Sylvamo (NYSE: SLVM), the world’s paper company, is releasing
third quarter 2023 earnings.
Financial Highlights – Third Quarter vs. Second
Quarter
- Net income from continuing operations of $58 million ($1.37 per
diluted share) vs. $49 million ($1.14 per diluted share)
- Adjusted operating earnings1 (non-GAAP) of $72 million ($1.70
per diluted share) vs. $49 million ($1.14 per diluted share)
- Adjusted EBITDA2 (non-GAAP) of $158 million (18% margin) vs.
$124 million (14% margin)
- Cash provided by operating activities from continuing
operations of $197 million vs. $77 million
- Free cash flow3 (non-GAAP) of $155 million vs. $33 million
Commercial and Operational Highlights – Third Quarter vs.
Second Quarter
- Price and mix decreased by $55 million due primarily to lower
paper prices in Europe and on exports from Latin America, as well
as lower global pulp prices
- Volume increased by $6 million due to increases in Latin
America and North America
- Operations and other costs improved by $1 million due to better
operating and supply chain results offset by $13 million in higher
unabsorbed fixed costs from increased economic downtime
- Planned maintenance outage expenses decreased by $55
million
- Input costs improved by $27 million driven by favorable fiber,
chemical and transportation costs
Fourth Quarter Outlook
- Adjusted EBITDA of $90 million to $110 million
- Compared to the third quarter:
- Price and mix are expected to decrease by $20 million to $25
million, primarily reflecting prior paper price decreases in Europe
and unfavorable geographic mix in Latin America and North
America
- Volume is projected to improve by $20 million to $25 million,
with seasonally stronger volume in Latin America and positive
trends in North America
- Operations and other costs are expected to increase by $25
million to $30 million due primarily to seasonally higher costs in
Europe and North America
- Input and transportation costs are projected to increase by $5
million to $10 million, mainly due to seasonally higher energy
- Total planned maintenance outage expenses are expected to
increase by $25 million
Management Summary from Chairman and Chief Executive Officer
Jean-Michel Ribiéras
Third quarter earnings were higher than our outlook. We took
measures to maximize free cash flow, including selling and
administrative cost reductions, shrinking working capital and
adjusting the timing of capital spending. We now expect free cash
flow for the year to be more than $270 million.
By the end of the third quarter, we returned $85 million to
shareowners this year. In the third quarter, we also deposited $60
million in escrow to remove cash return limits in our credit
agreement. As of Nov. 9, we have returned $110 million this year
and plan to return a total of $125 million in 2023.
Our board of directors increased our regular dividend by 20%,
declaring a fourth quarter $0.30 per share dividend and a special
$0.30 per share dividend. We paid both, totaling $25 million, Oct.
17. The board also authorized an incremental $150 million share
repurchase program. At the end of the third quarter, the May 2022
and September 2023 authorizations collectively had $167 million
remaining. We will continue to look for opportunities to repurchase
shares at attractive prices.
Sylvamo competes as a low-cost producer of commodity products
sold in mature-demand, cyclical markets. In the spirit of
continuous improvement, we initiated a cost reduction program
called Project Horizon. The project will streamline our
organization and cost structures and make us a leaner, stronger
company.
Before inflation, we are targeting run rate savings of at least
$110 million by the end of 2024. Approximately two-thirds of the
target will come from operational improvements in our mills and
supply chains. The balance will consist of selling and
administrative cost reductions, including the elimination of
approximately 150 positions, or nearly 7% of our global salaried
workforce.
Since becoming an independent company just over two years ago,
we note a few key milestones:
- Improved our financial position by reducing debt 35%
- Generated more than $1.3 billion in adjusted EBITDA (19%
margin) and $568 million in free cash flow
- Returned $200 million in cash to our shareowners
We remain focused on uncoated freesheet and will create
long-term value through our talented teams, iconic brands and
low-cost mills in favorable locations. Sylvamo is a cash flow
story. We will continue to leverage our strengths to drive high
returns on invested capital, generate free cash flow and use that
cash to increase shareowner value by maintaining a strong financial
position, returning cash to shareowners and reinvesting in our
business.
1 Adjusted Operating Earnings (non-GAAP)
are net income (loss) (GAAP) excluding discontinued operations, net
of tax and net special items. Management uses this measure to focus
on ongoing operations and believes it is useful to investors
because it enables them to perform meaningful comparisons of past
and present combined operating results. The Company believes that
using this information, along with net income (loss), provides for
a more complete analysis of the results of operations. Net income
(loss) is the most directly comparable GAAP measure. For more
information regarding net special items, see the information under
the heading Effects of Net Special Items and the Condensed
Consolidated Statement of Operations and related notes included
later in this release.
2 Adjusted EBITDA (non-GAAP) is net income
(loss) (GAAP) excluding discontinued operations, net of tax, plus
the sum of income taxes, net interest expense (income),
depreciation, amortization and cost of timber harvested, transition
service agreement expense, stock-based compensation, and, when
applicable for the periods reported, net special items. Management
uses this measure in managing the operating performance of our
business and believes that Adjusted EBITDA and Adjusted EBITDA
Margin provide investors and analysts meaningful insights into our
operating performance and Adjusted EBITDA is a relevant metric for
the third-party debt. The Company believes that using this
information, along with net income (loss), provides for a more
complete analysis of the results of its operations. Net income
(loss) is the most directly comparable GAAP measure. For more
information regarding net special items, see the information under
the heading Effects of Net Special Items and the Condensed
Consolidated Statement of Operations and related notes included
later in this release.
3 Free Cash Flow is a non-GAAP measure and
the most directly comparable GAAP measure is cash provided by
operating activities from continuing operations. Management
utilizes this measure in connection with managing our business and
believes that Free Cash Flow is useful to investors as a liquidity
measure because it measures the amount of cash generated that is
available, after reinvesting in the business, to maintain a strong
balance sheet and service debt, and return cash to shareowners. It
should not be inferred that the entire Free Cash Flow amount is
available for discretionary expenditures. Free Cash Flow also
enables investors to perform meaningful comparisons between past
and present periods.
Select Financial
Measures
(In millions)
Third Quarter 2023
Second Quarter 2023
Third Quarter 2022
Net Sales
$
897
$
919
$
968
Net Income from Continuing Operations
58
49
109
Net Income
58
49
57
Business Segment Operating Profit
116
82
175
Adjusted Operating Earnings
72
49
112
Adjusted EBITDA
158
124
216
Cash Provided By Operating Activities From
Continuing Operations
197
77
146
Free Cash Flow
155
33
114
Segment Information
Sylvamo uses business segment operating profit to measure the
earnings performance of its businesses and is calculated as set
forth in footnote (d) under the "Sales and Earnings by Business
Segment" table (page 8). Third quarter 2023 net sales by business
segment and operating profit by business segment compared with the
second quarter of 2023 and the third quarter of 2022 are as
follows:
Business Segment
Results
(In millions)
Third Quarter 2023
Second Quarter 2023
Third Quarter 2022
Net Sales by Business Segment
Europe
$
184
$
210
$
130
Latin America
246
250
270
North America
476
474
589
Inter-segment Sales
(9
)
(15
)
(21
)
Net Sales
$
897
$
919
$
968
Operating Profit by Business
Segment
Europe
$
(14
)
$
(11
)
$
19
Latin America
55
48
58
North America
75
45
98
Business Segment Operating
Profit
$
116
$
82
$
175
Operating profits in the third quarter of 2023:
Europe - $(14) million compared with $(11) million
in the second quarter of 2023. Earnings were slightly lower as
lower planned maintenance outages and lower input costs were more
than offset by lower price and mix and higher unabsorbed costs due
to economic downtime.
Latin America - $55 million compared with $48 million in
the second quarter of 2023. Earnings were higher as lower operating
and input costs and lower planned maintenance outages more than
offset lower export price and mix.
North America - $75 million compared with $45
million in the second quarter of 2023. Earnings were higher as
lower operating and input costs, higher volumes and lower planned
maintenance outages more than offset lower price and mix and higher
unabsorbed costs due to economic downtime.
Effective Tax Rate
The reported effective tax rate for continuing operations for
the third quarter of 2023 was 36%, compared to 30% for the second
quarter of 2023. The higher rate for the third quarter was due to a
change in estimated Annual Effective Tax Rate (AETR) to reduce the
expected benefit of foreign tax attributes and also a mix of
earnings in our regions.
Excluding net special items, the effective tax rate for the
third quarter of 2023 was 33%, compared with 30% for the second
quarter of 2023.
The effective tax rate excluding net special items is a non-GAAP
financial measure and is calculated by adjusting the income tax
provision from continuing operations and rate to exclude the tax
effect of net special items. Management believes that this
presentation provides useful information to investors by providing
a more meaningful comparison of the income tax rate between past
and present periods.
Effects of Net Special Items
Net special items related to continuing operations in the third
quarter of 2023 amounted to a net after-tax charge of $14 million
($0.33 per diluted share) compared with net after-tax income of $0
million ($0.00 per diluted share) in the second quarter of
2023.
Earnings Webcast
The company will host an audio webcast at 10 a.m. EST / 9 a.m.
CST. All interested parties are invited to listen at
investors.sylvamo.com.
Parties who wish to participate should call +1-877-336-4440
(U.S.) or +1-409-207-6984 (international) and use access code
763504. Participants should call in no later than 9:45 a.m. EST /
8:45 a.m. CST.
Replays are available at investors.sylvamo.com for one year and
by phone for 90 days, beginning at approximately 2 p.m. EST / 1
p.m. CST the day of the call. To listen to the replay by phone,
call +1-866-207-1041 (U.S.) or +1-402-970-0847 (international) and
use access code 7814753.
About Sylvamo
Sylvamo Corporation (NYSE: SLVM) is the world's paper company
with mills in Europe, Latin America and North America. Our vision
is to be the employer, supplier and investment of choice. We
transform renewable resources into papers that people depend on for
education, communication and entertainment. Headquartered in
Memphis, Tennessee, we employ more than 6,500 colleagues. Net sales
for 2022 were $3.6 billion. For more information, please visit
Sylvamo.com.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, including the
information under the headings "Fourth Quarter Outlook" and
"Management Summary from Chairman and Chief Executive Officer
Jean-Michel Ribiéras." Any or all forward-looking statements may
turn out to be incorrect, and our actual actions and results could
differ materially from what they express or imply, because they
involve known and unknown risks, uncertainties and other factors,
many of which are beyond our control. These risks, uncertainties,
and other factors include those disclosed in the heading "Risk
Factors" in our Annual Report on Form 10-K for the year ended Dec.
31, 2022, filed with the U.S. Securities and Exchange Commission
(SEC) and in our subsequent filings with the SEC, available on our
website, Sylvamo.com. These forward-looking statements reflect our
current expectations, and we undertake no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
SYLVAMO CORPORATION
Condensed Consolidated
Statement of Operations
Preliminary and Unaudited
(In millions, except per share
amounts)
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Net Sales
$
897
$
968
$
919
$
2,757
$
2,701
Costs and Expenses
Cost of products sold
665
(a)
687
(e)
721
2,055
(a)
1,965
(e)
Selling and administrative expenses
89
(b)
80
(f)
76
248
(b)
227
(f)
Depreciation, amortization and cost of
timber harvested
36
30
34
105
94
Taxes other than payroll and income
taxes
7
6
6
19
18
Interest expense (income), net
9
18
12
28
(d)
52
Income From Continuing Operations
Before Income Taxes
91
147
70
302
345
Income tax provision
33
(c)
38
(g)
21
98
(c)
97
(g)
Net Income From Continuing
Operations
58
109
49
204
248
Discontinued operations, net of
tax
—
(52
)
(h)
—
—
(224
)
(i)
Net Income (Loss)
$
58
$
57
$
49
$
204
$
24
Basic Earnings Per Share
Income from continuing operations
$
1.39
$
2.47
$
1.16
$
4.83
$
5.62
Discontinued operations, net of taxes
—
(1.18
)
—
—
(5.08
)
Net earnings (loss)
$
1.39
$
1.29
$
1.16
$
4.83
$
0.54
Diluted Earnings Per Share
Income from continuing operations
$
1.37
$
2.44
$
1.14
$
4.77
$
5.58
Discontinued operations, net of taxes
—
(1.16
)
—
—
(5.04
)
Net earnings (loss)
$
1.37
$
1.28
$
1.14
$
4.77
$
0.54
Average Shares of Common Stock
Outstanding - Diluted
42
45
43
43
44
The accompanying notes are an
integral part of this condensed consolidated statement of
operations.
Three Months and Nine Months Ended
September 30, 2023
(a)
Includes pre-tax loss of $3 million ($2
million after taxes) for the three and nine months ended September
30, 2023, for certain severance costs related to our salaried
workforce and incremental expense of $9 million ($7 million after
taxes) for the nine months ended September 30, 2023, related to the
impact of the step-up of acquired Nym�lla inventory sold during the
first quarter.
(b)
Includes a pre-tax loss of $10 million ($8
million after taxes) for the three months and nine months ended
September 30, 2023, for certain severance costs related to our
salaried workforce. Also includes pre-tax loss of $3 million ($2
million after taxes) for the three months ended September 30, 2023,
and a pre-tax loss of $8 million ($6 million after taxes) for the
nine months ended September 30, 2023, for transaction costs related
to the Nym�lla acquisition. Finally, includes a pre-tax loss of $4
million ($3 million after taxes) for the nine months ended
September 30, 2023 for professional and legal fees related to
negotiations resulting in a shareholder cooperation agreement.
(c)
Includes a $2 million tax expense for the
three and nine months ended September 30, 2023 related to the
write-off of certain deferred tax assets.
(d)
Includes $9 million ($6 million after
taxes) of interest income related to tax settlements and a pre-tax
loss of $5 million ($4 million after taxes) related to debt
extinguishment costs for the nine months ended September 30,
2023.
Three Months and Nine Months
Ended September 30, 2022
(e)
Includes pre-tax loss of $3 million ($2
million after taxes) for the three months ended September 30, 2022,
and a pre-tax loss of $4 million ($3 million after taxes) for the
nine months ended September 30, 2022, for one-time costs associated
with the spin-off.
(f)
Includes pre-tax loss of $7 million ($5
million after taxes) for the three months ended September 30, 2022,
and a pre-tax loss of $19 million ($14 million after taxes) for the
nine months ended September 30, 2022, for one-time costs associated
with the spin-off.
(g)
Includes a $4 million tax benefit related
to the reversal of a valuation allowance on foreign deferred tax
assets.
(h)
Includes a pre-tax charge of $78 million
($78 million after taxes) to reserve for the elimination of the
cumulative foreign currency translation loss related to our Russian
operations.
(i)
Includes a pre-tax charge of $234 million
($234 million after taxes) to reserve for the elimination of the
cumulative foreign currency translation loss related to our Russian
operations and a pre-tax charge of $68 million ($57 million after
taxes) related to the impairment of our Russian fixed assets.
SYLVAMO CORPORATION
Reconciliation of Net Income
to Adjusted Operating Earnings
Preliminary and Unaudited
(In millions, except per share
amounts)
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Net Income (Loss)
$
58
$
57
$
49
$
204
$
24
Less: Discontinued operations, net of
tax
—
(52
)
—
—
(224
)
Net income From Continuing
Operations
58
109
49
204
248
Add back: Net special items expense
(income)
14
3
—
25
13
Adjusted Operating Earnings
$
72
$
112
$
49
$
229
$
261
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Diluted Earnings (Loss) Per Common
Share as Reported
$
1.37
$
1.28
$
1.14
$
4.77
$
0.54
Less: Discontinued operations, net of
tax
—
(1.16
)
—
—
(5.04
)
Continuing Operations
1.37
2.44
1.14
4.77
5.58
Add back: Net special items expense
(income)
0.33
0.07
—
0.58
0.29
Adjusted Operating Earnings Per
Share
$
1.70
$
2.51
$
1.14
$
5.35
$
5.87
SYLVAMO CORPORATION
Sales and Earnings by Business
Segment
Preliminary and Unaudited
(In millions)
Net Sales by Business Segment
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Europe
$
184
$
130
$
210
$
624
$
382
Latin America
246
270
250
718
734
North America
476
589
474
1,455
1,646
Inter-segment Sales
(9
)
(21
)
(15
)
(40
)
(61
)
Net Sales
$
897
$
968
$
919
$
2,757
$
2,701
Operating Profit by Business
Segment
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Europe
$
(14
)
$
19
$
(11
)
$
(2
)
$
38
Latin America
55
58
48
149
156
North America
75
98
45
217
226
Business Segment Operating
Profit
$
116
$
175
$
82
$
364
$
420
Income from Continuing Operations
Before Income Taxes
$
91
$
147
$
70
$
302
$
345
Interest expense (income), net
9
18
12
28
(b)
52
Net special items expense (income)
16
(a)
10
(c)
—
34
(a)
23
(c)
Business Segment Operating Profit
(d)
$
116
$
175
$
82
$
364
$
420
Three Months and Nine Months Ended September 30, 2023
(a)
Includes pre-tax loss of $13 million ($10
million after taxes) for the three months and nine months ended
September 30, 2023 for certain severance costs related to our
salaried workforce. Also includes a pre-tax loss of $3 million ($2
million after taxes) for the three months ended September 30, 2023,
and a pre-tax loss of $8 million ($6 million after taxes) for the
nine months ended September 30, 2023, for transaction costs related
to the Nym�lla acquisition. Finally, includes a pre-tax loss of $4
million ($3 million after taxes) for professional and legal fees
related to negotiations resulting in a shareholder cooperation
agreement and incremental expense of $9 million ($7 million after
taxes) related to the impact of the step-up of acquired Nym�lla
inventory sold during the first quarter for the nine months ended
September 30, 2023.
(b)
Includes $9 million ($6 million after
taxes) of interest income related to tax settlements and a pre-tax
loss of $5 million ($4 million after taxes) related to debt
extinguishment costs for the nine months ended September 30,
2023.
Three Months and Nine Months
Ended September 30, 2022
(c)
Includes pre-tax loss of $10 million ($7
million after taxes) for the three months ended September 30, 2022,
and a pre-tax loss of $23 million ($17 million after taxes) for the
nine months ended September 30, 2022, for one-time costs associated
with the spin-off.
(d)
As set forth in the chart above, business
segment operating profit is defined as income from continuing
operations before income taxes, but excluding net interest expense
(income) and net special items. Business segment operating profit
is a measure reported to our management for purposes of making
decisions about allocating resources to our business segments and
assessing the performance of our business segments.
Reconciliation of Net Income
to Adjusted EBITDA and Adjusted EBITDA Margin
Preliminary and Unaudited
(In millions)
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Net Income (Loss)
$
58
$
57
$
49
$
204
$
24
Less: Discontinued operations, net of
tax
—
(52
)
—
—
(224
)
Net Income From Continuing
Operations
58
109
49
204
248
Adjustments:
Income tax provision
33
38
21
98
97
Interest expense (income), net
9
18
12
28
52
Depreciation, amortization and cost of
timber harvested
36
30
34
105
94
Stock-based compensation
6
5
8
21
16
Transition service agreement expense
—
6
—
—
21
Net special items expense (income)
16
10
—
34
23
Adjusted EBITDA
$
158
$
216
$
124
$
490
$
551
Net Sales
$
897
$
968
$
919
$
2,757
$
2,701
Adjusted EBITDA Margin
17.6
%
22.3
%
13.5
%
17.8
%
20.4
%
Adjusted EBITDA and Adjusted EBITDA
Margin by Business Segment
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Adjusted EBITDA
Europe
$
(5
)
$
24
$
(3
)
$
23
$
54
Latin America
74
74
67
204
209
North America
89
118
60
263
288
Total Business Segment Adjusted
EBITDA
$
158
$
216
$
124
$
490
$
551
Net Sales (excluding discontinued
operations and inter-segment sales eliminations)
Europe
$
184
$
130
$
210
$
624
$
382
Latin America
246
270
250
718
734
North America
476
589
474
1,455
1,646
Total Business Segment Net
Sales
$
906
$
989
$
934
$
2,797
$
2,762
Adjusted EBITDA Margin
Europe
(3
)%
18
%
(1
)%
4
%
14
%
Latin America
30
%
27
%
27
%
28
%
28
%
North America
19
%
20
%
13
%
18
%
17
%
SYLVAMO CORPORATION
Condensed Consolidated Balance
Sheet
Preliminary and Unaudited
(In millions)
September 30, 2023
December 31, 2022
Assets
Current Assets
Cash and temporary investments
$
194
$
360
Restricted cash
60
—
Accounts and notes receivable, net
423
450
Contract assets
25
30
Inventories
456
364
Other current assets
28
39
Total Current Assets
1,186
1,243
Plants, Properties and Equipment, Net
949
817
Forestlands
346
322
Goodwill
134
128
Right of Use Assets
39
35
Deferred Charges and Other Assets
131
165
Total Assets
$
2,785
$
2,710
Liabilities and Equity
Current Liabilities
Accounts payable
$
382
$
453
Notes payable and current maturities of
long-term debt
53
29
Accrued payroll and benefits
66
81
Other current liabilities
173
165
Total Current Liabilities
674
728
Long-Term Debt
946
1,003
Deferred Income Taxes
202
183
Other Liabilities
127
118
Equity
Common stock, $1 par value, 200.0 shares
authorized, 44.5 shares and 44.2 shares issued and 41.5 shares and
42.6 shares outstanding at September 30, 2023 and December 31,
2022, respectively
45
44
Paid-In Capital
45
25
Retained Earnings
2,185
2,029
Accumulated Other Comprehensive Loss
(1,298
)
(1,338
)
977
760
Less: Common stock held in treasury, at
cost, 2.9 shares and 1.6 shares at September 30, 2023 and December
31, 2022, respectively
(141
)
(82
)
Total Equity
836
678
Total Liabilities and Equity
$
2,785
$
2,710
Condensed Consolidated
Statement of Cash Flows
Preliminary and Unaudited
(In millions)
Nine Months Ended
September 30,
2023
2022
Operating Activities
Net income from continuing operations
$
204
$
248
Depreciation, amortization, and cost of
timber harvested
105
94
Deferred income tax provision (benefit),
net
4
4
Stock-based compensation
21
16
Changes in operating assets and
liabilities and other
Accounts and notes receivable
99
(81
)
Inventories
(46
)
(76
)
Accounts payable and accrued
liabilities
(122
)
18
Other
72
53
Cash Provided By Operating Activities from
Continuing Operations
337
276
Cash Provided By Operating Activities from
Discontinued Operations, net
—
20
Cash Provided By Operating
Activities
337
296
Investment Activities
Invested in capital projects
(147
)
(91
)
Acquisition of business
(167
)
—
Cash Provided By (Used for) Investment
Activities from Continuing Operations
(314
)
(91
)
Cash Provided By (Used for) Investment
Activities from Discontinued Operations, net
—
(5
)
Cash Provided By (Used for) Investment
Activities
(314
)
(96
)
Financing Activities
Dividends paid
(32
)
(5
)
Issuance of debt
443
—
Reduction of debt
(482
)
(174
)
Repurchases of common stock
(53
)
—
Other
(7
)
(2
)
Cash Provided By (Used for) Financing
Activities from Continuing Operations
(131
)
(181
)
Cash Provided By (Used for) Financing
Activities from Discontinued Operations, net
—
(1
)
Cash Provided By (Used for) Financing
Activities
(131
)
(182
)
Effect of Exchange Rate Changes on
Cash
2
27
Change in Cash Included in Assets Held
for Sale
—
41
Change in Cash, Temporary Investments
and Restricted Cash
(106
)
4
Cash, Temporary Investments and
Restricted Cash
Beginning of the period
360
159
End of the period
$
254
$
163
SYLVAMO CORPORATION
Reconciliation of Cash
Provided by Operations to Free Cash Flow
Preliminary and Unaudited
(In millions)
Three Months Ended
September 30,
Three Months Ended
June 30,
2023
Nine Months Ended
September 30,
2023
2022
2023
2022
Cash Provided By Operating Activities
From Continuing Operations
$
197
$
146
$
77
$
337
$
276
Adjustments:
Cash invested in capital projects
(42
)
(32
)
(44
)
(147
)
(91
)
Free Cash Flow
$
155
$
114
$
33
$
190
$
185
Reconciliation of Net Income
From Continuing Operations to Adjusted EBITDA - Since
Spin-off
Preliminary and Unaudited
(In millions)
Three Months Ended
December 31,
2021
Twelve Months Ended
December 31,
2022
Nine Months Ended
September 30,
2023
October 1, 2021
Through
September 30, 2023
Net Income From Continuing
Operations
$
29
$
336
$
204
$
569
Adjustments:
Income tax provision
28
131
98
257
Interest expense (income), net
18
69
28
115
Depreciation, amortization and cost of
timber harvested
31
125
105
261
Stock-based compensation
4
20
21
45
Transition services agreement expense
7
23
—
30
Net Special items expense
6
17
34
57
Adjusted EBITDA
$
123
$
721
$
490
$
1,334
Net Sales
$
778
$
3,628
$
2,757
$
7,163
Adjusted EBITDA Margin
15.8
%
19.9
%
17.8
%
18.6
%
Reconciliation of Cash
Provided by Operations to Free Cash Flow - Since Spin-off
Preliminary and Unaudited
(In millions)
Three Months Ended
December 31,
2021
Twelve Months Ended
December 31,
2022
Nine Months Ended
September 30,
2023
October 1, 2021
Through
September 30, 2023
Cash Provided By Operating Activities
From Continuing Operations
$
131
$
418
$
337
$
886
Adjustments:
Cash invested in capital projects
(22
)
(149
)
(147
)
$
(318
)
Free Cash Flow
$
109
$
269
$
190
$
568
SYLVAMO CORPORATION
Reconciliation of Net Income
From Continuing Operations to Adjusted EBITDA - 2023
Outlook
Estimates
(In millions)
Three Months Ended
December 31,
2023
Net Income From Continuing
Operations
$18 - $32
Adjustments:
Income tax provision
8 - 14
Interest expense (income), net
13
Depreciation, amortization and cost of
timber harvested
37
Stock-based compensation
6
Net special items expense
8
Adjusted EBITDA
$90 - $110
Reconciliation of Cash
Provided by Operations to Free Cash Flow - 2023 Outlook
Estimates
(In millions)
Twelve Months Ended
December 31,
2023
Cash Provided By Operating Activities
From Continuing Operations
> $485
Adjustments:
Cash invested in capital projects
(< $215)
Free Cash Flow
> $270
The non-GAAP financial measures presented in this release have
limitations as analytical tools and should not be considered in
isolation or as a substitute for an analysis of our results
calculated in accordance with GAAP. In addition, because not all
companies use identical calculations, the Company’s presentation of
non-GAAP measures in this release may not be comparable to
similarly titled measures disclosed by other companies, including
companies in the same industry as Sylvamo.
Management believes certain non-U.S. GAAP financial measures,
when used in conjunction with information presented in accordance
with U.S. GAAP, can facilitate a better understanding of the impact
of various factors and trends on the Company’s financial condition
and results of operations. Management also uses these non-U.S. GAAP
financial measures in making financial, operating and planning
decisions and in evaluating the Company’s performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109634528/en/
Investor Contact: Hans Bjorkman, 901-519-8030,
hans.bjorkman@sylvamo.com Media Contact: Adam Ghassemi,
901-519-8115, adam.ghassemi@sylvamo.com
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