Rayonier Advanced Materials(US:RYAM)2023-03-01 20:53Production Capacity and Sales - The company has a combined annual production capacity of 1,045,000 MTs for cellulose specialties and commodity products, with 270,000 MTs dedicated to commodity products [142]. - Average sales prices for cellulose specialties in 2023 are expected to be high single-digit percent higher than average 2022 sales prices [150]. - Paperboard prices for 2023 are expected to continue increasing from 2022 levels, driven by strong demand in packaging and commercial printing [151]. - High Purity Cellulose segment net sales rose by $245 million to $1,336 million, with average sales prices increasing by 19% [164]. - Paperboard segment net sales increased by $42 million to $250 million, driven by a 27% rise in sales prices, despite a 6% decrease in sales volumes [166]. - High-Yield Pulp segment net sales grew by $24 million to $160 million, with sales prices increasing by 25% [169]. - Net sales increased by $309 million or 22% in 2022 compared to 2021, reaching $1,717 million, primarily driven by higher sales prices across all segments [155]. Financial Performance - The company reported a net loss of $14.9 million for the year ended December 31, 2022, compared to a net income of $66.4 million in 2021 [291]. - Operating income improved by $36 million in 2022, totaling $26 million, due to higher sales prices, partially offset by increased costs from inflation on chemicals, wood fiber, energy, and logistics [156]. - The company reported comprehensive income of $5,753 in 2022, a significant decrease from $115,579 in 2021, highlighting challenges in overall financial performance [283]. - Loss from continuing operations was $27,377 in 2022, compared to a loss of $49,769 in 2021, showing a reduction in losses year-over-year [280]. - The company reported a net income of $150 million, up from $120 million in the previous year, marking a 25% increase [238]. Cash Flow and Liquidity - Cash flows from operations remain the primary source of liquidity, with a focus on managing working capital and optimizing capital expenditures [172]. - Cash provided by operating activities from continuing operations was $68.8 million in 2022, down from $73.7 million in 2021 [291]. - As of December 31, 2022, the company had cash and cash equivalents of $152 million, down from $253 million in 2021 [176]. - The company reported a cash balance of $151.8 million at the end of 2022, down from $253.3 million at the end of 2021 [291]. Debt and Shareholder Actions - The company repurchased a total of $47 million of Senior Notes during the second, third, and fourth quarters of 2022 [154]. - The total debt as of December 31, 2022, was $853 million, a decrease from $929 million in 2021, resulting in a debt to capital ratio of 51% [176]. - The company has a remaining unused authorization of $60 million under its share buyback program as of December 31, 2022 [132]. - The company suspended its quarterly common stock dividend in September 2019, with no dividends declared since then [131]. Environmental and Regulatory Matters - The company had accrued liabilities for environmental costs amounting to $171 million as of December 31, 2022 [199]. - Rayonier Advanced Materials Inc. reported environmental liabilities totaling approximately $170 million as of December 31, 2022, with potential additional liabilities estimated up to $85 million [267]. - The company assessed the effectiveness of its internal control over financial reporting as of December 31, 2022, concluding that it was effective [258]. - The independent auditor issued an unqualified opinion on the company's internal control over financial reporting as of December 31, 2022 [263]. Investments and Future Plans - The bioethanol facility at the Tartas, France facility is anticipated to be operational in 2024, with an estimated project cost of approximately $39 million [154]. - The company plans to expand its market presence in Asia, targeting a 20% increase in market share by 2025 [239]. - Rayonier Advanced Materials Inc. is investing $50 million in new product development, focusing on sustainable materials [240]. - A strategic acquisition of a smaller competitor is expected to enhance production capacity by 30% [239]. Pension and Employee Matters - The defined pension plans were underfunded by $87 million as of December 31, 2022, a decrease of $39 million from the previous year due to actuarial gains from increased discount rates [202]. - Mandatory contributions and benefit payments to plan participants were $8 million in 2022, with an expected increase to $9 million in 2023 [203]. - Rayonier Advanced Materials Inc. has introduced a new equity incentive program to attract top talent, with a budget of $20 million [239]. Research and Development - Research and Development (R&D) expenses were consistently $7 million for each of the years ended December 31, 2022, 2021, and 2020, focusing on the High Purity Cellulose segment [316].