Rayonier Advanced Materials Announces Fourth Quarter and 2019 Results and Continuing Actions to Re-Position the Company in 2020

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Fourth Quarter and 2019 Results

  • Fourth quarter and full year 2019 loss from continuing operations of $57 million and $119 million due primarily to extremely weak commodity pricing, which alone negatively impacted results by $162 million in the full year period
  • Took decisive action in 2019: implemented strategy to increase margins for Cellulose Specialties, reduce capital expenditures, sell the Matane asset and reduce debt
  • $151 million of liquidity as of year-end 2019; 4.1x senior secured leverage versus 5.6x covenant ratio

Recent Developments

  • Dissolving wood pulp (Cellulose Specialties and viscose) and fluff pulp eligible for exemption from Chinese tariffs; Exemption process begins March 2
  • Momentum in lumber prices driven by strong housing starts in December and January; duties from lumber imported from Canada to U.S. preliminarily reduced by 60 percent beginning in August

Further Actions to Reduce Costs and Improve Free Cash Flow

  • Operating cost improvements, corporate cost eliminations, working capital reductions and capex savings of $60 to $70 million expected for 2020
  • Initiating incremental actions to evaluate alternatives for non-core assets and additional cost reductions

JACKSONVILLE, Fla. -- Feb. 25, 2020 -- In conjunction with Fourth Quarter and 2019 results, Rayonier Advanced Materials Inc. (the “Company”) (NYSE:RYAM) is announcing actions to further reduce costs and improve cash flow.

“2019 was a difficult year, negatively impacted by global trade disputes and sales price declines across our commodity businesses. We took decisive action to combat the pressure including implementing a strategy to increase margins in Cellulose Specialties, reduce capital expenditures, sell the Matane asset and reduce debt,” said Paul Boynton, Chairman, President and Chief Executive Officer. “Today, we are announcing additional cost and cash actions that will position the Company to navigate historically weak commodity markets, ensure debt covenant compliance and ultimately drive long-term success.”

Fourth Quarter and Full Year 2019 Results Summary

The Company today reported a loss from continuing operations for the year ended December 31, 2019 of $119 million, or $2.33 loss per diluted common share, compared to income from continuing operations of $99 million, or $1.52 earnings per diluted common share for the prior year. Fourth quarter 2019 loss from continuing operations was $57 million, or $0.91 loss per diluted common share, compared to income from continuing operations of $7 million, or $0.07 earnings per diluted common share for the prior year comparable period.

The adjusted loss from continuing operations for the year ended December 31, 2019 was $110 million, or $2.16 loss per diluted common share, compared to adjusted income of $82 million, or $1.25 earnings per diluted common share, for the prior year. The adjusted loss from continuing operations for the fourth quarter of 2019 was $49 million, or $0.78 loss per diluted common share, compared to adjusted income from continuing operations of $7 million, or $0.08 earnings per diluted common share, for the prior year comparable quarter.

See Schedule H for a reconciliation of the results from continuing operations to adjusted amounts.

As a result of the sale of the Matane facility in November 2019, its operating results have been classified as discontinued operations. Unless otherwise stated, information herein relates to continuing operations. Also following the sale of the Matane facility, the Company’s reportable segments have changed to now include High Purity Cellulose, Forest Products, Paperboard and Pulp & Newsprint. All prior period amounts have been reclassified to conform to this presentation.

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Source: Rayonier Advanced Materials