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]

Group 1 - Rayonier Advanced Materials reported a quarterly loss of $0.10 per share, better than the Zacks Consensus Estimate of a loss of $0.12, and an improvement from a loss of $0.22 per share a year ago, resulting in an earnings surprise of 16.67% [1] - The company posted revenues of $422 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.21%, with year-ago revenues also at $422 million [2] - Rayonier Advanced Materials shares have declined approximately 9.3% since the beginning of the year, contrasting with the S&P 500's decline of 1.8% [3] Group 2 - The earnings outlook for Rayonier Advanced Materials is mixed, with the current consensus EPS estimate for the coming quarter at -$0.01 on revenues of $410.8 million, and $0.29 on revenues of $1.74 billion for the current fiscal year [7] - The Zacks Industry Rank for Paper and Related Products is currently in the top 36% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [8]

Company Information - Rayonier Advanced Materials Inc. announced preliminary unaudited financial results for the year ended December 31, 2024[4]. - The company is listed on the New York Stock Exchange under the trading symbol RYAM[2]. - The company is incorporated in the State of Delaware with an I.R.S. Employer Identification Number of 46-4559529[1]. Financial Reporting - The report was issued on February 3, 2025, and is not deemed "filed" under the Securities Exchange Act[5]. - The financial results are detailed in Exhibit 99.1, which is incorporated by reference[4]. - The report includes a cover page interactive data file embedded within the Inline XBRL document[6]. - The press release announcing the financial results is furnished as Exhibit 99.1[4]. - The report was signed on behalf of the company by Gabriela Garcia on February 4, 2025[9]. Management - Gabriela Garcia serves as the Chief Accounting Officer and Vice President, Corporate Controller[9]. - The company has not indicated whether it is an emerging growth company[3].

Rayonier Advanced Materials (RYAM) is expected to report improvements in its top and bottom lines when it reports fourth-quarter 2024 results later this month.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The Zacks Consensus Estimate for RYAM’s fourth-quarter revenues is pegged at $436 million, indicating 3.3% growth from the year-ago reported figure. The Zacks Consensus Estimate for the bottom line has been unchanged in the past 60 days at a loss of 12 cents per share, suggesting a ...

Core Insights - The article emphasizes the importance of value investing as a successful strategy across various market conditions, focusing on fundamental analysis and traditional valuation metrics to identify undervalued stocks [2][3] Company Analysis - Rayonier Advanced Materials (RYAM) is highlighted as a strong candidate for value investors, currently holding a Zacks Rank of 1 (Strong Buy) and an A grade in the Value category [3][6] - RYAM has a Price-to-Sales (P/S) ratio of 0.36, significantly lower than the industry average of 0.81, indicating potential undervaluation [4] - The company also has a Price-to-Cash Flow (P/CF) ratio of 9.64, which is attractive compared to the industry average of 14.32, suggesting a favorable cash outlook [5][6] Valuation Metrics - The P/S ratio is favored by value investors as it is less susceptible to manipulation compared to earnings metrics, making it a more reliable performance indicator [4] - RYAM's P/CF ratio has fluctuated between 1.85 and 11.06 over the past year, with a median of 7.09, further supporting its undervaluation status [5]

Group 1 - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] - Fast-moving trending stocks can be risky if their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks with recent price momentum may be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2 - Rayonier Advanced Materials (RYAM) has shown a price increase of 11.5% over the past four weeks, indicating growing investor interest [4] - RYAM has gained 16.2% over the past 12 weeks and has a beta of 3.01, suggesting it moves significantly more than the market [5] - RYAM holds a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3 - RYAM has a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which attract more investors and drive prices higher [7] - The stock is trading at a Price-to-Sales ratio of 0.36, suggesting it is undervalued, as investors pay only 36 cents for each dollar of sales [7] - RYAM is positioned for further growth, supported by its momentum characteristics and reasonable valuation [8]

Core Viewpoint - Rayonier Advanced Materials (RYAM) is identified as a strong value stock, currently holding a Zacks Rank of 1 (Strong Buy) and an A for Value, indicating its potential for undervaluation in the market [3][7]. Valuation Metrics - RYAM has a Price-to-Book (P/B) ratio of 0.86, significantly lower than the industry average of 2.54, suggesting it is undervalued compared to its peers [4]. - The Price-to-Sales (P/S) ratio for RYAM stands at 0.38, compared to the industry average of 0.85, further indicating its potential undervaluation [5]. - RYAM's Price-to-Cash Flow (P/CF) ratio is 10.66, which is lower than the industry average of 13.74, reinforcing the notion that RYAM may be undervalued based on its cash flow outlook [6]. Investment Outlook - The combination of RYAM's favorable valuation metrics and strong earnings outlook positions it as an attractive investment opportunity for value investors [7].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Rayonier Advanced Materials (RYAM) Analysis - Rayonier Advanced Materials (RYAM) has shown a four-week price change of 11.3%, indicating growing investor interest [4] - Over the past 12 weeks, RYAM's stock has gained 33.2%, with a beta of 3.01, suggesting it moves 201% higher than the market [5] - RYAM has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] Group 3: Earnings and Valuation - RYAM has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - The stock is currently trading at a Price-to-Sales ratio of 0.40, suggesting it is undervalued, as investors pay only 40 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides RYAM, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 strategies tailored to help investors find winning stock picks [9]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2024 reached $51 million, a $27 million or 113% increase year-over-year, with margins nearly doubling to 12.7% [7] - Year-to-date adjusted free cash flow stands at $99 million, indicating strong cash generation capabilities [7] - Net debt decreased by $90 million from the same period in 2023, ending the quarter at $653 million, with net secured leverage at 2.8 times [18] Business Segment Data and Key Metrics Changes - High Purity Cellulose (HPC) segment saw EBITDA rise by $32 million or 119%, driven by higher specialty prices and volumes [8] - Paperboard segment experienced a $6 million EBITDA decline due to reduced sales prices and increased pulp costs [8] - High-Yield Pulp segment improved by $6 million in EBITDA, attributed to higher prices and productivity, despite a decrease in sales volumes [8][16] Market Data and Key Metrics Changes - HPC segment sales increased by $33 million or 11% to $325 million, with pricing up 13% [14] - Paperboard sales decreased by $2 million, driven by lower demand, with EBITDA margins reducing to 20% [15] - High-Yield Pulp sales increased by $3 million, with a 14% rise in sales prices, although sales volumes declined by 3% [16] Company Strategy and Development Direction - The company aims to optimize its balance sheet and explore the sale of non-core businesses while focusing on enhancing the earnings power of its core HPC business [28] - A key initiative includes reducing commodity exposure, with non-fluff commodity revenue dropping to 4% in Q3 2024 from 14% the previous year [30] - The company is advancing its biomaterials strategy, with the Fernandina bioethanol plant project expected to commence operations in late 2026 [31] Management's Comments on Operating Environment and Future Outlook - Management reiterated adjusted EBITDA guidance for the year at $205 million to $215 million, despite a $10 million impact from a fire incident [33] - The company expects cash interest expense for 2024 to be approximately $93 million, with a projected annual cash expense of just over $80 million post-refinancing [34] - Management anticipates lower overall costs in 2024, driven by reduced key input and logistics expenses, although some costs will rise due to maintenance and recovery efforts from the fire [40] Other Important Information - The company successfully refinanced its debt, raising $700 million in secured term loan financing, enhancing financial flexibility [19] - Corporate expenses increased by $5 million due to unfavorable foreign exchange rates and higher variable compensation [9] - The company received a $15 million IRS tax refund and $39 million from the sale of lumber duty rights, which will be partially offset by the impact of the Temiscaming HPC plant suspension [36] Q&A Session Summary Question: Exposure to China and European Construction Demand - Management noted that approximately 20% of total enterprise sales are exposed to China, primarily in acetate and some commodities [48] - Acetate demand remains stable, while the company is reducing exposure to viscose [50] - There is a modest uptick in ethers demand in Europe, attributed to restocking and underlying demand improvements [54] Question: Demand Environment for Acetates and CS - Acetate is expected to remain stable, while other cellulose specialties may see improved demand due to competitor shutdowns [58] - The company is working on price increases for cellulose specialties, but specifics on implementation are still early [60] Question: Spending on Jesup Repairs - Management indicated it is too early to estimate repair costs for the Jesup facility, as investigations are ongoing [63] Question: Temiscaming Plant Closure Impact - The benefit from bridge sales during the Temiscaming plant shutdown has diminished, but some uplift is expected in Q4 [66] Question: Growth in Biomaterials - The biomaterials strategy is central to the company's ESG objectives, leveraging existing resources to produce renewable products [70]