Rayonier Advanced Materials (RYAM) FY Conference June 11, 2025 11:30 AM ET Speaker0 We're gonna go through these these slides fairly quick, make sure we leave plenty of time for q and a at the end because I know there's probably a lot of questions of the market and then ProPetro in general. So our our current thesis of ProPetro is We have strong free cash flow. Currently, going forward, we've invested over a billion dollars since '22 to refresh our current assets. We purchased some new technology, and we di ...

Investor Presentation Second Quarter Equity Conferences 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 long-term impact 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 finan ...

Rayonier Advanced Materials (RYAM) Update Summary Company Overview - Rayonier Advanced Materials (RYAM) is undergoing a transformation to separate its high-margin cellulose specialties (CS) business from lower-margin commodity exposure, while also highlighting its emerging biomaterials platform [1][2] Key Points and Arguments - **New Segment Reporting**: The company has updated its reporting structure to better reflect its current operations and to provide clearer visibility into its high-margin segments [1][2][10] - **Long-term Strategy**: Confidence in the long-term strategy and value creation plan remains unchanged despite recent operational challenges and market noise [2][4] - **Operational Challenges**: The recent quarter faced challenges including higher input costs, operational difficulties, and weather-related disruptions, but these do not alter the company's long-term fundamentals [3][4] - **Price Increases**: The CS business outlook is strong, with a mid-single-digit price increase secured for 2025 while maintaining market share [5][16] - **Market Position**: RYAM holds approximately 40% market share in cellulose specialties, producing both hardwoods and softwoods, which provides a competitive advantage [6] - **Maintenance and Efficiency**: Major maintenance shutdowns have been completed, and the company is focusing on efficiency gains and strategic capital deployment to enhance margins [6][8] - **Biomaterials Growth**: The biomaterials platform is positioned to benefit from growing demand for renewable materials, with investments supported by secured green financing [7][8][23] - **EBITDA Targets**: The company aims for an annual EBITDA target of $325 million, with a focus on execution of its strategy [8] Financial Performance - **EBITDA Margins**: The CS segment reported a 23% EBITDA margin, while the emerging biomaterials segment achieved a 29% EBITDA margin, indicating strong profitability in these areas [11][23] - **Sales and Guidance**: For 2025, guidance for the CS business is set between $237 million to $245 million, with earnings expected to be back-end loaded due to operational recovery [18][25] - **Overall Guidance**: The overall EBITDA guidance has been adjusted to $175 million to $185 million, reflecting challenges in non-core segments and tariff impacts [25] Competitive Landscape - **Cellulose Specialties**: This segment is crucial, accounting for 56% of sales volumes, and competes on performance with a long qualification process for products [16][17] - **Commodity Products**: The company is minimizing exposure to lower-margin commodity products, focusing instead on higher-value offerings [20][21] Strategic Initiatives - **Joint Venture with BioNova**: The creation of BioNova aims to accelerate growth in biomaterials while avoiding shareholder dilution, leveraging project-specific funding [29][30] - **Capital Allocation**: RYAM plans to generate $5 million to $15 million in free cash flow for strategic investments, with a focus on maintaining a healthy balance sheet [37][40] Macro Trends and Risks - **Tailwinds**: Strong demand for sustainable materials and favorable green funding environments are expected to benefit RYAM's operations [47] - **Risks**: Trade policy uncertainty, inflation in raw materials, and logistics challenges are potential risks that could impact performance [48][49] Conclusion - RYAM is positioned for growth through strategic focus on high-margin segments and investments in biomaterials, while navigating operational challenges and market dynamics. The company remains committed to executing its long-term strategy and achieving its financial targets [8][51]

Rayonier Advanced Materials (RYAM) Q1 2025 Earnings Call May 07, 2025 09:00 AM ET Company Participants Mickey Walsh - VP of Investor Relations & TreasurerDe Lyle Bloomquist - President, CEO & DirectorMarcus Moeltner - CFO & Senior VP of FinanceMatt McKellar - Vice President Conference Call Participants Daniel Harriman - AnalystDmitry Silversteyn - Senior Research Analyst Operator Morning, and welcome to the Ryan First Quarter twenty twenty five Earnings Conference Call. As a reminder, this conference is bei ...

Financial Performance and Key Metrics - In Q1 2025, the company reported an 8% decline in revenue and a 67% reduction in adjusted EBITDA compared to Q1 2024, which was described as disappointing [5][9] - The company ended the quarter with liquidity of $272 million and a net secured debt reduction of $624 million, resulting in a net secured leverage ratio of 2.9 times covenant EBITDA [8][14] Business Segment Performance - In the Cellular Specialty segment, quarterly net sales decreased by $5 million to $201 million, with a 2% sales price increase offset by a 2% decline in sales volume [9][10] - The cellulose commodities segment saw net sales decline by $19 million to $75 million, with operating results improving by $6 million year over year to a loss of $13 million [10][11] - The new biomaterials segment maintained steady net sales at $7 million, with operating income flat at $2 million [11] - Paperboard segment net sales decreased by $4 million to $49 million, reflecting a 4% decrease in sales prices and a 3% decline in sales volumes [12] - High yield pulp segment net sales declined by $3 million to $31 million, with operating losses increasing to $7 million [12][13] Market Dynamics - The company faces significant challenges from tariffs, particularly a 25% tariff imposed by China on US-sourced cellulose commodities, affecting approximately $85 million of annual revenue [7][9] - The company is actively mitigating tariff risks through customer advocacy, market diversification, and operational adjustments [17][20] Strategic Direction and Industry Competition - The company plans to focus on tariff mitigation actions and will likely pause some strategic initiatives, including debt reduction, due to cash flow uncertainties [18][29] - The biomaterials growth strategy remains intact, with expectations for continued investment in US-centric projects [18][29] Management Commentary on Operating Environment and Future Outlook - Management acknowledged the challenging start to 2025 and ongoing uncertainties in the global market but expressed confidence in the resilience of the core business [74][75] - Adjusted EBITDA guidance for 2025 has been lowered to a range of $175 million to $185 million, reflecting various challenges including tariff impacts and production issues [21][22] Other Important Information - The company expects to see a modest improvement in paperboard volumes due to better market access within North America, although prices remain under pressure [27][50] - Corporate costs are projected to increase year over year, primarily due to a non-cash environmental reserve charge and foreign exchange headwinds [28] Q&A Session Summary Question: Conditions in the fluff pulp market with China's retaliatory tariffs - Management indicated that some Chinese customers continue to place orders but do not expect to absorb tariffs long-term, leading to a pivot towards non-tariff markets like India and Africa [31][34] Question: Evolution of volumes following Liberation Day - Management noted that volumes were lower than expected due to pre-orders and that orders resumed in May after a pause in April, with expectations for normalization by Q3 [39][43] Question: Evolution of paperboard guidance for 2025 - Management confirmed that the risk of tariffs on paperboard has reversed, and pricing is expected to decrease by approximately 5% due to increased supply [45][50]

Rayonier Advanced Materials (RYAM) came out with a quarterly loss of $0.49 per share versus the Zacks Consensus Estimate of a loss of $0.14. This compares to loss of $0.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -250%. A quarter ago, it was expected that this maker of cellulose products would post a loss of $0.12 per share when it actually produced a loss of $0.10, delivering a surprise of 16.67%.Over the last four qua ...

First Quarter 2025 Financial Presentation Materials May 7, 2025 Safe Harbor 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 a ...

Financial Performance - Net sales for Q1 2025 were $356 million, a decrease of $32 million or 8.2% from the prior year quarter[5]. - The company reported a net loss of $32 million, or $(0.49) per diluted share, compared to a net loss of $2 million, or $(0.02) per diluted share, in the prior year quarter[6]. - Adjusted EBITDA for Q1 2025 was $17 million, down $35 million from the prior year quarter, including a $12 million non-cash environmental charge[5]. - Overall EBITDA is projected to be $8 million to $10 million for the full year 2025[37]. - EBITDA is expected to approximate negative $5 million for the full year 2025, subject to fluctuations in tariff rates[35]. - The company reported a net loss of $32 million for the three months ended March 29, 2025, translating to a loss of $0.49 per diluted share[73]. - Adjusted net loss for the same period was $32 million, or $0.49 per diluted share, compared to an adjusted net loss of $6 million, or $0.10 per diluted share, for the previous quarter[73]. Cash Flow and Debt - Cash provided by operating activities for Q1 2025 was $40 million, with Adjusted Free Cash Flow generation of $10 million[5][26]. - Cash provided by operating activities increased to $40 million in Q1 2025, up from $12 million in Q1 2024[68]. - The company anticipates cash provided by operating activities to be between $90 million and $100 million for 2025[69]. - Total debt as of March 29, 2025, was $736 million, with a net secured debt of $624 million and a net secured leverage ratio of 2.9 times[5][28]. - Total debt increased to $736 million as of March 29, 2025, from $730 million at the end of 2024[71]. - Long-term debt remained stable at $707 million as of March 29, 2025, compared to $706 million at the end of 2024[71]. Sales and Pricing - Cellulose Specialties net sales decreased by $5 million, or 2%, compared to the prior year quarter, driven by a decrease in sales volumes[8]. - Average sales prices for Cellulose Specialties in 2025 are expected to increase by a mid single-digit percentage compared to 2024[32]. - Average sales price for Cellulose Specialties rose to $1,750 per metric ton, a 1.0% increase from $1,732 in the previous quarter[63]. - The average sales price for High-Yield Pulp decreased to $518 per metric ton, down from $523 in the previous quarter[63]. - Paperboard volumes are expected to increase in 2025, but prices are projected to decline year over year[39]. - High-Yield Pulp prices and volumes are expected to decline in 2025, with overall EBITDA approximating negative $20 million[41]. Future Projections and Strategies - The company projects 2025 Adjusted EBITDA to range between $175 million and $185 million, reflecting impacts from tariffs and operational challenges[4][29]. - Adjusted EBITDA for continuing operations is projected to be between $175 million and $185 million for 2025[66]. - Corporate costs are expected to approximate $70 million for the full year 2025, influenced by $12 million non-cash environmental reserves charges[42]. - The Company secured green capital of €67 million in Q4 2024 to advance its biomaterials strategy, aiming for over $70 million of EBITDA from this business[36]. - The company is exploring the potential sale of its Paperboard and High-Yield Pulp assets, but the process is currently on hold due to global trade uncertainty[30]. - The bioethanol facility in France has been operational since Q1 2024, and the Company is pursuing a similar facility in Fernandina Beach, Florida[38]. - The Company is evaluating investments in new facilities in Georgia and is working on permitting and engineering ahead of final investment decisions later this year[38]. Conference and Reporting - The Company will host a conference call on May 7, 2025, to discuss these results[43]. - Total assets decreased slightly to $2,118 million as of March 29, 2025, from $2,130 million at the end of 2024[58]. - The company incurred indefinite suspension charges of $3 million, impacting the previous quarter's results[73]. - Debt refinancing charges amounted to $10 million in the previous quarter, contributing to the adjusted net loss[73]. - The tax effect of adjustments was a reduction of $3 million in the previous quarter, affecting the overall financial performance[73].

Financial Data and Key Metrics Changes - Revenue for 2024 was $1.63 billion, a slight decline of $13 million compared to 2023 [9] - Operating income improved significantly to $39 million, an increase of $104 million over the prior year [10] - Adjusted EBITDA reached $222 million, marking an $83 million or 60% year-over-year increase [10] - Adjusted free cash flow stood at $128 million, an improvement of $75 million or 142% from 2023 [11] - Net secured debt decreased by $73 million, with a net secured leverage ratio improving to 2.7 times covenant EBITDA [11] Business Segment Data and Key Metrics Changes - High purity cellulose (HPC) segment sales declined by $11 million to $1.3 billion, despite a 5% net increase in overall pricing [19] - Paperboard sales grew by $9 million to $228 million, driven by higher volumes, but EBITDA declined by $4 million to $48 million due to lower pricing [22] - High yield pulp sales declined by $9 million to $127 million, with segment EBITDA declining by $4 million to a $5 million loss [23][24] Market Data and Key Metrics Changes - The company faced challenges in the paperboard market due to new capacity and tariffs, impacting pricing and demand [66][49] - Demand for cellulose specialties is expected to see mid-single-digit percentage price increases, while sales volumes are projected to decline slightly [46] Company Strategy and Development Direction - The company plans to implement new segment reporting in Q1 2025 to better reflect its evolving business and strategic direction [30] - Continued focus on debt reduction, with a target of $20 million in 2025, while exploring strategic capital investments [31] - Emphasis on advancing the biomaterials business, with significant projects planned for 2025 [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving EBITDA growth despite headwinds from tariffs and market uncertainties [17] - The company anticipates EBITDA in the range of $215 million to $235 million for 2025, factoring in the impact of tariffs [41] - Management highlighted the importance of maintaining financial discipline and focusing on high-return investments for long-term value creation [108] Other Important Information - The company incurred approximately $15 million in one-time benefits in 2024 that will not recur in 2025, impacting future profitability expectations [92] - The company is actively assessing the potential financial and operational effects of tariffs across its business segments [52] Q&A Session Summary Question: Capital allocation for 2025 - Management indicated that maintenance capital expenditures will be heavier in the first half of 2025 due to planned outages, while strategic capital spending will likely occur in the second half [64] Question: Sale of paperboard and high yield pulp assets - Management acknowledged challenges in selling these assets due to market conditions and tariff uncertainties, which have caused potential buyers to remain cautious [66] Question: Outlook for cellulose specialties volumes - Management noted a mid-single-digit decline in acetate demand due to destocking, while ethers demand is expected to improve [74] Question: Impact of tariffs on paperboard business - Management expects to mitigate much of the $35 million potential EBITDA impact from tariffs through various strategies, including passing costs to customers [98]

Revenue and Sales - In 2024, 66% of the company's revenue came from international sales, highlighting its significant reliance on global markets[100] - The company experienced product sales of $352 million to customers in China, with $251 million of that from U.S.-manufactured products[104] - The ten largest customers accounted for approximately 35% of the company's 2024 revenue, indicating a concentration risk[107] - The company generated $233 million in product sales from Canadian exports to the U.S. in 2024, amidst ongoing trade disputes[105] - Net sales decreased by $13 million in 2024 to $1,630 million compared to $1,643 million in 2023, driven by lower sales prices in High Purity Cellulose and Paperboard segments[198] Cost and Pricing Pressures - The company faced significant price volatility in key raw materials, such as caustic soda, which is critical for its high purity cellulose business[98] - Inflationary pressures in 2022 led to broad-based increases in costs, affecting key inputs like wood, energy, and chemicals[99] - Price increases of up to 10 percent for cellulose specialties products were announced in September 2024, driven by market dynamics and cost inflation[185] - The company experienced significant price volatility in chemicals during 2021 and 2022, impacting supply due to weather events in the southeastern U.S.[114] Operational Challenges - Trade tensions between the U.S. and China have previously impacted the company's operating income, particularly due to tariffs on wood pulp[104] - The company has experienced disruptions in operations due to geopolitical conflicts, impacting supply chains and costs[91] - The high-yield pulp business is cyclical, influenced by market conditions, leading to potential production curtailments[95] - The company relies on third-party transportation services, and unfavorable changes in costs or availability could adversely affect operations[120] Financial Performance - Operating income improved by $104 million in 2024, reaching $39 million compared to a loss of $65 million in 2023, aided by the indefinite suspension of operations at Temiscaming[199] - Adjusted EBITDA for continuing operations increased to $222 million in 2024 from $139 million in 2023, reflecting a $95 million increase driven by operational improvements and favorable foreign exchange rates[240] - Adjusted free cash flow for continuing operations rose to $128 million in 2024, up from $53 million in 2023, attributed to stronger operating results and lower capital expenditures[243] Debt and Financing - As of December 31, 2024, the company's total indebtedness was $730 million, which poses significant risks to its financial condition and operational flexibility[146] - The company secured term loan financing of $700 million to refinance existing debt and pay related fees and expenses[185] - Total debt decreased to $730 million in 2024 from $777 million in 2023, maintaining a debt to capital ratio of 51%[224] Environmental and Regulatory Risks - Regulatory developments may lead to significant reductions in timber availability for commercial harvest, impacting wood fiber pricing and supply[112] - The company anticipates potential increases in costs due to regulatory measures addressing climate change, which may materially affect its financial results[137] - Environmental laws and regulations may impose significant costs and restrict operations, leading to increased compliance-related capital expenditures over time[132] - The company may incur substantial costs related to environmental remediation and liabilities, which could adversely impact its financial results[135] Strategic Initiatives - The company has an active R&D program aimed at developing new products and applications, but success is not guaranteed[125] - The company is exploring new sustainable products and applications, including a 2G bioethanol facility in France and a planned bioethanol plant at Fernandina Beach[141] - The company reorganized its High Purity Cellulose segment into three separate businesses: Cellulose Specialties, Cellulose Commodities, and a new Biomaterials business, effective January 2025[186] Workforce and Labor Relations - 69% of the company's global workforce was unionized as of December 31, 2024, which could lead to higher compensation costs if labor negotiations are unfavorable[122] Tax and Deferred Assets - As of December 31, 2024, the company recognized $334 million of net deferred tax assets (DTAs) on its consolidated balance sheets[119] - The company has $627 million of net operating losses (NOLs) in Canada, with $334 million of net deferred tax assets (DTAs) recognized on the consolidated balance sheet as of December 31, 2024[262] Risk Management - The company is exposed to foreign currency exchange fluctuations, with significant operations in Canada and France affecting its financial results[102] - The company manages foreign currency exposures through balancing assets and liabilities and may use foreign currency forward contracts to minimize volatility[268] - The company is exposed to market risks, including changes in interest rates, currency, and commodity prices, and may use derivatives to mitigate these risks[267]