Updates 2023 EBITDA and Raises Free Cash Flow Guidance
- Loss from continuing operations for the third quarter of $27 million, down $45 million from prior year quarter
- Adjusted EBITDA from continuing operations for the third quarter of $24 million
- Year-to-date cash provided by operating activities of $82 million; total debt of $749 million
- Adjusted Free Cash Flow year-to-date generation of $27 million; Net Debt of $743 million
- Updates 2023 Adjusted EBITDA guidance to approximately $150 million
- Raises 2023 Adjusted Free Cash Flow guidance to $65 million to $75 million with additional deleveraging from potential sale of passive assets
JACKSONVILLE, Fla - Rayonier Advanced Materials Inc. (NYSE:RYAM) (the “Company”) reported a net loss of $25 million, or $(0.39) per diluted share, for the quarter ended September 30, 2023, compared to net income of $30 million, or $0.45 per diluted share, for the prior year quarter. Loss from continuing operations for the quarter ended September 30, 2023 was $27 million, or $(0.41) per diluted share, compared to income from continuing operations of $18 million, or $0.28 per diluted share, for the prior year quarter.
“Results for the third quarter reflected continued weak demand across many of our product categories. We are responding by reducing costs and taking opportunistic downtime across all segments. As previously announced, we have taken downtime at our High-Yield Pulp facility in the third and fourth quarters and expect to take downtime in Paperboard and at the High Purity Cellulose plant in Tartas in the fourth quarter,” said De Lyle W. Bloomquist, RYAM’s President and Chief Executive Officer. “Consequently, we are revising down our 2023 Adjusted EBITDA guidance to approximately $150 million while raising our free cash flow guidance to $65 to $75 million. The decline in year-to-date free cash flow in the quarter was primarily driven by planned increases in working capital. As we finish the year, we expect working capital to benefit free cash flow. Additionally, we are reviewing options to monetize passive assets to drive further net debt reduction.”
“Beyond the short-term challenges, we are optimistic about the future of RYAM. Our non-viscose and paper pulp businesses are expected to generate over $250 million in EBITDA before corporate charges this year. The recent closure of a competitor’s plant is expected to yield a favorable mix shift for RYAM, thus adding to these strong results in the relatively near term. Additionally, we are in the process of consolidating the vast majority of our commodity viscose production into the Temiscaming High Purity Cellulose plant, which is home to our lowest variable cost line. We have also begun the process of a potential sale of the Paperboard and High-Yield Pulp assets. If successful, proceeds will be used to accelerate debt repayment and reduce fixed charges ahead of our 2026 debt maturities. Lastly, we are continuing with our investments to grow our Biomaterials businesses, which will provide faster growth with greater customer and end market diversification. Overall, these actions are expected to provide more stable and consistent earnings for the Company,” concluded Mr. Bloomquist.
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Source: RYAM
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