Updates 2023 EBITDA and Raises Free Cash
Flow Guidance
- Loss from continuing operations for the second quarter of $16
million, an improvement of $9 million, or 36 percent, over prior
year quarter
- Adjusted EBITDA from continuing operations for the second
quarter of $27 million, down $7 million, or 21 percent, from prior
year quarter
- Year-to-date cash provided by operating activities of $84
million; total debt of $834 million
- Adjusted Free Cash Flow generation of $52 million; Net Debt
reduced to $682 million
- Updates 2023 Adjusted EBITDA guidance to $185 million to $200
million
- Raises 2023 Adjusted Free Cash Flow guidance to $55 million to
$70 million
Rayonier Advanced Materials Inc. (NYSE:RYAM) (the “Company”)
reported a net loss of $17 million, or $(0.26) per diluted share,
for the quarter ended July 1, 2023, compared to a net loss of $23
million, or $(0.36) per diluted share, for the prior year quarter.
Loss from continuing operations for the quarter ended July 1, 2023
was $16 million, or $(0.24) per diluted share, compared to a loss
from continuing operations of $25 million, or $(0.39) per diluted
share, for the prior year quarter.
“Results for the second quarter reflected shifting market
conditions across several key end markets. Despite facing volume
pressure due to destocking in certain areas of our Cellulose
Specialties and Paperboard businesses, we successfully increased
prices by 13 percent and 4 percent, respectively, from the previous
year, demonstrating our commitment to prioritizing value over
volume. Moreover, we are experiencing downward pressure on
commodity prices across all our segments, which intensified during
the quarter. We are reacting by taking downtime at our High-Yield
Pulp plant to reduce costs, minimize losses and monetize
inventories. We are also reviewing strategic options with respect
to our non-fluff High Purity Cellulose commodity businesses,
specifically including viscose and paper pulp products,” said De
Lyle W. Bloomquist, RYAM’s President and Chief Executive Officer.
“Consequently, we are revising down our 2023 Adjusted EBITDA
guidance, but raising our free cash flow guidance as we reduce
capital expenditures and monetize additional working capital. The
lower EBITDA guidance is driven primarily by a softer outlook for
commodity pricing and lower sales volumes in Cellulose Specialties
and Paperboard. Overall, reductions in commodity prices are
impacting our 2023 EBITDA guidance by approximately $45 million,
which we expect to partially offset with proactive cost reduction
measures of nearly $40 million that is expected to be realized in
the second half of the year.”
“Subsequent to the quarter's end, we successfully raised a new
$250 million secured term loan, allowing us to redeem the remaining
$318 million of aggregate principal amount from our 2024 senior
unsecured notes. Through these transactions, we will further reduce
gross debt by an additional $68 million. In order to service the
increasing fixed charges from the higher cost of debt, we are
increasing the investment hurdles for strategic capital investments
and expect to primarily fund these investments through low-cost
green project capital and free cash flow. Our long-term strategy
remains focused on steady margin growth from cellulose specialties
products while driving new value through investments in our
emerging biomaterials business,” concluded Mr. Bloomquist.
Second Quarter 2023 Operating Results from Continuing
Operations
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
Six Months Ended
(in millions)
July 1, 2023
April 1, 2023
June 25, 2022
July 1, 2023
June 25, 2022
High Purity Cellulose
$
300
$
374
$
302
$
674
$
583
Paperboard
48
59
63
107
117
High-Yield Pulp
44
42
40
86
62
Eliminations
(7
)
(8
)
(6
)
(15
)
(11
)
Net sales
$
385
$
467
$
399
$
852
$
751
Operating results were comprised of the following for the
periods presented:
Three Months Ended
Six Months Ended
(in millions)
July 1, 2023
April 1, 2023
June 25, 2022
July 1, 2023
June 25, 2022
High Purity Cellulose
$
—
$
13
$
7
$
13
$
(1
)
Paperboard
6
10
10
16
16
High-Yield Pulp
1
7
(2
)
8
(2
)
Corporate
(14
)
(13
)
(18
)
(27
)
(32
)
Operating income (loss)
$
(7
)
$
17
$
(3
)
$
10
$
(19
)
High Purity Cellulose
Net sales for the second quarter decreased $2 million, or 1
percent, to $300 million compared to the same prior year quarter.
Included in the current and prior year quarters were $22 million
and $24 million, respectively, of other sales primarily from
bio-based energy and lignosulfonates. Sales prices decreased 4
percent during the current quarter, driven by a 4 percent decrease
in commodity products prices, partially offset by a 13 percent
increase in cellulose specialties prices. Total sales volumes
increased 4 percent during the current quarter, driven by a 72
percent increase in commodity products volumes, partially offset by
a 27 percent decrease in cellulose specialties volumes. Sales
volumes for cellulose specialties were negatively impacted by
market-driven demand declines primarily due to significant customer
destocking, particularly those customers associated with
construction markets.
Net sales for the six months ended July 1, 2023 increased $91
million, or 16 percent, to $674 million compared to the same prior
year period. Included in the current and prior year six-month
periods were $45 million and $51 million, respectively, of other
sales primarily from bio-based energy and lignosulfonates. Sales
prices increased 2 percent during the current period, driven by
increases in cellulose specialties and commodity products prices of
15 percent and 1 percent, respectively. Total sales volumes
increased 16 percent during the current period, driven by a 69
percent increase in commodity products volumes, partially offset by
a 12 percent decrease in cellulose specialties volumes. Sales
volumes for cellulose specialties were negatively impacted by
market-driven demand declines due to significant customer
destocking, particularly in construction markets.
Operating income for the three and six months ended July 1, 2023
decreased $7 million and increased $14 million, respectively,
compared to the same prior year periods. The current quarter
decrease was driven by the lower cellulose specialties sales
volumes and commodity products sales prices and increased labor and
maintenance costs due to inflation, partially offset by higher
cellulose specialties sales prices and commodity products sales
volumes and decreased costs of certain inputs. The increase during
the six-month period was driven by the higher cellulose specialties
and commodity products sales prices and commodity products sales
volumes and decreased costs of certain inputs, partially offset by
the decrease in cellulose specialties sales volumes and higher
labor and maintenance costs due to inflation. Included in operating
income in the three and six months ended July 1, 2023 was the
recognition of a $3 million benefit from payroll tax credit
carryforwards.
Compared to the first quarter of 2023, operating income
decreased $13 million, driven by lower sales volumes for both
cellulose specialties and commodity products and lower commodity
products sales prices, partially offset by higher cellulose
specialties sales prices and the income recognized related to the
payroll tax credit carryforwards. Total sales prices decreased 2
percent, driven by a 6 percent decrease in commodity products sales
prices that was partially offset by a 3 percent increase in
cellulose specialties sales prices. Total sales volumes decreased
19 percent, including decreases in cellulose specialties and
commodity products sales volumes of 24 percent and 15 percent,
respectively, driven by market-driven demand declines due to
significant customer destocking and lower production principally
reflecting the scheduled outages of the Jesup and Temiscaming
plants during the quarter.
Paperboard
Net sales for the second quarter decreased $15 million, or 24
percent, to $48 million compared to the same prior year quarter.
Net sales for the six months ended July 1, 2023 decreased $10
million, or 9 percent, to $107 million compared to the same prior
year period. Sales volumes decreased 27 percent and 18 percent
during the three- and six-month periods, respectively, driven by
lower productivity and customer destocking. Sales prices increased
4 percent and 11 percent, respectively, partially offsetting the
sales volumes decreases, driven by continued demand for sustainable
packaging.
Operating income for the three and six months ended July 1, 2023
decreased $4 million and was flat, respectively, compared to the
prior year periods. The current quarter decrease was driven by the
lower sales volumes, partially offset by the higher sales prices.
In the year-to-date period, the higher sales prices were offset by
the lower sales volumes and higher purchased pulp, chemicals and
energy costs.
Compared to the first quarter of 2023, operating income
decreased $4 million, driven by 4 percent and 16 percent decreases
in sales prices and sales volumes, respectively, due to mix and
customer destocking.
High-Yield Pulp
Net sales for the second quarter increased $4 million, or 10
percent, to $44 million compared to the same prior year quarter.
Net sales for the six months ended July 1, 2023 increased $24
million, or 39 percent, to $86 million compared to the same prior
year period. Sales prices increased 5 percent and 18 percent and
sales volumes increased 9 percent and 21 percent during the three-
and six-month periods, respectively, driven by stronger demand,
increased productivity and easing logistics constraints.
Operating results for the three and six months ended July 1,
2023 improved $3 million and $10 million, respectively, compared to
the prior year periods, driven by the higher sales prices and sales
volumes. In the year-to-date period, the higher sales prices and
sales volumes were partially offset by increased wood and logistics
costs and higher labor and maintenance costs due to inflation.
Compared to the first quarter of 2023, operating income
decreased $6 million, driven by an 18 percent decrease in sales
prices due to market supply and demand imbalance, partially offset
by a 40 percent increase in sales volumes due to an improvement in
logistics.
Corporate
Operating loss for the three and six months ended July 1, 2023
decreased $4 million and $5 million, respectively, driven by lower
variable stock-based compensation costs and lower severance,
partially offset by unfavorable foreign exchange rates in the
current year periods. Compared to the first quarter of 2023, the
operating loss increased $1 million.
Non-Operating Income & Expense
Included in other income, net in the three and six months ended
July 1, 2023 was a gain on a passive land sale and a net gain on
debt extinguishment, which were partially offset by unfavorable
foreign exchange rates. Also included in the six-month period was a
pension settlement loss of $2 million.
The three and six months ended June 25, 2022 included a $4
million loss and a $5 million gain, respectively, associated with
the GreenFirst common shares received in connection with the sale
of lumber and newsprint assets.
Income Taxes
The effective tax rate on the loss from continuing operations
for the three and six months ended July 1, 2023 was a benefit of 18
percent and 32 percent, respectively. The 2023 effective tax rates
differed from the federal statutory rate of 21 percent primarily
due to disallowed interest deductions in the U.S. and nondeductible
executive compensation, offset by U.S. tax credits,
return-to-accrual adjustments related to previously filed tax
returns and an excess tax benefit on vested stock compensation.
The effective tax rate on the loss from continuing operations
for the three and six months ended June 25, 2022 was an expense of
18 percent and 12 percent, respectively. The 2022 effective tax
rates differed from the federal statutory rate of 21 percent
primarily due to disallowed interest deductions in the U.S. and
nondeductible executive compensation, partially offset by U.S. tax
credits and tax return-to-accrual adjustments.
Cash Flows & Liquidity
For the six months ended July 1, 2023, the Company generated
operating cash flows of $84 million, which were driven by increased
cash inflows from working capital, partially offset by payments on
deferred energy liabilities associated with Tartas plant
operations.
For the six months ended July 1, 2023, the Company used $54
million in its investing activities related to net capital
expenditures, which included $22 million of strategic capital
spending focused on enhancing reliability and cost efficiency.
For the six months ended July 1, 2023, the Company used $26
million in its financing activities primarily for the repayment of
long-term debt and the repurchase of common stock to satisfy tax
withholding requirements related to the issuance of stock under
Company incentive stock plans.
The Company ended the quarter with $272 million of global
liquidity, including $157 million of cash, borrowing capacity under
the ABL Credit Facility of $109 million and $6 million of
availability under the factoring facility in France.
On July 20, 2023, the Company secured term loan financing of
$250 million and received net proceeds of $243 million after
original issue discount, which will be used, together with
approximately $85 million in cash, to redeem the remaining $318
million in aggregate principal balance of its senior unsecured
notes due 2024 and pay fees and expenses related to the
transaction. The term loan matures in July 2027 and bears interest
at a rate per annum equal to three-month Term SOFR plus 8.00
percent.
Market Assessment
This market assessment represents the Company’s best current
estimate of its business segments’ future performance.
High Purity Cellulose
Average sales prices for cellulose specialties in 2023 are
expected to be in the high single-digit percent higher than average
2022 sales prices, while sales volumes are expected to decrease
from prior year due to softness in sales orders driven principally
by significant customer destocking. Market demand for commodity
products remains resilient but at lower prices than the first half
of the year, in line with industry forecasts. Commodity sales
volumes are expected to continue to increase through the end of
2023. The prices for certain inputs have come off the 2022 highs
but are expected to remain significantly elevated versus pre-COVID
pandemic levels.
Paperboard
Paperboard prices are expected to moderate over the balance of
the year but remain elevated from 2022 levels, while sales volumes
are expected to improve in the second half of the year. Raw
material prices are expected to reduce further as pulp markets
decline.
High-Yield Pulp
High-yield pulp prices have declined due to soft demand and new
paper pulp capacity ramping up. Prices are expected to decline
overall in 2023 despite an expected uptick in the fourth quarter,
in line with industry forecasts for the global paper pulp market.
Sales volumes are expected to decline in the coming quarter as the
Company takes downtime in the third quarter due to market
conditions.
2023 Guidance
Overall, loss from continuing operations is expected to be
approximately $17 to $2 million, with Adjusted EBITDA of
approximately $185 to $200 million for 2023. The Company expects to
spend approximately $95 million on custodial capital expenditures
and approximately $30 million on discretionary strategic capital
expenditures, net of financing. Strategic capital may be modulated
as necessary to support Adjusted Free Cash Flow. The Company is
targeting $55 million of benefit from working capital to support
Adjusted Free Cash Flow for the year. Overall, the Company expects
to generate $55 to $70 million of Adjusted Free Cash Flow in
2023.
A Sustainable Future
The Company continues to focus on growing its bio-based product
offering and expects to grow its biomaterials sales and increase
overall margins over time. The Company’s bioethanol facility at its
Tartas, France plant is under construction and is anticipated to be
operational in early 2024. The total estimated cost of the project
is approximately $41 million, with $26 million to be spent in 2023.
The Company plans to utilize $28 million of low-cost green loans to
help fund the project, including $8 million already raised, and $4
million in grants. The project is expected to provide $8 million to
$10 million of annual incremental EBITDA, based on current exchange
rates, beginning in 2025.
Conference Call Information
RYAM will host a conference call and live webcast at 9:00 a.m.
ET on Wednesday, August 9, 2023 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, August
23, 2023. The replay dial-in number within the U.S. is
877-660-6853, international is 201-612-7415, Conference ID:
13739806.
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 U.S., Canada and France, RYAM employs
approximately 2,500 people and generated $1.7 billion of revenues
in 2022. 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
RYAM’s 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,” “believe,”
“intend,” “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. While
we believe these forward-looking statements are reasonable when
made, 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 these expectations will be attained and it
is possible 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 July
1, 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-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 actually occur, the
Company’s business, financial condition or operating results, 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 the ongoing conflict between Russia and Ukraine or other
geopolitical conflicts. The Company is subject to risks associated
with epidemics and pandemics, including the COVID-19 pandemic,
which has had, and may continue to 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 raw material and energy
availability and prices, 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 2022
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
major 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 plants,
and the cost to repair or replace equipment, as well as the
associated downtime, could materially adversely affect the
Company’s business. 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 cyberattacks or
cybersecurity breaches 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. 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’ percentage of
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 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
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
Six Months Ended
July 1, 2023
April 1, 2023
June 25, 2022
July 1, 2023
June 25, 2022
Net sales
$
385
$
467
$
399
$
852
$
751
Cost of sales
(370
)
(430
)
(372
)
(800
)
(718
)
Gross margin
15
37
27
52
33
Selling, general and administrative
expense
(18
)
(19
)
(28
)
(37
)
(48
)
Foreign exchange gain (loss)
(2
)
—
2
(2
)
1
Other operating expense, net
(2
)
(1
)
(4
)
(3
)
(5
)
Operating income (loss)
(7
)
17
(3
)
10
(19
)
Interest expense
(16
)
(15
)
(16
)
(31
)
(33
)
Gain (loss) on GreenFirst equity
securities
—
—
(4
)
—
5
Other income (expense), net
4
(2
)
3
2
4
Loss from continuing operations before
income taxes
(19
)
—
(20
)
(19
)
(43
)
Income tax (expense) benefit
3
3
(4
)
6
(5
)
Equity in loss of equity method
investment
—
(1
)
(1
)
(1
)
(1
)
Income (loss) from continuing
operations
(16
)
2
(25
)
(14
)
(49
)
Income (loss) from discontinued
operations, net of taxes
(1
)
—
2
(1
)
1
Net income (loss)
$
(17
)
$
2
$
(23
)
$
(15
)
$
(48
)
Basic and Diluted earnings per common
share
Income (loss) from continuing
operations
$
(0.24
)
$
0.02
$
(0.39
)
$
(0.22
)
$
(0.77
)
Income (loss) from discontinued
operations
(0.02
)
—
0.03
(0.02
)
0.02
Net income (loss) per common share
$
(0.26
)
$
0.02
$
(0.36
)
$
(0.24
)
$
(0.75
)
Shares used in determining EPS
Basic EPS
65,226,344
64,504,200
63,898,761
64,865,272
63,837,292
Diluted EPS
65,226,344
66,596,653
63,898,761
64,865,272
63,837,292
Rayonier Advanced Materials
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in millions)
July 1, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
157
$
152
Other current assets
483
538
Property, plant and equipment, net
1,152
1,151
Other assets
514
507
Total assets
$
2,306
$
2,348
Liabilities and Stockholders’
Equity
Debt due within one year
$
81
$
14
Other current liabilities
329
340
Long-term debt
753
839
Non-current environmental liabilities
159
160
Other liabilities
170
166
Total stockholders’ equity
814
829
Total liabilities and stockholders’
equity
$
2,306
$
2,348
Rayonier Advanced Materials
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(in millions)
Six Months Ended
July 1, 2023
June 25, 2022
Operating Activities
Net loss
$
(15
)
$
(48
)
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
(Income) loss from discontinued
operations
1
(1
)
Depreciation and amortization
68
61
Other
(1
)
10
Changes in working capital and other
assets and liabilities
31
(58
)
Cash provided by (used in) operating
activities
84
(36
)
Investing Activities
Capital expenditures, net
(54
)
(87
)
Cash used in investing
activities-continuing operations
(54
)
(87
)
Cash provided by investing
activities-discontinued operations
—
43
Cash used in investing activities
(54
)
(44
)
Financing Activities
Changes in debt
(21
)
(21
)
Other
(5
)
(1
)
Cash used in financing activities
(26
)
(22
)
Change in cash and cash equivalents
4
(102
)
Net effect of foreign exchange on cash and
cash equivalents
1
(3
)
Balance, beginning of period
152
253
Balance, end of period
$
157
$
148
Rayonier Advanced Materials
Inc.
Sales Volumes and Average
Prices
(Unaudited)
Three Months Ended
Six Months Ended
July 1, 2023
April 1, 2023
June 25, 2022
July 1, 2023
June 25, 2022
Average Sales Prices ($ per metric
ton)
High Purity Cellulose
$
1,301
$
1,322
$
1,355
$
1,313
$
1,288
Paperboard
$
1,498
$
1,568
$
1,439
$
1,536
$
1,384
High-Yield Pulp (external sales)
$
633
$
769
$
603
$
691
$
586
Sales Volumes (thousands of metric
tons)
High Purity Cellulose
214
265
206
479
414
Paperboard
32
38
44
70
85
High-Yield Pulp (external sales)
60
43
55
103
85
Rayonier Advanced Materials
Inc.
Reconciliation of Non-GAAP
Measures
(Unaudited)
(in millions)
EBITDA and Adjusted EBITDA by
Segment(a)
Three Months Ended July 1,
2023
High Purity
Cellulose
Paperboard
High-Yield
Pulp
Corporate
Total
Income (loss) from continuing
operations
$
—
$
6
$
1
$
(23
)
$
(16
)
Depreciation and amortization
28
4
—
1
33
Interest expense, net
—
—
—
14
14
Income tax benefit
—
—
—
(3
)
(3
)
EBITDA-continuing operations
28
10
1
(11
)
28
Gain on debt extinguishment
—
—
—
(1
)
(1
)
Adjusted EBITDA-continuing
operations
$
28
$
10
$
1
$
(12
)
$
27
Three Months Ended April 1,
2023
High Purity
Cellulose
Paperboard
High-Yield
Pulp
Corporate
Total
Income (loss) from continuing
operations
$
13
$
10
$
7
$
(28
)
$
2
Depreciation and amortization
31
3
1
—
35
Interest expense, net
—
—
—
15
15
Income tax benefit
—
—
—
(3
)
(3
)
EBITDA-continuing operations
44
13
8
(16
)
49
Pension settlement loss
—
—
—
2
2
Adjusted EBITDA-continuing
operations
$
44
$
13
$
8
$
(14
)
$
51
Three Months Ended June 25,
2022
High Purity
Cellulose
Paperboard
High-Yield
Pulp
Corporate
Total
Income (loss) from continuing
operations
$
6
$
11
$
(1
)
$
(41
)
$
(25
)
Depreciation and amortization
30
3
1
—
34
Interest expense, net
—
—
—
16
16
Income tax expense
—
—
—
4
4
EBITDA-continuing operations
36
14
—
(21
)
29
Pension settlement loss
—
—
—
1
1
Severance
—
—
—
4
4
Adjusted EBITDA-continuing
operations
$
36
$
14
$
—
$
(16
)
$
34
Six Months Ended July 1,
2023
High Purity
Cellulose
Paperboard
High-Yield
Pulp
Corporate &
Other
Total
Income (loss) from continuing
operations
$
13
$
16
$
8
$
(51
)
$
(14
)
Depreciation and amortization
59
7
1
1
68
Interest expense, net
—
—
—
29
29
Income tax benefit
—
—
—
(6
)
(6
)
EBITDA-continuing operations
72
23
9
(27
)
77
Pension settlement loss
—
—
—
2
2
Gain on debt extinguishment
—
—
—
(1
)
(1
)
Adjusted EBITDA-continuing
operations
$
72
$
23
$
9
$
(26
)
$
78
Six Months Ended June 25,
2022
High Purity
Cellulose
Paperboard
High-Yield
Pulp
Corporate &
Other
Total
Income (loss) from continuing
operations
$
(1
)
$
17
$
(1
)
$
(64
)
$
(49
)
Depreciation and amortization
53
7
1
—
61
Interest expense, net
—
—
—
32
32
Income tax expense
—
—
—
5
5
EBITDA-continuing operations
52
24
—
(27
)
49
Pension settlement loss
—
—
—
1
1
Severance
—
—
—
4
4
Adjusted EBITDA-continuing
operations
$
52
$
24
$
—
$
(22
)
$
54
Annual Guidance Range
2023
Low
High
Loss from continuing operations
$
(17
)
$
(2
)
Depreciation and amortization
140
140
Interest expense, net
65
65
Income tax benefit(b)
(3
)
(3
)
EBITDA and Adjusted EBITDA-continuing
operations
$
185
$
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
the settlement of certain pension plans, gain on debt
extinguishment and other items. 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 Flows - Continuing
Operations(a)
Six Months Ended
July 1, 2023
June 25, 2022
Cash provided by (used in) operating
activities-continuing operations
$
84
$
(36
)
Capital expenditures, net
(32
)
(71
)
Adjusted free cash flows-continuing
operations
$
52
$
(107
)
Annual Guidance Range
2023
Low
High
Cash provided by operating
activities-continuing operations
$
150
$
165
Capital expenditures, net
(95
)
(95
)
Adjusted free cash flows-continuing
operations
$
55
$
70
__________________________
(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(a)
July 1, 2023
December 31, 2022
Debt due within one year
$
81
$
14
Long-term debt
753
839
Total debt
834
853
Unamortized debt premium, discount and
issuance costs
5
6
Cash and cash equivalents
(157
)
(152
)
Adjusted net debt
$
682
$
707
__________________________
(a)
Adjusted net debt is defined as the amount
of debt after the consideration of debt premium, discount and
issuance costs, less cash.
Adjusted Income (Loss) from Continuing
Operations(a)
Three Months Ended
Six Months Ended
July 1, 2023
April 1, 2023
June 25, 2022
July 1, 2023
June 25, 2022
$
Per
Diluted
Share
$
Per
Diluted
Share
$
Per
Diluted
Share
$
Per
Diluted
Share
$
Per
Diluted
Share
Income (loss) from continuing
operations
$
(16
)
$
(0.24
)
$
2
)
$
0.02
)
$
(25
)
$
(0.39
)
$
(14
)
$
(0.22
)
$
(49
)
$
(0.77
)
Pension settlement loss
—
—
2
0.03
1
0.02
2
0.04
1
0.02
Severance
—
—
—
—
4
0.06
—
—
4
0.06
Gain on debt extinguishment
(1
)
(0.01
)
—
—
—
—
(1
)
(0.01
)
—
—
Tax effect of adjustments
—
—
—
—
—
—
—
—
—
—
Adjusted income (loss) from continuing
operations
$
(17
)
$
(0.25
)
$
4
$
0.05
$
(20
)
$
(0.31
)
$
(13
)
$
(0.19
)
$
(44
)
$
(0.69
)
__________________________
(a)
Adjusted income (loss) from continuing
operations is defined as income (loss) from continuing operations
adjusted net of tax for the settlement of certain pension plans,
gain on debt extinguishment and other items.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230808058571/en/
Media Ryan Houck 904-357-9134
Investors Mickey Walsh 904-357-9162
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