On August 6, 2024, Rayonier Advanced Materials Inc (RYAM, Financial) released its 8-K filing for the second quarter of 2024, showcasing a notable improvement in financial performance. The company, which manufactures high-purity cellulose derived from wood, reported net sales of $419 million, surpassing the analyst estimate of $402.17 million. Additionally, the company achieved a net income of $11 million, or $0.17 per diluted share, significantly outperforming the estimated loss of $0.11 per share.
Company Overview
Rayonier Advanced Materials Inc (RYAM, Financial) is a leading manufacturer of high-purity cellulose, also known as cellulose specialties, which are used in various applications such as cigarette filters, liquid crystal displays, paints, pharmaceuticals, and food. The company operates in several segments, including High Purity Cellulose, Paperboard, High-Yield Pulp, and Corporate and Other, with the majority of its revenue derived from the High Purity Cellulose segment. Geographically, the company generates most of its revenue from the United States.
Performance and Challenges
Rayonier Advanced Materials Inc (RYAM, Financial) reported net sales of $419 million for the second quarter, an increase of $34 million from the prior year quarter. The company also reported income from continuing operations of $8 million, up $24 million from the prior year quarter. Adjusted EBITDA from continuing operations was $68 million, up $41 million from the prior year quarter, including $10 million of Canada Emergency Wage Subsidy (CEWS) benefits recognized.
The company faced challenges such as the indefinite suspension of operations at its Temiscaming High Purity Cellulose plant, which impacted commodity viscose pulp production. However, this decision helped improve margins and reduce losses associated with commodity viscose pulp.
Financial Achievements
Rayonier Advanced Materials Inc (RYAM, Financial) achieved several financial milestones in the second quarter of 2024:
- Net sales increased to $419 million, up from $385 million in the prior year quarter.
- Net income of $11 million, or $0.17 per diluted share, compared to a net loss of $17 million, or $(0.26) per diluted share, in the prior year quarter.
- Adjusted EBITDA from continuing operations increased to $68 million, up from $27 million in the prior year quarter.
- Total debt reduced to $778 million, with a net secured debt of $659 million and a covenant net secured debt ratio of 3.4 times.
Income Statement Highlights
| Three Months Ended | June 29, 2024 | March 30, 2024 | July 1, 2023 |
|---|---|---|---|
| Net Sales | $419 million | $388 million | $385 million |
| Operating Income | $28 million | $17 million | $(7) million |
| Net Income | $11 million | $(2) million | $(17) million |
Balance Sheet and Cash Flow
As of June 29, 2024, Rayonier Advanced Materials Inc (RYAM, Financial) reported total assets of $2.197 billion, with cash and cash equivalents of $114 million. The company generated operating cash flows of $99 million during the six months ended June 29, 2024, driven by lower costs, proceeds from the sale of duty refund rights, and net tax refunds.
Commentary and Analysis
"The Company delivered another solid quarter on its financial results as we continued to improve our product mix and manage operating costs. Demand for cellulose specialties has remained higher than expectations and margins have improved as we have minimized losses associated with commodity viscose pulp driven by our decision to suspend operations at our Temiscaming High Purity Cellulose plant." - De Lyle Bloomquist, President and CEO of RYAM.
Rayonier Advanced Materials Inc (RYAM, Financial) has shown resilience and strategic decision-making in navigating market challenges. The company's focus on improving product mix, managing operating costs, and reducing exposure to commodity viscose pulp has resulted in better-than-expected financial performance. The increase in Adjusted EBITDA and free cash flow guidance for 2024 reflects the company's confidence in its ongoing strategies and market position.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Rayonier Advanced Materials Inc for further details.
