Group 1 - Rayonier Advanced Materials reported a quarterly loss of $0.49 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.14, marking an earnings surprise of -250% [1] - The company posted revenues of $356 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 8.39%, and down from $388 million in the same quarter last year [2] - Rayonier Advanced Materials shares have declined approximately 48.4% year-to-date, contrasting with the S&P 500's decline of -3.9% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $420.1 million, and for the current fiscal year, it is $0.11 on revenues of $1.67 billion [7] - The Paper and Related Products industry, to which Rayonier Advanced Materials belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Revenue for Q1 2025 was $356 million, a decrease of $32 million compared to Q1 2024 [15] - Adjusted EBITDA for Q1 2025 was $17 million, a decrease of $35 million compared to Q1 2024 [15] - Adjusted Free Cash Flow generation was $10 million, an increase of $26 million from Q1 2024 [15] - The company is providing Adjusted EBITDA guidance of $175-$185 million and Adjusted Free Cash Flow guidance of $5-$15 million for 2025 [15] Segment Performance - Cellulose Specialties net sales were $201 million in Q1 2025 [16] - Cellulose Commodities net sales were $75 million in Q1 2025 [22] - Biomaterials net sales were $7 million in Q1 2025 [28] - Paperboard net sales decreased by $4 million, driven by a 4% decline in sales prices and a 3% decline in sales volumes [38] - High-Yield Pulp net sales decreased by $3 million, driven by a 7% decrease in sales prices and a 4% decrease in sales volumes [43] Capital Structure and Liquidity - Adjusted Net Debt was $653 million, a $90 million reduction from Q1 2024 [50] - Net Secured Debt was $624 million, a $97 million reduction from Q1 2024 [50] - Total liquidity was $272 million, including $130 million of cash [48, 50] Tariff Impact and Mitigation - The company faces tariff exposure on Cellulose Specialties (~$160 million revenue), Cellulose Commodities (~$85 million revenue), and Paperboard (~$175 million revenue) [57] - Mitigation strategies include customer advocacy, market diversification, and operational adjustments [52, 56]

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]

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].

Core Viewpoint - Rayonier Advanced Materials (RYAM) is anticipated to show improvements in both revenue and loss figures in its upcoming fourth-quarter 2024 results [1] Financial Performance - The Zacks Consensus Estimate for RYAM's fourth-quarter revenues is $436 million, reflecting a 3.3% increase from the previous year [2] - The expected loss for the fourth quarter is 12 cents per share, an improvement from the loss of 22 cents per share reported in the same quarter last year [2] - RYAM's net sales for 2024 decreased by 0.2% to $1.639 billion, with fourth-quarter sales projected at $431 million, indicating a 2% year-over-year growth from $422 million in Q4 2023 [9] - The company reported a loss from continuing operations of $43 million in 2024, improving from a loss of $102 million in the prior year, with an anticipated loss of $17 million for Q4 2024 [10] - Adjusted EBITDA for 2024 was $222 million, a 60% increase year-over-year, with an expected adjusted EBITDA of $51 million for Q4 2024, suggesting a 38% increase from the previous year's quarter [11] Market Dynamics - RYAM has been enhancing its product mix and managing operating costs effectively, leading to improved results [12] - Average sales prices for cellulose specialties are expected to rise, driven by increased demand and the closure of a competitor's plant [12] - Lower paperboard prices in Q4 are expected to be offset by increased sales volumes, while high-yield-pulp prices are anticipated to decline [13] - An isolated fire at the company's plant in Jesup, GA, is expected to impact earnings by $10 million, although the plant resumed operations in less than two weeks [13] Stock Performance - RYAM shares have increased by 60% over the past year, outperforming the industry growth of 40.1% [14]

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]