Updates 2023 EBITDA and Raises Free Cash Flow Guidance
- Loss from continuing operations for the second quarter of $16 million, an improvement of $9 million, or 36 percent, over prior year quarter
- Adjusted EBITDA from continuing operations for the second quarter of $27 million, down $7 million, or 21 percent, from prior year quarter
- Year-to-date cash provided by operating activities of $84 million; total debt of $834 million
- Adjusted Free Cash Flow generation of $52 million; Net Debt reduced to $682 million
- Updates 2023 Adjusted EBITDA guidance to $185 million to $200 million
- Raises 2023 Adjusted Free Cash Flow guidance to $55 million to $70 million
JACKSONVILLE, Fla - Rayonier Advanced Materials Inc. (NYSE:RYAM) (the “Company”) reported a net loss of $17 million, or $(0.26) per diluted share, for the quarter ended July 1, 2023, compared to a net loss of $23 million, or $(0.36) per diluted share, for the prior year quarter. Loss from continuing operations for the quarter ended July 1, 2023 was $16 million, or $(0.24) per diluted share, compared to a loss from continuing operations of $25 million, or $(0.39) per diluted share, for the prior year quarter.
“Results for the second quarter reflected shifting market conditions across several key end markets. Despite facing volume pressure due to destocking in certain areas of our Cellulose Specialties and Paperboard businesses, we successfully increased prices by 13 percent and 4 percent, respectively, from the previous year, demonstrating our commitment to prioritizing value over volume. Moreover, we are experiencing downward pressure on commodity prices across all our segments, which intensified during the quarter. We are reacting by taking downtime at our High-Yield Pulp plant to reduce costs, minimize losses and monetize inventories. We are also reviewing strategic options with respect to our non-fluff High Purity Cellulose commodity businesses, specifically including viscose and paper pulp products,” said De Lyle W. Bloomquist, RYAM’s President and Chief Executive Officer. “Consequently, we are revising down our 2023 Adjusted EBITDA guidance, but raising our free cash flow guidance as we reduce capital expenditures and monetize additional working capital. The lower EBITDA guidance is driven primarily by a softer outlook for commodity pricing and lower sales volumes in Cellulose Specialties and Paperboard. Overall, reductions in commodity prices are impacting our 2023 EBITDA guidance by approximately $45 million, which we expect to partially offset with proactive cost reduction measures of nearly $40 million that is expected to be realized in the second half of the year.”
“Subsequent to the quarter's end, we successfully raised a new $250 million secured term loan, allowing us to redeem the remaining $318 million of aggregate principal amount from our 2024 senior unsecured notes. Through these transactions, we will further reduce gross debt by an additional $68 million. In order to service the increasing fixed charges from the higher cost of debt, we are increasing the investment hurdles for strategic capital investments and expect to primarily fund these investments through low-cost green project capital and free cash flow. Our long-term strategy remains focused on steady margin growth from cellulose specialties products while driving new value through investments in our emerging biomaterials business,” concluded Mr. Bloomquist.
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