RYAM Announces Fourth Quarter and Full Year 2023 Results and Provides Improved Outlook for 2024
- Net sales for 2023 declined by $74 million compared to the prior year.
- Loss from continuing operations in 2023 was $102 million, including a $62 million non-cash impairment.
- Adjusted EBITDA for 2023 was $139 million.
- Year-to-date cash provided by operating activities was $136 million, with total debt reduced by $76 million to $777 million.
- Adjusted Free Cash Flow generated $53 million year-to-date.
- 2024 Adjusted EBITDA guidance is $180 million to $200 million, expected to drive $20 million to $40 million of Adjusted Free Cash Flow.
- Net sales declined in 2023 compared to the prior year.
- Loss from continuing operations included a $62 million non-cash impairment.
- Operating income and net sales decreased in various business segments.
- Interest expenses increased during the year ended December 31, 2023.
- The Company incurred fees related to an amendment to the 2027 Term Loan.
Insights
The reported financial results for Rayonier Advanced Materials Inc. (RYAM) indicate several areas of concern, particularly the decrease in net sales and the reported loss from continuing operations. The $62 million non-cash impairment suggests a significant write-down of assets, which can be indicative of an overestimation of asset values in prior periods or a strategic realignment that necessitates a reduction in asset carrying values. This impairment, while non-cash, impacts the company's financial position and could signal to investors a need for caution regarding the company's asset valuation and future earnings potential.
Additionally, the reduction in total debt is a positive sign, as it indicates a stronger balance sheet and improved financial flexibility. However, investors should be aware of the net secured debt ratio of 4.2 times Adjusted EBITDA, which, while within covenant limits, suggests a relatively high level of debt compared to earnings. The projected increase in Adjusted EBITDA and free cash flow for 2024 is optimistic, but investors should consider the company's ability to meet these projections amidst market challenges, such as soft demand and pricing pressures.
The performance of RYAM's business segments reflects broader market trends, with weak construction activity and soft demand affecting cellulose ethers products. The strategic focus on generating free cash flow through working capital improvements is a prudent approach in times of market weakness. However, the reliance on cost-cutting measures and market-driven downtime could indicate underlying issues with demand and pricing power within the company's industry segments.
RYAM's anticipation of improved results in 2024 due to a competitor's closure and strategic sales prioritization is a notable point. This suggests that the company expects to gain market share and improve pricing. However, the success of these strategies hinges on market conditions, including the demand for cellulose specialties and the impact of global economic factors on construction and paper industries. Investors should monitor industry trends and RYAM's execution of its strategic initiatives closely.
The impairment recorded by RYAM is a strategic decision to consolidate production and manage excess capacity, which could lead to increased operational efficiency and reduced earnings volatility in the long term. The launch of the new bioethanol facility is an expansion into a growing market for bio-based products, potentially diversifying RYAM's revenue streams and reducing dependence on traditional pulp and paper markets. However, the success of this venture will depend on the scalability of production and market adoption rates.
The mention of an improving outlook due to a competitor's closure is significant as it can lead to a better pricing environment for RYAM's products. However, investors should consider the potential for new competitors entering the market or capacity expansions from existing competitors, which could offset the benefits of reduced competition. The strategic review of the potential sale of the Paperboard and High-Yield Pulp assets aligns with the company's focus on its core growth strategy, but the outcome and impact of such a sale will be critical to assess for future financial health and operational focus.
-
Net sales for 2023 of
$1,643 million $74 million
-
Loss from continuing operations for 2023 of
$102 million $62 million $75 million
-
Adjusted EBITDA from continuing operations for 2023 of
$139 million
-
Year-to-date cash provided by operating activities of
$136 million $777 million $76 million
-
Adjusted Free Cash Flow year-to-date generation of
$53 million $698 million
- Remained in compliance with our debt covenants with a net secured debt ratio of 4.2 times
-
2024 Adjusted EBITDA guidance of
$180 million $200 million $20 million $40 million
“Our EBITDA results for 2023 fell short of expectations reflecting soft demand for cellulose ethers products driven by weak construction activity, lower than expected demand in Paperboard and weak pricing in High-Yield Pulp and commodity pulp products. In response to weaker markets, we implemented cost-cutting measures and strategically scheduled market-driven downtime across all segments. Our primary focus shifted to generating free cash flow, driven predominantly by improvements in working capital and adhering to our lending commitments,” said De Lyle Bloomquist, RYAM’s President and Chief Executive Officer. “As a result, we concluded the year with
“With an improving outlook aided by a competitor’s closure, coupled with our sales priority of value over volume, we anticipate better results for 2024. Higher pricing for our key cellulose specialties products, along with lower unit production costs for our High Purity Cellulose business, driven by improved productivity and lower key input and logistics costs, are expected to generate higher earnings for this segment. Furthermore, our new bioethanol facility is expected to commence operations in the first quarter of 2024. Paperboard and High-Yield Pulp are also expected to deliver improved results due to lower costs and higher production due to normalized demand. In total, we project an Adjusted EBITDA of
Fourth Quarter 2023 Financial Results
The Company reported a net loss of
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 |
|
Year Ended |
||||||||||||||||
(in millions) |
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||
High Purity Cellulose |
$ |
347 |
|
|
$ |
292 |
|
|
$ |
384 |
|
|
$ |
1,313 |
|
|
$ |
1,336 |
|
Paperboard |
|
55 |
|
|
|
57 |
|
|
|
67 |
|
|
|
219 |
|
|
|
250 |
|
High-Yield Pulp |
|
25 |
|
|
|
25 |
|
|
|
58 |
|
|
|
136 |
|
|
|
160 |
|
Eliminations |
|
(5 |
) |
|
|
(5 |
) |
|
|
(9 |
) |
|
|
(25 |
) |
|
|
(29 |
) |
Net sales |
$ |
422 |
|
|
$ |
369 |
|
|
$ |
500 |
|
|
$ |
1,643 |
|
|
$ |
1,717 |
|
Operating results were comprised of the following for the periods presented:
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
(in millions) |
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||
High Purity Cellulose |
$ |
(49 |
) |
|
$ |
(6 |
) |
|
$ |
10 |
|
|
$ |
(42 |
) |
|
$ |
31 |
|
Paperboard |
|
8 |
|
|
|
13 |
|
|
|
9 |
|
|
|
37 |
|
|
|
37 |
|
High-Yield Pulp |
|
(5 |
) |
|
|
(6 |
) |
|
|
12 |
|
|
|
(3 |
) |
|
|
16 |
|
Corporate |
|
(15 |
) |
|
|
(15 |
) |
|
|
(15 |
) |
|
|
(57 |
) |
|
|
(58 |
) |
Operating income (loss) |
$ |
(61 |
) |
|
$ |
(14 |
) |
|
$ |
16 |
|
|
$ |
(65 |
) |
|
$ |
26 |
|
High Purity Cellulose
Net sales for the year ended December 31, 2023 decreased
Net sales for the fourth quarter decreased
Operating results for the quarter and year ended December 31, 2023 declined
Year over year, the higher cellulose specialties sales prices and commodity sales volumes and decreased key input and logistics costs were offset by the lower cellulose specialties sales volumes and commodity sales prices and higher labor costs due to inflation. Also contributing to the year-over-year decline in operating results were
In the current quarter, the higher cellulose specialties sales prices and commodity sales volumes, decreased key input, logistics and labor costs and the impact of the timing and extent of maintenance outages were offset by the lower cellulose specialties sales volumes and commodity sales prices.
Compared to the third quarter of 2023, the operating loss increased
Paperboard
Net sales for the year ended December 31, 2023 decreased
Operating income for the quarter and year ended December 31, 2023 decreased
Compared to the third quarter of 2023, operating income decreased
High-Yield Pulp
Net sales for the year ended December 31, 2023 decreased
Operating results for the quarter and year ended December 31, 2023 declined
Compared to the third quarter of 2023, operating results improved
Corporate
Operating loss for the quarter and year ended December 31, 2023 was flat and decreased
Non-Operating Income & Expense
Interest expense increased
Interest income increased
Also included in non-operating other income in the year ended December 31, 2023 was a
Included in non-operating other income in the year ended December 31, 2022 was a
Income Taxes
The effective tax rate on the loss from continuing operations for the quarter and year ended December 31, 2023 was a benefit of 26 percent and 24 percent, respectively. The 2023 effective tax rates differed from the federal statutory rate of 21 percent primarily due to different statutory tax rates in foreign jurisdictions,
The effective tax rate on the income from continuing operations for the quarter ended December 31, 2022 was a benefit of 130 percent. The effective tax rate on the loss from continuing operations for the year ended December 31, 2022 was an expense of 4 percent. The most significant items creating a difference between the 2022 effective tax rates and the statutory rate of 21 percent were changes in the valuation allowance on disallowed interest deductions, nondeductible executive compensation,
Discontinued Operations
During the year ended December 31, 2023, the Company recorded a pre-tax gain of
During the year ended December 31, 2022, the Company recorded a pre-tax gain of
Cash Flows & Liquidity
For the year ended December 31, 2023, the Company generated operating cash flows of
For the year ended December 31, 2023, the Company used
For the year ended December 31, 2023, the Company used
The Company ended the year with
In January 2024, the Company amended the 2027 Term Loan to increase the maximum consolidated secured net leverage ratio that it must maintain 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. In addition, 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
As of the fourth quarter, the Company’s consolidated secured net leverage ratio was 4.2 times.
2024 Outlook
In October 2023, the Company announced that it engaged a financial advisor to explore the potential sale of its Paperboard and High-Yield Pulp assets located at its
Excluding any assets sales, the Company expects to generate between
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. Sales volumes for cellulose specialties are expected to remain flat compared to 2023 as increased volumes from the closure of a competitor’s plant are offset by a favorable change in customer contract terms in the first quarter of 2023 that is not expected to repeat in 2024. Demand for RYAM cellulose specialties will be mixed. Acetate is expected to experience moderate destocking. Ethers volumes are anticipated to improve albeit at lower than historical levels. Other cellulose specialties volumes will benefit from the closure of a competitor’s facility. Demand for RYAM commodity products remains resilient with fluff and viscose prices expected to improve from the fourth quarter of 2023, however not to the level of realized prices in early 2023. Commodity sales volumes are expected to increase in 2024 as the Company focuses on improving productivity, with fluff volume expected to improve due to higher demand and both viscose and paper pulp sales volume expected to decrease. Raw material input and logistics costs are expected to be lower in 2024. Additionally, the Company expects to commission its bioethanol facility in Tartas,
Paperboard
Paperboard prices in 2024 are expected to decrease slightly as compared to the fourth quarter of 2023, while sales volumes are expected to improve as production is ramped up to meet improved customer demand. Raw material prices are expected to increase as purchased pulp prices are forecast to increase from fourth quarter 2023 levels. Overall, EBITDA is expected to remain flat sequentially.
High-Yield Pulp
High-yield pulp prices are expected to increase in the first quarter of 2024 as the Company captures the value of higher index pricing from the latter part of the fourth quarter of 2023. Sales volumes are also expected to increase in the first quarter as production is ramped up to meet customer demand. 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 completes the final year of its multi-year 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
As previously announced at the Company’s Investor Day in October 2023, the Company is investing 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 commissioning of the bioethanol facility is a significant milestone towards the Company’s goal of generating
Conference Call Information
RYAM will host a conference call and live webcast at 9:00 a.m. ET on Wednesday, February 28, 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, March 13, 2024. The replay dial-in number within the
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. The Company also manufactures products for paper and packaging markets. With manufacturing operations in the
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-K for the year ended December 31, 2023. 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-K.
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
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
Non-GAAP Financial Measures
This earnings release and the accompanying schedules contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted income from continuing operations and adjusted net 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 |
|
Year Ended |
||||||||||||||||
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||
Net sales |
$ |
422 |
|
|
$ |
369 |
|
|
$ |
500 |
|
|
$ |
1,643 |
|
|
$ |
1,717 |
|
Cost of sales |
|
(395 |
) |
|
|
(360 |
) |
|
|
(456 |
) |
|
|
(1,555 |
) |
|
|
(1,594 |
) |
Gross margin |
|
27 |
|
|
|
9 |
|
|
|
44 |
|
|
|
88 |
|
|
|
123 |
|
Selling, general and administrative expense |
|
(17 |
) |
|
|
(22 |
) |
|
|
(23 |
) |
|
|
(76 |
) |
|
|
(91 |
) |
Foreign exchange gain (loss) |
|
(2 |
) |
|
|
1 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
4 |
|
Asset impairment |
|
(62 |
) |
|
|
— |
|
|
|
— |
|
|
|
(62 |
) |
|
|
— |
|
Other operating expense, net |
|
(7 |
) |
|
|
(2 |
) |
|
|
(5 |
) |
|
|
(12 |
) |
|
|
(10 |
) |
Operating income (loss) |
|
(61 |
) |
|
|
(14 |
) |
|
|
16 |
|
|
|
(65 |
) |
|
|
26 |
|
Interest expense |
|
(22 |
) |
|
|
(21 |
) |
|
|
(17 |
) |
|
|
(74 |
) |
|
|
(66 |
) |
Gain on GreenFirst equity securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
Other income, net |
|
1 |
|
|
|
4 |
|
|
|
3 |
|
|
|
7 |
|
|
|
11 |
|
Income (loss) from continuing operations before income tax |
|
(82 |
) |
|
|
(31 |
) |
|
|
2 |
|
|
|
(132 |
) |
|
|
(24 |
) |
Income tax (expense) benefit |
|
21 |
|
|
|
5 |
|
|
|
2 |
|
|
|
32 |
|
|
|
(1 |
) |
Equity in loss of equity method investment |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(2 |
) |
Income (loss) from continuing operations |
|
(61 |
) |
|
|
(27 |
) |
|
|
4 |
|
|
|
(102 |
) |
|
|
(27 |
) |
Income from discontinued operations, net of tax |
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
Net income (loss) |
$ |
(61 |
) |
|
$ |
(25 |
) |
|
$ |
4 |
|
|
$ |
(102 |
) |
|
$ |
(15 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share |
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations |
$ |
(0.94 |
) |
|
$ |
(0.41 |
) |
|
$ |
0.06 |
|
|
$ |
(1.57 |
) |
|
$ |
(0.42 |
) |
Income from discontinued operations |
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
|
|
0.19 |
|
Net income (loss) per common share |
$ |
(0.94 |
) |
|
$ |
(0.39 |
) |
|
$ |
0.06 |
|
|
$ |
(1.57 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per common share |
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations |
$ |
(0.94 |
) |
|
$ |
(0.41 |
) |
|
$ |
0.05 |
|
|
$ |
(1.57 |
) |
|
$ |
(0.42 |
) |
Income from discontinued operations |
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
|
|
0.19 |
|
Net income (loss) per common share |
$ |
(0.94 |
) |
|
$ |
(0.39 |
) |
|
$ |
0.05 |
|
|
$ |
(1.57 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||
Shares used in determining EPS |
|
|
|
|
|
|
|
|
|
||||||||||
Basic EPS |
|
65,356,895 |
|
|
|
65,343,418 |
|
|
|
63,983,818 |
|
|
|
65,108,397 |
|
|
|
63,910,010 |
|
Diluted EPS |
|
65,356,895 |
|
|
|
65,343,418 |
|
|
|
66,213,467 |
|
|
|
65,108,397 |
|
|
|
63,910,010 |
|
Rayonier Advanced Materials Inc. |
|||||
Condensed Consolidated Balance Sheets |
|||||
(Unaudited) |
|||||
(in millions) |
|||||
|
December 31, |
||||
|
2023 |
|
2022 |
||
Assets |
|
|
|
||
Cash and cash equivalents |
$ |
76 |
|
$ |
152 |
Other current assets |
|
499 |
|
|
538 |
Property, plant and equipment, net |
|
1,075 |
|
|
1,151 |
Other assets |
|
533 |
|
|
507 |
Total assets |
$ |
2,183 |
|
$ |
2,348 |
|
|
|
|
||
Liabilities and Stockholders’ Equity |
|
|
|
||
Debt due within one year |
$ |
25 |
|
$ |
14 |
Other current liabilities |
|
351 |
|
|
340 |
Long-term debt |
|
752 |
|
|
839 |
Non-current environmental liabilities |
|
160 |
|
|
160 |
Other liabilities |
|
148 |
|
|
166 |
Total stockholders’ equity |
|
747 |
|
|
829 |
Total liabilities and stockholders’ equity |
$ |
2,183 |
|
$ |
2,348 |
Rayonier Advanced Materials Inc. |
|||||||
Condensed Consolidated Statements of Cash Flows |
|||||||
(Unaudited) |
|||||||
(in millions) |
|||||||
|
Year Ended December 31, |
||||||
|
2023 |
|
2022 |
||||
Operating Activities |
|
|
|
||||
Net loss |
$ |
(102 |
) |
|
$ |
(15 |
) |
Adjustments to reconcile net loss to cash provided by operating activities: |
|
|
|
||||
Income from discontinued operations |
|
— |
|
|
|
(12 |
) |
Depreciation and amortization |
|
140 |
|
|
|
135 |
|
Asset impairment |
|
62 |
|
|
|
— |
|
Other |
|
(22 |
) |
|
|
12 |
|
Changes in working capital and other assets and liabilities |
|
58 |
|
|
|
(51 |
) |
Cash provided by operating activities |
|
136 |
|
|
|
69 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Capital expenditures, net of proceeds |
|
(128 |
) |
|
|
(138 |
) |
Cash used in investing activities-continuing operations |
|
(128 |
) |
|
|
(138 |
) |
Cash provided by investing activities-discontinued operations |
|
1 |
|
|
|
44 |
|
Cash used in investing activities |
|
(127 |
) |
|
|
(94 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Changes in debt |
|
(71 |
) |
|
|
(73 |
) |
Other |
|
(16 |
) |
|
|
— |
|
Cash used in financing activities |
|
(87 |
) |
|
|
(73 |
) |
|
|
|
|
||||
Net decrease in cash and cash equivalents |
|
(78 |
) |
|
|
(98 |
) |
Net effect of foreign exchange on cash and cash equivalents |
|
2 |
|
|
|
(3 |
) |
Balance, beginning of period |
|
152 |
|
|
|
253 |
|
Balance, end of period |
$ |
76 |
|
|
$ |
152 |
|
Rayonier Advanced Materials Inc. |
||||||||||||||
Sales Volumes and Average Prices |
||||||||||||||
(Unaudited) |
||||||||||||||
|
Three Months Ended |
|
Year Ended |
|||||||||||
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|||||
Average Sales Prices ($ per metric ton) |
||||||||||||||
High Purity Cellulose |
$ |
1,248 |
|
$ |
1,215 |
|
$ |
1,331 |
|
$ |
1,273 |
|
$ |
1,330 |
Paperboard |
$ |
1,441 |
|
$ |
1,459 |
|
$ |
1,557 |
|
$ |
1,491 |
|
$ |
1,478 |
High-Yield Pulp (external sales) |
$ |
504 |
|
$ |
489 |
|
$ |
802 |
|
$ |
606 |
|
$ |
685 |
|
|
|
|
|
|
|
|
|
|
|||||
Sales Volumes (thousands of metric tons) |
||||||||||||||
High Purity Cellulose |
|
259 |
|
|
217 |
|
|
265 |
|
|
955 |
|
|
918 |
Paperboard |
|
38 |
|
|
39 |
|
|
43 |
|
|
147 |
|
|
169 |
High-Yield Pulp (external sales) |
|
40 |
|
|
39 |
|
|
61 |
|
|
182 |
|
|
191 |
Rayonier Advanced Materials Inc. |
||||||||||||||||||
Reconciliation of Non-GAAP Measures |
||||||||||||||||||
(Unaudited) |
||||||||||||||||||
(in millions) |
||||||||||||||||||
EBITDA and Adjusted EBITDA by Segment(a) |
||||||||||||||||||
|
Three Months Ended December 31, 2023 |
|||||||||||||||||
|
High Purity
|
|
Paperboard |
|
High-Yield
|
|
Corporate |
|
Total |
|||||||||
Income (loss) from continuing operations |
$ |
(49 |
) |
|
$ |
9 |
|
$ |
(5 |
) |
|
$ |
(16 |
) |
|
$ |
(61 |
) |
Depreciation and amortization |
|
32 |
|
|
|
3 |
|
|
— |
|
|
|
1 |
|
|
|
36 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
— |
|
|
|
21 |
|
|
|
21 |
|
Income tax benefit |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(21 |
) |
|
|
(21 |
) |
EBITDA-continuing operations |
|
(17 |
) |
|
|
12 |
|
|
(5 |
) |
|
|
(15 |
) |
|
|
(25 |
) |
Asset impairment |
|
62 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
62 |
|
Adjusted EBITDA-continuing operations |
$ |
45 |
|
|
$ |
12 |
|
$ |
(5 |
) |
|
$ |
(15 |
) |
|
$ |
37 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended September 30, 2023 |
|||||||||||||||||
|
High Purity
|
|
Paperboard |
|
High-Yield
|
|
Corporate |
|
Total |
|||||||||
Income (loss) from continuing operations |
$ |
(5 |
) |
|
$ |
14 |
|
$ |
(6 |
) |
|
$ |
(30 |
) |
|
$ |
(27 |
) |
Depreciation and amortization |
|
32 |
|
|
|
3 |
|
|
1 |
|
|
|
— |
|
|
|
36 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
— |
|
|
|
19 |
|
|
|
19 |
|
Income tax benefit |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(5 |
) |
|
|
(5 |
) |
EBITDA-continuing operations |
|
27 |
|
|
|
17 |
|
|
(5 |
) |
|
|
(16 |
) |
|
|
23 |
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Adjusted EBITDA-continuing operations |
$ |
27 |
|
|
$ |
17 |
|
$ |
(5 |
) |
|
$ |
(15 |
) |
|
$ |
24 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Three Months Ended December 31, 2022 |
|||||||||||||||||
|
High Purity
|
|
Paperboard |
|
High-Yield
|
|
Corporate |
|
Total |
|||||||||
Income (loss) from continuing operations |
$ |
11 |
|
|
$ |
10 |
|
$ |
12 |
|
|
$ |
(29 |
) |
|
$ |
4 |
|
Depreciation and amortization |
|
34 |
|
|
|
4 |
|
|
1 |
|
|
|
— |
|
|
|
39 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
— |
|
|
|
15 |
|
|
|
15 |
|
Income tax benefit |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(2 |
) |
|
|
(2 |
) |
EBITDA-continuing operations |
|
45 |
|
|
|
14 |
|
|
13 |
|
|
|
(16 |
) |
|
|
56 |
|
Gain on debt extinguishment |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Adjusted EBITDA-continuing operations |
$ |
45 |
|
|
$ |
14 |
|
$ |
13 |
|
|
$ |
(17 |
) |
|
$ |
55 |
|
|
Year Ended December 31, 2023 |
|||||||||||||||||
|
High Purity
|
|
Paperboard |
|
High-Yield
|
|
Corporate |
|
Total |
|||||||||
Income (loss) from continuing operations |
$ |
(41 |
) |
|
$ |
39 |
|
$ |
(3 |
) |
|
$ |
(97 |
) |
|
$ |
(102 |
) |
Depreciation and amortization |
|
123 |
|
|
|
13 |
|
|
2 |
|
|
|
2 |
|
|
|
140 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
— |
|
|
|
69 |
|
|
|
69 |
|
Income tax benefit |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(32 |
) |
|
|
(32 |
) |
EBITDA-continuing operations |
|
82 |
|
|
|
52 |
|
|
(1 |
) |
|
|
(58 |
) |
|
|
75 |
|
Asset impairment |
|
62 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
62 |
|
Pension settlement loss |
|
— |
|
|
|
— |
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
Adjusted EBITDA-continuing operations |
$ |
144 |
|
|
$ |
52 |
|
$ |
(1 |
) |
|
$ |
(56 |
) |
|
$ |
139 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Year Ended December 31, 2022 |
|||||||||||||||||
|
High Purity
|
|
Paperboard |
|
High-Yield
|
|
Corporate |
|
Total |
|||||||||
Income (loss) from continuing operations |
$ |
33 |
|
|
$ |
39 |
|
$ |
17 |
|
|
$ |
(116 |
) |
|
$ |
(27 |
) |
Depreciation and amortization |
|
117 |
|
|
|
14 |
|
|
2 |
|
|
|
2 |
|
|
|
135 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
— |
|
|
|
64 |
|
|
|
64 |
|
Income tax expense |
|
— |
|
|
|
— |
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
EBITDA-continuing operations |
|
150 |
|
|
|
53 |
|
|
19 |
|
|
|
(49 |
) |
|
|
173 |
|
Pension settlement loss |
|
— |
|
|
|
— |
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
Severance |
|
— |
|
|
|
— |
|
|
— |
|
|
|
4 |
|
|
|
4 |
|
Gain on debt extinguishment |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
Adjusted EBITDA-continuing operations |
$ |
150 |
|
|
$ |
53 |
|
$ |
19 |
|
|
$ |
(45 |
) |
|
$ |
177 |
|
|
Annual Guidance |
||||||
|
2024 |
||||||
|
Low |
|
High |
||||
Loss from continuing operations |
$ |
(34 |
) |
|
$ |
(14 |
) |
Depreciation and amortization |
|
140 |
|
|
|
140 |
|
Interest expense, net |
|
75 |
|
|
|
75 |
|
Income tax benefit(b) |
|
(1 |
) |
|
|
(1 |
) |
EBITDA and Adjusted EBITDA-continuing operations |
$ |
180 |
|
|
$ |
200 |
|
| __________________________ | |
(a) |
EBITDA-continuing operations is defined as income (loss) from continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA-continuing operations is defined as EBITDA-continuing operations 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 - Continuing Operations(a) |
|||||||
|
Year Ended December 31, |
||||||
|
2023 |
|
2022 |
||||
Cash provided by operating activities-continuing operations |
$ |
136 |
|
|
$ |
69 |
|
Capital expenditures, net |
|
(83 |
) |
|
|
(104 |
) |
Adjusted free cash flow-continuing operations |
$ |
53 |
|
|
$ |
(35 |
) |
|
Annual Guidance Range |
||||||
|
2024 |
||||||
|
Low |
|
High |
||||
Cash provided by operating activities-continuing operations |
$ |
105 |
|
|
$ |
125 |
|
Capital expenditures, net |
|
(85 |
) |
|
|
(85 |
) |
Adjusted free cash flow-continuing operations |
$ |
20 |
|
|
$ |
40 |
|
| __________________________ | |
(a) |
Adjusted free cash flows-continuing operations is defined as cash provided by (used in) operating activities-continuing operations adjusted for capital expenditures, net of proceeds from the sale of assets and excluding strategic capital expenditures. Adjusted free cash flows 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) |
|||||||
|
December 31, |
||||||
|
2023 |
|
2022 |
||||
Debt due within one year |
$ |
25 |
|
|
$ |
14 |
|
Long-term debt |
|
752 |
|
|
|
839 |
|
Total debt |
|
777 |
|
|
|
853 |
|
Unamortized premium, discount and issuance costs |
|
20 |
|
|
|
6 |
|
Cash and cash equivalents |
|
(76 |
) |
|
|
(152 |
) |
Adjusted net debt |
|
721 |
|
|
|
707 |
|
Unsecured debt |
|
(23 |
) |
|
|
(327 |
) |
Net secured debt |
$ |
698 |
|
|
$ |
380 |
|
| __________________________ | |
(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 the amount of debt after the consideration of debt premium, discount and issuance costs, less cash and unsecured debt. |
Adjusted Income (Loss) from Continuing Operations(a) |
|||||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||||||||||||||||||
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||||||||||||||||||||
|
$ |
|
Per
|
|
$ |
|
Per
|
|
$ |
|
Per
|
|
$ |
|
Per
|
|
$ |
|
Per
|
||||||||||||||||||||
Income (loss) from continuing operations |
$ |
(61 |
) |
|
$ |
(0.94 |
) |
|
$ |
(27 |
) |
|
$ |
(0.41 |
) |
|
$ |
4 |
|
|
$ |
0.05 |
|
|
$ |
(102 |
) |
|
$ |
(1.57 |
) |
|
$ |
(27 |
) |
|
$ |
(0.42 |
) |
Asset impairment |
|
62 |
|
|
|
0.95 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
62 |
|
|
|
0.96 |
|
|
|
— |
|
|
|
— |
|
Pension settlement loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
0.04 |
|
|
|
1 |
|
|
|
0.01 |
|
Severance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
0.06 |
|
(Gain) loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.01 |
|
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(0.01 |
) |
Tax effect of adjustments |
|
(15 |
) |
|
|
(0.23 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15 |
) |
|
|
(0.24 |
) |
|
|
— |
|
|
|
— |
|
Adjusted income (loss) from continuing operations |
$ |
(14 |
) |
|
$ |
(0.22 |
) |
|
$ |
(26 |
) |
|
$ |
(0.40 |
) |
|
$ |
3 |
|
|
$ |
0.04 |
|
|
$ |
(53 |
) |
|
$ |
(0.81 |
) |
|
$ |
(23 |
) |
|
$ |
(0.36 |
) |
| __________________________ | |
(a) |
Adjusted income (loss) from continuing operations is defined as income (loss) from continuing operations 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/20240227639214/en/
Media
Ryan Houck
904-357-9134
Investors
Mickey
904-357-9162
Source: Rayonier Advanced Materials Inc.
FAQ
What were Rayonier Advanced Materials Inc.'s 2023 net sales?
What was the loss from continuing operations for 2023?
What was the Adjusted EBITDA for 2023?
What was the year-to-date cash provided by operating activities?
What was the total debt at the end of 2023?
What was the Adjusted Free Cash Flow year-to-date generation?
What is Rayonier Advanced Materials Inc.'s Adjusted EBITDA guidance for 2024?
What is the expected impact of the Adjusted EBITDA guidance for 2024?
