Rayonier Advanced Materials(RYAM)2024-11-05 21:28Financial Performance - Net sales for Q3 2024 were $401 million, an increase of $32 million or 8.7% from the prior year quarter[1]. - Adjusted EBITDA from continuing operations for Q3 2024 was $51 million, up $27 million or 112% from the prior year quarter[1]. - The company reported a net loss of $33 million, or $(0.49) per diluted share, compared to a net loss of $25 million, or $(0.39) per diluted share, in the prior year quarter[5]. - The company reported a net loss of $33 million for the nine months ended September 28, 2024, compared to a net loss of $40 million for the same period in 2023[60]. - Adjusted EBITDA for the nine months ended September 28, 2024, was $175 million, up from $171 million for the same period last year[68]. - Adjusted income (loss) from continuing operations for the three months ended September 28, 2024, was $(0.12) per diluted share, compared to $(0.40) per diluted share for the same period in 2023[76]. - Adjusted income (loss) from continuing operations for the nine months ended September 28, 2024, was $(0.58) per diluted share[76]. - The company experienced a total adjusted loss of $(39) million for the nine months ended September 28, 2024[76]. Debt and Financing - Total debt stood at $773 million, with a net secured debt of $622 million and a covenant net secured leverage ratio of 2.8 times[1]. - The company successfully raised $700 million in secured term loan financing to refinance its capital structure[1]. - Non-operating interest expense increased by $10 million for the nine months ended September 28, 2024, due to a rise in the average effective interest rate on debt[19]. - The Company has secured commitments for a five-year $175 million ABL credit facility, initially priced at Term SOFR plus a spread of 2%[30]. - Total debt as of September 28, 2024, was $773 million, a slight decrease from $777 million as of December 31, 2023[75]. - Adjusted net debt decreased to $653 million as of September 28, 2024, from $721 million at the end of 2023, reflecting improved financial health[75]. Cash Flow and Liquidity - The company generated $99 million of Adjusted Free Cash Flow, which supported a $37 million reduction in net secured debt during the quarter[2]. - Cash provided by operating activities for the nine months ended September 28, 2024, was $149 million, compared to $82 million for the same period last year, indicating an increase of 81.7%[71]. - The Company generated operating cash flows of $149 million during the nine months ended September 28, 2024, driven by proceeds of $39 million from the sale of softwood lumber duty refund rights[27]. - The Company ended the third quarter with $281 million of global liquidity, including $136 million of cash and $135 million of borrowing capacity under the ABL Credit Facility[31]. - Adjusted Free Cash Flow guidance for 2024 has been increased to $115 million to $125 million[1]. - The company expects annual adjusted free cash flow guidance for 2024 to be between $115 million and $125 million[72]. Sales and Pricing - Price increases of up to 10% for cellulose specialties products were announced, expected to improve margins in 2025[4]. - Average sales price for High Purity Cellulose was $1,369 per metric ton for the three months ended September 28, 2024, compared to $1,215 for the same period last year, reflecting a 12.7% increase[62]. - Sales volume of High Purity Cellulose was 218,000 metric tons for the three months ended September 28, 2024, a slight decrease from 225,000 metric tons in the previous quarter[62]. - The average sales price for Paperboard was $1,400 per metric ton for the three months ended September 28, 2024, down from $1,459 in the same period last year, representing a decrease of 4.0%[62]. - High-Yield Pulp external sales price averaged $559 per metric ton for the three months ended September 28, 2024, compared to $489 for the same period last year, marking a 14.3% increase[62]. Operational Challenges - The Company incurred a $14 million one-time operating charge related to the indefinite suspension of operations at its Temiscaming HPC plant[33]. - The Company anticipates a decline in EBITDA from the Paperboard segment in the coming quarters due to market pressure from new competitive supply[38]. - High-Yield Pulp prices are expected to decline in the fourth quarter, while sales volumes are projected to increase significantly due to timing of shipments[39]. - The company incurred asset impairment charges of $25 million during the nine months ended September 28, 2024[60]. - Asset impairment charges amounted to $0.38 million for the three months ended September 28, 2024[76]. - Indefinite suspension charges were $0.12 million for the three months ended September 28, 2024, compared to $0.10 million for the previous quarter[76]. Future Outlook - 2024 Adjusted EBITDA guidance is reiterated at $205 million to $215 million, despite an estimated $10 million impact from a fire at the Jesup plant[3]. - The bioethanol facility in Tartas, France is expected to deliver approximately $3 million to $4 million of EBITDA in 2024, growing to $8 million to $10 million beginning in 2025[36]. - The company may require additional financing in the future to meet capital needs or make acquisitions, which may not be available on favorable terms[51]. - The company is exploring the potential sale of its Paperboard and High-Yield Pulp assets located at its Temiscaming site[32].