Rayonier Advanced Materials(US:RYAM)2025-11-04 21:52Financial Performance - Net sales for Q3 2025 were $353 million, down $48 million or 12% from the prior year quarter[6]. - Loss from continuing operations for Q3 2025 was $4 million, an improvement of $29 million from the prior year quarter[7]. - Adjusted EBITDA for Q3 2025 was $42 million, down $9 million from the prior year quarter, with full year 2025 expected to be between $135 million and $140 million[6][32]. - RYAM's overall EBITDA for the full year 2025 is expected to approximate $227 million to $230 million, subject to additional impacts from tariffs[38]. - Gross margin for the three months ended September 27, 2025, was $34 million, down from $44 million in the same period last year, indicating a decline of 23%[63]. - The net loss attributable to Rayonier Advanced Materials Inc. for the nine months ended September 27, 2025, was $399 million, compared to a net loss of $23 million for the same period in 2024[63]. - Basic and diluted loss per share from continuing operations for the three months ended September 27, 2025, was $0.07, compared to a loss of $5.48 for the same period in 2024[63]. - For the nine months ended September 27, 2025, the total income from continuing operations attributable to RYAM was $110 million, down from $133 million in the same period last year[73]. - The company reported an adjusted free cash flow of $(83) million for the nine months ended September 27, 2025, compared to $99 million in the same period last year[76]. - EBITDA attributable to RYAM for the three months ended September 27, 2025, was $43 million, down from $66 million in the previous quarter[72]. Debt and Cash Flow - Total debt stood at $794 million with a net secured debt of $729 million, resulting in a covenant net secured leverage ratio of 4.1 times[6]. - Long-term debt increased to $764 million as of September 27, 2025, compared to $706 million at the end of 2024, marking an increase of 8%[65]. - Total debt increased to $794 million as of September 27, 2025, compared to $730 million on December 31, 2024, reflecting a rise of 8.8%[78]. - Adjusted Net Debt rose to $760 million from $653 million, indicating a significant increase of 16.4%[78]. - Cash and cash equivalents decreased to $(77) million from $(125) million, showing an improvement of 38.4%[78]. - Cash provided by operating activities for the nine months ended September 27, 2025, was a negative $8 million, a significant decrease from $149 million in the same period last year[67]. Sales and Market Performance - Cellulose Specialties net sales decreased by $28 million or 12% year-over-year, driven by a 17% decrease in sales volumes[9]. - Sales prices in the Cellulose Specialties segment are anticipated to be mid single-digit percentage above the prior year average, while sales volumes are expected to decline approximately 10%[37]. - Average sales price for Cellulose Specialties was $1,873 per metric ton for the three months ended September 27, 2025, up from $1,753 in the same period last year, indicating an increase of 7%[70]. - The sales volume of Cellulose Commodities for the three months ended September 27, 2025, was 93,000 metric tons, a decrease from 95,000 metric tons in the same period last year, representing a decline of 2%[70]. - Paperboard sales volumes are expected to remain soft, with an overall EBITDA expected to approximate $13 million for the full year 2025[44]. Strategic Initiatives - The company targets approximately $30 million in annual cost savings by 2026, with potential additional savings of up to $20 million in 2027[33]. - Biomaterials projects are expected to contribute approximately $31 million of run-rate proportional EBITDA by the end of 2027[33]. - The company aims to achieve over $300 million in run-rate EBITDA by the end of 2027, supported by strategic initiatives and pricing actions[4][33]. - The Company secured green capital of €67 million in Q4 2024 to advance its biomaterials strategy[39]. - RYAM is evaluating investments in crude tall oil facilities in Georgia and France, and has purchased high-quality CTO plant equipment for the Jesup project[45]. - The Company is pursuing a potential bioethanol facility in Florida, despite earlier site plan application denial, and remains confident in the project's merits[45]. - RYAM's production is being shifted toward non-fluff commodities due to disruptions in the global fluff market caused by Chinese retaliatory tariffs[41]. Expenses and Charges - Interest expense for Q3 2025 increased by $5 million compared to the prior year quarter, primarily due to a rise in the average effective interest rate on debt[26]. - Interest expense for the nine months ended September 27, 2025, was $70 million, an increase from $61 million in the same period last year[73]. - Corporate costs for the full year 2025 are expected to approximate $70 million, primarily due to non-cash environmental reserve charges[49]. - The company incurred indefinite suspension charges of $1 million in the three months ended September 27, 2025[72]. - Asset impairment charges were recorded at $25 million for the nine months ended September 27, 2025, consistent with the previous year[80]. - Indefinite suspension charges amounted to $1 million for the three months ended September 27, 2025, compared to $7 million in the same period in 2024[80]. - The total income tax expense for the nine months ended September 27, 2025, was $323 million, compared to an income tax benefit of $6 million in the same period last year[73].