 11 percent and 25 percent increases in sales
prices and volumes, respectively, lower logistics and unit
production costs due to improved production levels in the current
quarter.
Corporate
Operating loss for the quarter decreased $2 million compared to
the prior year quarter driven by more favorable foreign exchange
rates in the current quarter, partially offset by higher
discounting and financing fees in the current quarter.
Compared to the fourth quarter of 2023, operating loss decreased
$4 million driven by more favorable foreign exchange rates in the
current quarter, lower environmental expense and lower discounting
and financing fees, partially offset by higher variable
compensation costs.
Non-Operating Income & Expense
Interest expense increased $6 million during the quarter ended
March 30, 2024 compared to the prior year quarter driven by an
increase in the average effective interest rate on debt, partially
offset by a decrease in the average outstanding balance of debt.
Total debt decreased $67 million from April 1, 2023 to March 30,
2024.
Included in non-operating other income in the quarter ended
March 30, 2024 was a $1 million impact from favorable foreign
exchange rates in the current quarter.
Included in non-operating expense in the quarter ended April 1,
2023 was a $2 million pension settlement loss.
Income Taxes
The effective tax benefit rate for the quarter ended March 30,
2024 was 30 percent. The 2024 effective tax rate differed from the
federal statutory rate of 21 percent primarily due to the release
of certain tax reserves, partially offset by return-to-accrual
adjustments, excess deficit on vested stock compensation and
changes in the valuation allowance on disallowed interest
deductions.
The effective tax rate for the quarter ended April 1, 2023 was
not meaningful due to near break-even pretax income for the period,
which results in any discrete tax adjustments significantly
impacting the rate. The largest adjustments creating a difference
between the effective tax rate and the federal statutory rate of 21
percent were an excess tax benefit on vested stock compensation and
return-to-accrual adjustments related to previously filed tax
returns.
Cash Flows & Liquidity
The Company generated operating cash flows of $12 million during
the three months ended March 30, 2024, driven by lower costs and
cash inflows from accounts receivable, partially offset by cash
outflows from other working capital and payments of interest on
long-term debt.
The Company used $33 million in investing activities during the
three months ended March 30, 2024 related to net capital
expenditures, which included $5 million of strategic capital
spending focused on the investment in the 2G bioethanol plant in
Tartas.
The Company had $1 million of net cash inflows from financing
activities during the three months ended March 30, 2024 driven by
net borrowings of long-term Biomaterials project debt.
The Company ended the first quarter with $199 million of global
liquidity, including $55 million of cash, borrowing capacity under
the ABL Credit Facility of $131 million and $13 million of
availability under the France factoring facility.
In January 2024, the Company amended the 2027 Term Loan to
increase the maximum consolidated secured net leverage ratio that
it must maintain beginning in the fourth quarter of 2023 and
through its 2024 fiscal year. The amendment provides the Company
with the operational flexibility to execute its strategic
initiatives in 2024. Should the Company exceed the 4.50 to 1.00
maximum ratio established by the original agreement in any of these
quarters, it will incur a fee of 0.25% of the principal balance
outstanding at the end of the applicable quarter. The Company
incurred total fees of $3 million related to this amendment,
including $1 million in legal and advisory fees recorded to
selling, general and administrative expense in the fourth quarter
of 2023, and $2 million in lender fees recorded as deferred
financing costs in the first quarter of 2024 that will be amortized
to interest expense over the remaining term of the loan.
As of March 30, 2024, the Company’s consolidated secured net
leverage ratio was 4.4 times covenant EBITDA.
2024 Outlook
In October 2023, the Company announced that it is exploring the
potential sale of its Paperboard and High-Yield Pulp assets located
at its Temiscaming site. The potential sale is consistent with the
Company’s commitment to align its portfolio with its long-term
growth strategy and provide flexibility to pay down debt, reduce
leverage and minimize earnings volatility. The sales process is
progressing, albeit slower than originally anticipated, as buyers
work through the complexity of carving out these assets from
existing operations and consider the impact of the indefinite
suspension of the Temiscaming High Purity Cellulose plant. While
the suspension and asset sale decisions affecting the Temiscaming
site have been approached and carried out independently, the
Company believes the suspension will bring clarity to the asset
sale diligence process by validating that these assets can be
efficiently run separately.
The indefinite suspension of operations at the Temiscaming High
Purity Cellulose plant, announced on April 29, 2024, is anticipated
to mitigate the plant’s ongoing operating losses and high capital
needs and improve the Company’s consolidated free cash flow. The
Company realized an $18 million Adjusted EBITDA loss from these
operations in 2023 and invested an average of $15 million in
capital expenditures over the past three years; however, any future
operational loss reductions will be partially offset by stranded
costs. In connection with the suspension of operations, the Company
expects to incur one-time operating charges in 2024 of
approximately $30 million, including mothball, severance and other
employee costs. Further, the Company also expects to incur non-cash
charges in 2024 related to impairments. Overall, the Company
expects that for 2024, the indefinite suspension of the Temiscaming
High Purity Cellulose plant will be marginally positive to Adjusted
EBITDA and will increase free cash flow by $15 million to $20
million as lower capital expenditures and benefits from the
monetization of working capital are expected to more than offset
the one-time and other cash costs associated with the suspension of
operations.
On May 6, 2024, the Company announced the sale of its refund
rights, including interest, related to softwood lumber duties paid
from 2017 through 2021 for $39 million, with the opportunity for
additional sale proceeds in the future contingent upon the timing
and terms of the ultimate outcome of the trade dispute between the
USDOC and Canada.
The Company expects to generate between $180 million and $200
million of Adjusted EBITDA in 2024 with $80 million to $100 million
of Adjusted Free Cash Flow including passive asset sales but
excluding any operating asset sales.
The following market assessment represents the Company’s current
outlook of its business segments’ future performance.
High Purity Cellulose
Average sales prices for cellulose specialties in 2024 are
expected to increase by a low single-digit percentage as compared
to average sales prices in 2023 as the Company prioritizes value
over volume. Sales volumes for cellulose specialties are expected
to be comparable to 2023 driven by increased volumes from the
closure of a competitor’s plant and a modest increase in ethers
sales, offset by a one-time favorable impact from a change in
customer contract terms in the prior year quarter and customer
destocking in the acetate markets. Demand for RYAM commodity
products remains stable as prices are expected to be flat to 2023,
despite a difficult comparison to the first quarter of 2023.
Commodity sales volumes are expected to decline in 2024 as the
Company suspends operations at its Temiscaming High Purity
Cellulose plant for the second half of 2024. Costs are expected to
be lower in 2024 driven by lower key input and logistics costs,
improved productivity and the indefinite suspension of operations
at the Temiscaming High Purity Cellulose plant. The Company’s
bioethanol facility in Tartas, France became operational in the
first quarter of 2024 and is expected to deliver $3 million to $4
million of EBITDA in 2024, growing to $8 million to $10 million
beginning in 2025. EBITDA is expected to decrease in the second
quarter of 2024 compared to the first quarter of 2024 due to the
annual planned maintenance outage at Jesup, but stronger than the
second quarter of 2023.
Paperboard
Paperboard prices in 2024 are expected to remain relatively
stable compared to the first quarter of 2024, while sales volumes
are expected to improve due to improved customer demand. Raw
material prices are expected to increase as purchased pulp prices
are forecast to increase from the first quarter 2024 levels.
Overall, EBITDA is expected to increase sequentially.
High-Yield Pulp
High-Yield Pulp prices are expected to improve slightly in the
second quarter and increase further in the second half of 2024,
while sales volumes are expected to remain stable sequentially and
then increase in the second half of 2024. Overall, the Company
expects to generate positive EBITDA from this segment in the coming
quarter.
Corporate
Corporate costs are expected to be flat or increase slightly in
2024 as the Company continues its ERP implementation. The project
will enhance the Company’s operating and reporting systems and is
expected to drive additional improvements and efficiencies
beginning in 2025.
Biomaterials Strategy
The Company continues to invest in new products to provide both
increased end market diversity and incremental profitability. These
new products will target the growing green energy and products
markets. The successful shipment of the Company’s first production
of 2G bioethanol from its Tartas, France bioethanol facility is a
significant milestone towards the Company’s goal of generating $42
million of annual EBITDA from these new products by 2027. Recent
achievements include receiving conditional Generally Recognized As
Safe (GRAS) regulatory approval for a prebiotics product and moving
forward with plans for a bioethanol facility in Fernandina Beach.
The Company is also advancing various other projects and is in the
process of securing green capital to support these efforts. Updates
on the progress of these initiatives will be provided throughout
the year.
Conference Call Information
RYAM will host a conference call and live webcast at 9:00 a.m.
ET on Wednesday, May 8, 2024 to discuss these results. Supplemental
materials and access to the live audio webcast will be available at
www.RYAM.com. A replay of this webcast will be archived on the
Company’s website shortly after the call.
Investors may listen to the conference call by dialing
877-407-8293, no passcode required. For international parties, dial
201-689-8349. A replay of the teleconference will be available one
hour after the call ends until 6:00 p.m. ET on Wednesday, May 22,
2024. The replay dial-in number within the U.S. is 877-660-6853,
international is 201-612-7415, Conference ID: 13745424.
About RYAM
RYAM is a global leader of cellulose-based technologies,
including high purity cellulose specialties, a natural polymer
commonly used in the production of filters, food, pharmaceuticals
and other industrial applications. RYAM’s specialized assets,
capable of creating the world’s leading high purity cellulose
products, are also used to produce biofuels, bioelectricity and
other biomaterials such as bioethanol and tall oils. The Company
also manufactures products for the paper and packaging markets.
With manufacturing operations in the U.S., Canada and France, RYAM
generated $1.6 billion of revenue in 2023. More information is
available at www.RYAM.com.
Forward-Looking Statements
Certain statements in this document regarding anticipated
financial, business, legal or other outcomes, including business
and market conditions, outlook and other similar statements
relating to future events, developments or financial or operational
performance or results, are “forward-looking statements” made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and other federal securities laws.
These forward-looking statements are identified by the use of words
such as “may,” “will,” “should,” “expect,” “estimate,” “target,”
“believe,” “intend,” “plan,” “forecast,” “anticipate,” “guidance”
and other similar language. However, the absence of these or
similar words or expressions does not mean a statement is not
forward-looking. Forward-looking statements are not guarantees of
future performance or events and undue reliance should not be
placed on these statements. Although we believe the expectations
reflected in any forward-looking statements are based on reasonable
assumptions, we can give no assurance that these expectations will
be attained, and it is possible that actual results may differ
materially from those indicated by these forward-looking statements
due to a variety of risks and uncertainties. All statements made in
this earnings release are made only as of the date set forth at the
beginning of this release. The Company undertakes no obligation to
update the information made in this release in the event facts or
circumstances subsequently change after the date of this release.
The Company has not filed its Form 10-Q for the quarter ended March
30, 2024. As a result, all financial results described in this
earnings release should be considered preliminary, and are subject
to change to reflect any necessary adjustments or changes in
accounting estimates, that are identified prior to the time the
Company files its Form 10-Q.
The Company’s operations are subject to a number of risks and
uncertainties including, but not limited to, those listed below.
When considering an investment in the Company’s securities, you
should carefully read and consider these risks, together with all
other information in the Company’s Annual Report on Form 10-K and
other filings and submissions to the SEC, which provide more
information and detail on the risks described below. If any of the
events described in the following risk factors occur, the Company’s
business, financial condition, operating results and cash flows, as
well as the market price of the Company’s securities, could be
materially adversely affected. These risks and events include,
without limitation: Macroeconomic and Industry Risks The
Company’s business, financial condition and results of operations
could be adversely affected by disruptions in the global economy
caused by geopolitical conflicts and related impacts. The Company
is subject to risks associated with epidemics and pandemics, which
could have a material adverse impact on the Company’s business,
financial condition, results of operations and cash flows. The
businesses the Company operates are highly competitive and many of
them are cyclical, which may result in fluctuations in pricing and
volume that can materially adversely affect the Company’s business,
financial condition, results of operations and cash flows. Changes
in the availability and price of raw materials and energy and
continued inflationary pressure could have a material adverse
effect on the Company’s business, financial condition and results
of operations. The Company is subject to material risks associated
with doing business outside of the United States. Foreign currency
exchange fluctuations may have a material adverse impact on the
Company’s business, financial condition and results of operations.
Restrictions on trade through tariffs, countervailing and
anti-dumping duties, quotas and other trade barriers, in the United
States and internationally, could materially adversely affect the
Company’s ability to access certain markets. Business and
Operational Risks The Company’s ten largest customers
represented approximately 40 percent of 2023 revenue and the loss
of all or a substantial portion of revenue from these customers
could have a material adverse effect on the Company’s business. A
material disruption at any of the Company’s manufacturing plants
could prevent the Company from meeting customer demand, reduce
sales and profitability, increase the cost of production and
capital needs, or otherwise materially adversely affect the
Company’s business, financial condition and results of operations.
Unfavorable changes in the availability of, and prices for, wood
fiber may have a material adverse impact on the Company’s business,
financial condition and results of operations. Substantial capital
is required to maintain the Company’s production facilities, and
the cost to repair or replace equipment, as well as the associated
downtime, could materially adversely affect the Company’s business.
The Company faces substantial asset risk, including the potential
for impairment related to long-lived assets and the potential
impact to the value of recorded deferred tax assets. The Company
depends on third parties for transportation services and
unfavorable changes in the cost and availability of transportation
could materially adversely affect the Company’s business. Failure
to maintain satisfactory labor relations could have a material
adverse effect on the Company’s business. The Company is dependent
upon attracting and retaining key personnel, the loss of whom could
materially adversely affect the Company’s business. Failure to
develop new products or discover new applications for existing
products, or inability to protect the intellectual property
underlying new products or applications, could have a material
adverse impact on the Company’s business. Loss of Company
intellectual property and sensitive data or disruption of
manufacturing operations due to a cybersecurity incident could
materially adversely impact the business. Regulatory and
Environmental Risks The Company’s business is subject to
extensive environmental laws, regulations and permits that may
materially restrict or adversely affect how the Company conducts
business and its financial results. The potential longer-term
impacts of climate-related risks remain uncertain at this time.
Regulatory measures to address climate change may materially
restrict how the Company conducts business or adversely affect its
financial results. Financial Risks The Company may need to
make significant additional cash contributions to its retirement
benefit plans if investment returns on pension assets are lower
than expected or interest rates decline, and/or due to changes to
regulatory, accounting and actuarial requirements. The Company has
debt obligations that could materially adversely affect the
Company’s business and its ability to meet its obligations.
Covenants in the Company’s debt agreements may impair its ability
to operate its business. Challenges in the commercial and credit
environments may materially adversely affect the Company’s future
access to capital. The Company may require additional financing in
the future to meet its capital needs or to make acquisitions, and
such financing may not be available on favorable terms, if at all,
and may be dilutive to existing stockholders. Common Stock and
Certain Corporate Matters Risks Stockholders’ ownership in RYAM
may be diluted. Certain provisions in the Company’s amended and
restated certificate of incorporation and bylaws, and of Delaware
law, could prevent or delay an acquisition of the Company, which
could decrease the price of its common stock.
Other important factors that could cause actual results or
events to differ materially from those expressed in forward-looking
statements that may have been made in this document are described
or will be described in the Company’s filings with the U.S.
Securities and Exchange Commission, including the Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. The Company assumes
no obligation to update these statements except as is required by
law.
Non-GAAP Financial Measures
This earnings release and the accompanying schedules contain
certain non-GAAP financial measures, including EBITDA, adjusted
EBITDA, adjusted free cash flow, adjusted net income, adjusted net
debt and net secured debt. The Company believes these non-GAAP
financial measures provide useful information to its Board of
Directors, management and investors regarding its financial
condition and results of operations. Management uses these non-GAAP
financial measures to compare its performance to that of prior
periods for trend analyses, to determine management incentive
compensation and for budgeting, forecasting and planning
purposes.
The Company does not consider these non-GAAP financial measures
an alternative to financial measures determined in accordance with
GAAP. The principal limitation of these non-GAAP financial measures
is that they may exclude significant expense and income items that
are required by GAAP to be recognized in the consolidated financial
statements. In addition, they reflect the exercise of management’s
judgment about which expense and income items are excluded or
included in determining these non-GAAP financial measures. In order
to compensate for these limitations, reconciliations of the
non-GAAP financial measures to their most directly comparable GAAP
financial measures are provided below. Non-GAAP financial measures
are not necessarily indicative of results that may be generated in
future periods and should not be relied upon, in whole or part, in
evaluating the financial condition, results of operations or future
prospects of the Company.
Rayonier Advanced Materials
Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
(in millions, except share and
per share information)
Three Months Ended
March 30, 2024
December 31, 2023
April 1, 2023
Net sales
$
388
$
422
$
467
Cost of sales
(351
)
(395
)
(430
)
Gross margin
37
27
37
Selling, general and administrative
expense
(21
)
(17
)
(19
)
Foreign exchange gain (loss)
3
(2
)
—
Asset impairment
—
(62
)
—
Other operating expense, net
(2
)
(7
)
(1
)
Operating income (loss)
17
(61
)
17
Interest expense
(21
)
(22
)
(15
)
Other income (expense), net
2
1
(2
)
Loss before income tax
(2
)
(82
)
—
Income tax benefit
—
21
3
Equity in loss of equity method
investment
—
—
(1
)
Net income (loss)
$
(2
)
$
(61
)
$
2
Basic and diluted earnings per common
share
Net income (loss) per common share
$
(0.02
)
$
(0.94
)
$
0.02
Shares used in determining EPS
Basic EPS
65,447,454
65,356,895
64,504,200
Diluted EPS
65,447,454
65,356,895
66,596,653
Rayonier Advanced Materials
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in millions)
March 30, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
55
$
76
Other current assets
491
499
Property, plant and equipment, net
1,058
1,075
Other assets
531
533
Total assets
$
2,135
$
2,183
Liabilities and Stockholders’
Equity
Debt due within one year
$
23
$
25
Other current liabilities
309
351
Long-term debt
756
752
Non-current environmental liabilities
160
160
Other liabilities
145
148
Total stockholders’ equity
742
747
Total liabilities and stockholders’
equity
$
2,135
$
2,183
Rayonier Advanced Materials
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(in millions)
Three Months Ended
March 30, 2024
April 1, 2023
Operating Activities
Net income (loss)
$
(2
)
$
2
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation and amortization
34
35
Other
1
5
Changes in working capital and other
assets and liabilities
(21
)
9
Cash provided by operating activities
12
51
Investing Activities
Capital expenditures, net of proceeds
(33
)
(21
)
Cash used in investing activities
(33
)
(21
)
Financing Activities
Changes in debt
3
(9
)
Other
(2
)
(5
)
Cash provided by (used in) financing
activities
1
(14
)
Net increase (decrease) in cash and cash
equivalents
(20
)
16
Net effect of foreign exchange on cash and
cash equivalents
(1
)
1
Balance, beginning of period
76
152
Balance, end of period
$
55
$
169
Rayonier Advanced Materials
Inc.
Sales Volumes and Average
Prices
(Unaudited)
Three Months Ended
March 30, 2024
December 31, 2023
April 1, 2023
Average Sales Prices ($ per metric
ton)
High Purity Cellulose
$
1,299
$
1,248
$
1,322
Paperboard
$
1,382
$
1,441
$
1,568
High-Yield Pulp (external sales)
$
559
$
504
$
769
Sales Volumes (thousands of metric
tons)
High Purity Cellulose
219
259
265
Paperboard
38
38
38
High-Yield Pulp (external sales)
50
40
43
Rayonier Advanced Materials
Inc.
Reconciliation of Non-GAAP
Measures
(Unaudited)
(in millions)
EBITDA and Adjusted EBITDA by
Segment(a)
Three Months Ended March 30,
2024
High Purity Cellulose
Paperboard
High-Yield Pulp
Corporate
Total
Net income (loss)
$
21
$
8
$
(1
)
$
(30
)
$
(2
)
Depreciation and amortization
29
4
1
—
34
Interest expense, net
—
—
—
20
20
Income tax benefit
—
—
—
—
—
EBITDA and Adjusted EBITDA
$
50
$
12
$
—
$
(10
)
$
52
Three Months Ended December
31, 2023
High Purity Cellulose
Paperboard
High-Yield Pulp
Corporate
Total
Net income (loss)
$
(49
)
$
9
$
(5
)
$
(16
)
$
(61
)
Depreciation and amortization
32
3
—
1
36
Interest expense, net
—
—
—
21
21
Income tax benefit
—
—
—
(21
)
(21
)
EBITDA
(17
)
12
(5
)
(15
)
(25
)
Asset impairment
62
—
—
—
62
Adjusted EBITDA
$
45
$
12
$
(5
)
$
(15
)
$
37
Three Months Ended April 1,
2023
High Purity Cellulose
Paperboard
High-Yield Pulp
Corporate
Total
Net income (loss)
$
13
$
10
$
7
$
(28
)
$
2
Depreciation and amortization
31
3
1
—
35
Interest expense, net
—
—
—
15
15
Income tax benefit
—
—
—
(3
)
(3
)
EBITDA
44
13
8
(16
)
49
Pension settlement loss
—
—
—
2
2
Adjusted EBITDA
$
44
$
13
$
8
$
(14
)
$
51
Annual Guidance
2024
Low
High
Net loss
$
(34
)
$
(14
)
Depreciation and amortization
140
140
Interest expense, net
75
75
Income tax benefit(b)
(1
)
(1
)
EBITDA and Adjusted EBITDA
$
180
$
200
_________________________
(a)
EBITDA is defined as net income (loss)
before interest, taxes, depreciation and amortization. Adjusted
EBITDA is defined as EBITDA adjusted for items that management
believes are not representative of core operations. EBITDA and
Adjusted EBITDA are non-GAAP measures used by management, existing
stockholders and potential stockholders to measure how the Company
is performing relative to the assets under management.
(b)
Estimated using the statutory rates of
each jurisdiction and ignoring all permanent book-to-tax
differences.
Adjusted Free Cash
Flow(a)
Three Months Ended
March 30, 2024
April 1, 2023
Cash provided by operating
activities
$
12
$
51
Capital expenditures, net
(28
)
(15
)
Adjusted free cash flow
$
(16
)
$
36
Annual Guidance Range
2024
Low
High
Cash provided by operating
activities
$
160
$
180
Capital expenditures, net
(80
)
(80
)
Adjusted free cash flow
$
80
$
100
________________________
(a)
Adjusted free cash flow is defined as cash
provided by (used in) operating activities adjusted for capital
expenditures, net of proceeds from the sale of assets and excluding
strategic capital expenditures. Adjusted free cash flow is a
non-GAAP measure of cash generated during a period which is
available for dividend distribution, debt reduction, strategic
acquisitions and repurchase of the Company’s common stock.
Adjusted Net Debt and Net
Secured Debt(a)
March 30, 2024
December 31, 2023
Debt due within one year
$
23
$
25
Long-term debt
756
752
Total debt
779
777
Unamortized premium, discount and issuance
costs
19
20
Cash and cash equivalents
(55
)
(76
)
Adjusted net debt
743
721
Unsecured debt
(22
)
(23
)
Net secured debt
$
721
$
698
________________________
(a)
Adjusted net debt is defined as the amount
of debt after the consideration of debt premium, discount and
issuance costs, less cash. Net secured debt is defined as adjusted
net debt less unsecured debt.
Adjusted Net Income
(Loss)(a)
Three Months Ended
March 30, 2024
December 31, 2023
April 1, 2023
$
Per Diluted Share
$
Per Diluted Share
$
Per Diluted Share
Net income (loss)
$
(2
)
$
(0.02
)
$
(61
)
$
(0.94
)
$
2
$
0.02
Asset impairment
—
—
62
0.95
—
—
Pension settlement loss
—
—
—
—
2
0.03
Tax effect of adjustments
—
—
(15
)
(0.23
)
—
—
Adjusted net income (loss)
$
(2
)
$
(0.02
)
$
(14
)
$
(0.22
)
$
4
$
0.05
________________________
(a)
Adjusted net income (loss) is defined as
net income (loss) adjusted net of tax for items that management
believes are not representative of core operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507216185/en/
Media Ryan Houck 904-357-9134 Investors Mickey Walsh
904-357-9162
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