Rayonier Advanced Materials Inc.
08/05/2026 | Press release | Distributed by Public on 08/05/2026 10:04
Quarterly Report for Quarter Ending June 27, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following analysis of our financial condition and results of operations should be read in conjunction with our Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q and with our 2025 Form 10-K and information contained in subsequent Forms 8-K and other reports filed with the SEC.
Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q regarding anticipated financial, business, legal or other outcomes, including business and market conditions, outlook and other similar statements relating to future events, developments or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "should," "could," "expect," "estimate," "target," "believe," "intend," "plan," "forecast," "anticipate," "project," "guidance" and other similar language. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking.
Forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that these expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to various risks and uncertainties. The risk factors contained in Item 1A-Risk Factors of our 2025 Form 10-K, among others, could cause actual results or events to differ materially from our historical experience and those expressed in forward-looking statements made in this report.
Forward-looking statements are only as of the date of the filing of this Quarterly Report on Form 10-Q, and we undertake no duty to update forward-looking statements except as required by law. You are advised to review any disclosures that we have made or may make in our filings and other submissions to the SEC, including those on Forms 10-K, 10-Q, 8-K and other reports.
Business Overview
RYAM is a global leader of high purity cellulose commonly used in the production of filters, food, pharmaceuticals, high performance plastics, propellants and various other industrial applications. Our specialized assets, capable of creating the world's leading cellulose specialties products, are also used to produce cellulose viscose pulp, cellulose fluff pulp, paperboard, high yield pulp and various value-added co-products, including biofuels, bioelectricity and lignin.
New Segment Structure
Beginning in January 2026, we reorganized our segment structure and now operate in two segments:
•High Purity Cellulose: formerly the segments of Cellulose Specialties, Cellulose Commodities and Biomaterials
•Paperboard & High Yield Pulp: formerly the segments of Paperboard and High Yield Pulp
Prior period segment results have been recast to align with this new segment reporting structure. See Note 16-Segments for further information.
Recent Business Developments
•In August 2025, RYAM and USW jointly filed petitions with the USITC and the USDOC alleging that certain Brazilian and Norwegian producers of high purity dissolving pulp are selling into the U.S. market at unfairly low prices and/or benefiting from government subsidies, resulting in material injury to the U.S. industry. In September 2025, the USITC issued an affirmative preliminary injury determination, allowing the investigations to proceed.
During the second quarter of 2026, the USDOC issued affirmative preliminary antidumping duty determinations with respect to imports from Brazil and Norway and an affirmative preliminary countervailing duty determination with respect to imports from Brazil. In addition, the USITC scheduled the final phase of the investigations, with final determinations expected later in 2026.
While the outcome of these proceedings remains uncertain, we believe the petitions are an important step toward addressing alleged unfair trade practices and supporting more stable and competitive market conditions in the U.S.
Separately, during the third quarter of 2026, the Office of the United States Trade Representative announced final Section 301 actions applicable to imports from Brazil and Norway, including an aggregate 37.5% tariff on Brazilian imports of DWP (HTS Code 4702) and a 12.5% tariff on Norwegian imports of DWP. However, the ultimate impact of these actions will depend on a number of factors, including the extent to which downstream customers are able to utilize available trade programs and other regulatory mechanisms applicable to exported products.
•In 2025, we signed Memoranda of Understanding with Verso Energy to explore eSAF opportunities at both our Jesup and Tartas facilities. In March 2026, a grant agreement was signed with the European Climate, Infrastructure and Environmental Executive Agency that positions Verso's ReSTart project (Renewable e-SAF Tartas) to become one of the first large-scale synthetic aviation fuel production plants in Europe through the capture of biogenic CO2 emissions from our Tartas HPC plant. The project aims to contribute to and accelerate the achievement of the aviation sector's decarbonization targets for 2030 to 2050 as established by various European Union regulatory mandates.
Business Outlook
Our comprehensive review of strategic alternatives remains the top priority and is progressing with urgency and discipline. The review is focused on evaluating the full range of strategic and financial alternatives available to us and identifying the path that best maximizes value for shareholders. We expect to conclude the review and communicate a clear path forward during the fourth quarter of 2026.
While the review is underway, management remains focused on strengthening the performance and value of the business. Our priorities are to advance our Cellulose Specialties leadership strategy, improve operating reliability and asset optimization, generate cash and maintain disciplined capital allocation. We believe stronger commercial execution, operating performance and cash generation enhance RYAM's value under any potential path.
Our second quarter results reflected continued progress against these priorities, including higher CS pricing and improved HPC operating income compared to the prior year quarter. We expect sequential improvement in the second half of 2026, although results may continue to be affected by customer inventory levels, demand conditions, commodity pricing, input cost inflation, logistics costs and geopolitical developments.
High Purity Cellulose
We expect second-half performance to benefit from continued execution of our CS leadership strategy and improved operating performance.
CS volumes are expected to remain below prior year levels, as certain customers continue to manage inventories and ordering patterns, particularly in acetate and ethers. Second-half volumes are expected to improve compared with the first half of the year and remain in line with our expectations.
The 21% year-over-year increase in CS pricing during the second quarter reflects the differentiated performance and value that our products deliver across the grades and end markets we serve. We expect CS pricing to remain significantly above prior-year levels through the second half, with full-year pricing aligned with our prior expectations.
Our commercial approach remains focused on sustaining the pricing progress achieved to date and recognizing the differentiated performance of our products. We are applying this approach with greater precision across products, markets and customer relationships, while pursuing volume and mix opportunities supported by market conditions. This approach is intended to reinforce our competitive positions, support long-term customer relationships and improve the quality and consistency of earnings.
CC volumes are expected to remain elevated as we optimize production and asset loading. Market pricing for fluff and viscose has stabilized, with modest improvement expected through the third quarter. Biomaterials results are expected to improve year over year, supported by improved feedstock availability and stable operating performance at Tartas.
Chemicals, logistics and other input costs remain subject to inflationary and geopolitical pressure. We have implemented commercial recovery actions on certain CS products where commercially and contractually appropriate. These actions, together with improving commodity pricing, are expected to partially mitigate current inflationary pressures.
Paperboard & High Yield Pulp
We expect second-half performance to benefit from tightening PBD industry operating rates, which should support firmer pricing, together with continued growth in higher-value folding packaging products, including freezer board and oil-and-grease-resistant grades. In HYP, the market remains structurally oversupplied and pricing remains challenged; however, we are progressing commercialization of softwood rolled pulp for absorbent-care applications, which should support improved mix and broader participation in differentiated end uses. Additionally, we are actively monitoring evolving trade dynamics, including the recently announced tariff on certain Canadian origin products, and have actionable mitigation plans in place.
Corporate & Other
We will continue to maintain disciplined control of discretionary spending and pursue structural efficiencies across the organization. Subject to variability in foreign exchange rates, incentive compensation and costs associated with the strategic review, Corporate & Other Adjusted EBITDA is expected to approximate $45 million in 2026, compared with $72 million in 2025.
Capital allocation
We remain focused on preserving liquidity and financial flexibility while supporting safe and reliable operations. Capital expenditures will continue to be prioritized toward essential maintenance, reliability and initiatives that support near-term cash generation and attractive risk-adjusted returns.
Cash generation and deleveraging remain important priorities. We will continue to actively manage working capital, capital spending and operating costs while maintaining appropriate liquidity and compliance with our debt covenants.
Results of Operations
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in millions, except percentages) | June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| Net sales | $ | 376 | $ | 340 | $ | 695 | $ | 696 | |||||||||||||||
| Cost of sales | (353) | (316) | (680) | (648) | |||||||||||||||||||
| Gross margin | 23 | 24 | 15 | 48 | |||||||||||||||||||
| Selling, general and administrative expense | (17) | (18) | (36) | (41) | |||||||||||||||||||
| Foreign exchange gain (loss) | 1 | (4) | 2 | (5) | |||||||||||||||||||
| Temiscaming HPC permanent idling charges | - | - | (41) | - | |||||||||||||||||||
| Asset impairment | (13) | - | (13) | - | |||||||||||||||||||
| Suspension charges | (1) | (1) | (1) | (1) | |||||||||||||||||||
| Other operating income (expense), net | - | (2) | 2 | (17) | |||||||||||||||||||
| Operating loss | (7) | (1) | (72) | (16) | |||||||||||||||||||
| Interest expense | (25) | (23) | (48) | (47) | |||||||||||||||||||
| Other income (expense), net | 2 | (2) | 2 | - | |||||||||||||||||||
| Loss from continuing operations before income tax | (30) | (26) | (118) | (63) | |||||||||||||||||||
| Income tax (expense) benefit | (2) | (339) | 5 | (334) | |||||||||||||||||||
| Equity in loss of equity method investment | (1) | (1) | (1) | (1) | |||||||||||||||||||
| Loss from continuing operations | (33) | (366) | (114) | (398) | |||||||||||||||||||
| Income from discontinued operations, net of tax | - | 3 | - | 3 | |||||||||||||||||||
| Net loss | (33) | (363) | (114) | (395) | |||||||||||||||||||
| Net income attributable to redeemable noncontrolling interest | - | - | - | - | |||||||||||||||||||
| Net loss attributable to RYAM | $ | (33) | $ | (363) | $ | (114) | $ | (395) | |||||||||||||||
| Gross margin % | 6.1 | % | 7.1 | % | 2.2 | % | 6.9 | % | |||||||||||||||
| Operating margin % | (1.9) | % | (0.3) | % | (10.4) | % | (2.3) | % | |||||||||||||||
| Effective tax rate | (7.4) | % | (1,297) | % | 4.2 | % | (527) | % | |||||||||||||||
Net Sales
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in millions) | June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| High Purity Cellulose | $ | 301 | $ | 272 | $ | 564 | $ | 554 | |||||||||||||||
| Paperboard & High Yield Pulp | 75 | 68 | 131 | 142 | |||||||||||||||||||
| Net sales | $ | 376 | $ | 340 | $ | 695 | $ | 696 | |||||||||||||||
Net sales for the quarter ended June 27, 2026 increased $36 million, or 11%, compared to the same prior year quarter driven by a higher average sales price in CS and higher sales volumes in CC, PBD and HYP. These increases were partially offset by lower average sales prices in CC, PBD and HYP and lower sales volume in CS.
Net sales for the six months ended June 27, 2026 were flat compared to the same prior year period driven by a higher average sales price in CS and higher sales volumes in CC and PBD, partially offset by lower average sales prices in CC, PBD and HYP and lower sales volumes in CS and HYP.
See Operating Results by Segment below for further discussion.
Operating Income (Loss)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in millions) | June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| High Purity Cellulose | $ | 29 | $ | 20 | $ | (14) | $ | 40 | |||||||||||||||
| Paperboard & High Yield Pulp | (27) | (7) | (37) | (16) | |||||||||||||||||||
| Corporate & Other | (9) | (14) | (21) | (40) | |||||||||||||||||||
| Operating loss | $ | (7) | $ | (1) | $ | (72) | $ | (16) | |||||||||||||||
Operating loss for the quarter ended June 27, 2026 increased $6 million, or 600%, compared to the same prior year quarter, driven by a non-cash HYP asset impairment of $13 million, the impact of the PBD & HYP planned maintenance outage and market-related downtime taken in the current quarter and higher chemicals and logistics costs. Partially offsetting these decreases were the increase in net sales, improved operating rates at the HPC plants, lower wood and other fixed costs and favorable foreign exchange rates.
Operating loss for the six months ended June 27, 2026 increased $56 million, or 350%, compared to the same prior year period, driven by non-cash HPC permanent idling charges of $41 million, the non-cash HYP asset impairment of $13 million, higher chemicals and logistics costs and the impact of the PBD & HYP planned maintenance outage and market-related downtime taken in the current period. Partially offsetting these decreases were improved operating rates at the HPC plants, lower wood, purchased pulp, energy and other fixed costs, prior year non-cash environmental reserves charges of $12 million, favorable foreign exchange rates and an insurance recovery of $5 million related to the 2024 Jesup plant fire.
See Operating Results by Segment below for further discussion. See also Note 2-Temiscaming Operations, Note 6-Accrued and Other Current Liabilities and Note 8-Environmental Liabilities to our Financial Statements for further details on the permanent idling charges and HYP asset impairment, insurance recovery and environmental reserves charges, respectively.
Non-Operating Income & Expense
Favorable foreign exchange rates during the quarter and six months ended June 27, 2026 compared to unfavorable rates in the same prior year periods resulted in favorable impacts of $2 million and $3 million, respectively.
Partially offsetting the foreign exchange rate impact in the six months-ended period was a $2 million increase in the quarterly fair value remeasurement of the SWEN put option. See Note 9-Fair Value Measurements to our Financial Statements for further details.
Income Taxes
The effective tax rates on the loss from continuing operations for the quarter and six months ended June 27, 2026 were an expense of 7.4% and a benefit of 4.2%, respectively. These rates differed from the federal statutory rate of 21% primarily due to changes in valuation allowances, different statutory tax rates in foreign jurisdictions and U.S. tax credits. Also driving the difference for the quarter was the foreign-derived income deduction.
The effective tax rates on the loss from continuing operations for the quarter and six months ended June 28, 2025 were not meaningful as a result of the full write-off of our Canadian DTAs (see Note 15-Income Taxes to our Financial Statements for further details). Also driving the differences between the effective tax rates and the federal statutory rate of 21% were different statutory tax rates in foreign jurisdictions, valuation allowances on nondeductible U.S. interest expense, U.S. tax credits and nondeductible executive compensation.
Discontinued Operations
During the quarter and six months ended June 28, 2025, we recorded pre-tax income from discontinued operations of $4 million related to our remaining CEWS benefit claims deferred since 2021. See Note 3-Discontinued Operations to our Financial Statements for further details.
Operating Results by Segment
High Purity Cellulose
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in millions, unless otherwise stated) | June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| Net sales | $ | 301 | $ | 272 | $ | 564 | $ | 554 | |||||||||||||||
| Operating income (loss) | $ | 29 | $ | 20 | $ | (14) | $ | 40 | |||||||||||||||
| Average sales price ($ per MT) | |||||||||||||||||||||||
| Total Cellulose | $ | 1,380 | $ | 1,478 | $ | 1,300 | $ | 1,422 | |||||||||||||||
| Cellulose Specialties | $ | 2,193 | $ | 1,807 | $ | 2,123 | $ | 1,783 | |||||||||||||||
| Cellulose Commodities | $ | 815 | $ | 911 | $ | 792 | $ | 883 | |||||||||||||||
| Sales volume (thousands of MTs) | |||||||||||||||||||||||
| Total Cellulose | 210 | 175 | 415 | 370 | |||||||||||||||||||
| Cellulose Specialties | 86 | 111 | 158 | 221 | |||||||||||||||||||
| Cellulose Commodities | 124 | 64 | 257 | 149 | |||||||||||||||||||
Net Sales - Three Months Ended
|
Three Months Ended June 28, 2025
|
Changes Attributable to: |
Three Months Ended June 27, 2026
|
|||||||||||||||||||||
| (in millions) | Price | Volume/Mix/Other | |||||||||||||||||||||
| Cellulose Specialties | $ | 200 | $ | 33 | $ | (45) | $ | 188 | |||||||||||||||
| Cellulose Commodities | 58 | (18) | 61 | 101 | |||||||||||||||||||
| Biomaterials and other | 14 | - | (2) | 12 | |||||||||||||||||||
| HPC net sales | $ | 272 | $ | 15 | $ | 14 | $ | 301 | |||||||||||||||
Net sales of our High Purity Cellulose segment for the second quarter increased $29 million, or 11%, compared to the same prior year quarter, driven by:
•Cellulose sales volume increase of 20%, including a 94% increase in CC sales volume that was partially offset by a 23% decrease in CS sales volume.
-CC sales volume increased as our plants experienced higher operating rates compared to the prior quarter and also shifted to CC production in the current quarter due to lower orders for CS products.
-CS sales volume declined as we executed our CS leadership initiatives. Partially offsetting this decline was lower CS sales volume in the prior quarter as Chinese customers delayed orders due to the geopolitical uncertainty with Chinese and U.S. tariffs.
•Cellulose average sales price decrease of 7%, including an 11% decrease in CC average sales price that was partially offset by a 21% increase in CS average sales price.
-CS average sales price increase was driven by higher pricing of newly negotiated 2026 agreements.
-CC average sales price decline was due to softer global commodity pricing and product mix within the commodity portfolio.
Net Sales - Six Months Ended
|
Six Months Ended June 28, 2025
|
Changes Attributable to: |
Six Months Ended June 27, 2026
|
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| (in millions) | Price | Volume/Mix/Other | |||||||||||||||||||||
| Cellulose Specialties | $ | 395 | $ | 53 | $ | (112) | $ | 336 | |||||||||||||||
| Cellulose Commodities | 131 | (33) | 105 | 203 | |||||||||||||||||||
| Biomaterials and other | 28 | 1 | (4) | 25 | |||||||||||||||||||
| HPC net sales | $ | 554 | $ | 21 | $ | (11) | $ | 564 | |||||||||||||||
Net sales of our High Purity Cellulose segment for the six months ended June 27, 2026 increased $10 million, or 2%, compared to the same prior year period, driven by:
•Cellulose sales volume increase of 12%, including a 72% increase in CC sales volume that was partially offset by a 29% decrease in CS sales volume.
-CC sales volume increased as our plants experienced higher operating rates compared to the prior period and also shifted to CC production in the current period due to lower orders for CS products.
-CS sales volume declined as we executed our CS leadership initiatives. Partially offsetting this decline was lower CS sales volume in the prior period as Chinese customers delayed orders due to the geopolitical uncertainty with Chinese and U.S. tariffs.
•Cellulose average sales price decrease of 9%, including a 10% decrease in CC average sales price that was partially offset by a 19% increase in CS average sales price.
-CS average sales price increase was driven by higher pricing of newly negotiated 2026 agreements.
-CC average sales price decline was due to softer global commodity pricing and product mix within the commodity portfolio.
Operating Income - Three Months Ended
|
Three Months Ended June 28, 2025
|
Gross Margin Changes Attributable to: |
Three Months Ended June 27, 2026
|
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(in millions, except percentages)
|
Sales Price |
Sales Volume/Mix/Other(a)
|
Cost | SG&A and other | |||||||||||||||||||||||||||||||
| HPC operating income | $ | 20 | $ | 15 | $ | (8) | $ | - | $ | 2 | $ | 29 | |||||||||||||||||||||||
| Operating margin % | 7.4 | % | 4.8 | % | (3.3) | % | - | % | 0.7 | % | 9.6 | % | |||||||||||||||||||||||
(a)Computed based on contribution margin.
Operating income of our High Purity Cellulose segment for the second quarter increased $9 million, or 45%, compared to the same prior year quarter, driven by:
•Increase in CS average sales price.
•Lower wood costs.
•Lower fixed costs due to reduced discretionary spending.
•Improved operating rates.
These increases were partially offset by:
•Lower CS sales volumes and mix resulting from higher CC sales.
•Lower CC pricing and mix.
•Higher inflation of chemicals and logistics costs.
Operating Income (Loss) - Six Months Ended
|
Six Months Ended June 28, 2025
|
Gross Margin Changes Attributable to: |
Six Months Ended June 27, 2026
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(in millions, except percentages)
|
Sales Price |
Sales Volume/Mix/Other(a)
|
Cost | SG&A and other | |||||||||||||||||||||||||||||||
| HPC operating income (loss) | $ | 40 | $ | 21 | $ | (36) | $ | (41) | $ | 2 | $ | (14) | |||||||||||||||||||||||
| Operating margin % | 7.2 | % | 3.4 | % | (6.2) | % | (7.3) | % | 0.4 | % | (2.5) | % | |||||||||||||||||||||||
(a)Computed based on contribution margin.
Operating results of our High Purity Cellulose segment for the six months ended June 27, 2026 declined $54 million, or 135%, compared to the same prior year period, driven by:
•Non-cash permanent idling charges of $41 million in the current period as a result of the decision to permanently cease DWP production at the Temiscaming HPC plant.
•Lower CS sales volumes and mix resulting from higher CC sales.
•Lower CC pricing and mix.
•Higher inflation of chemicals and logistics costs.
These decreases were partially offset by:
•Increase in CS average sales price.
•Lower wood costs.
•Lower energy costs, driven by a $3 million higher benefit from sales of excess emission allowances and certificates of energy savings associated with Tartas operations in the current period compared to the prior period.
•Lower fixed costs due to reduced discretionary spending.
•Improved operating rates.
•Insurance recovery of $5 million related to the 2024 Jesup plant fire.
Paperboard & High Yield Pulp
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in millions, unless otherwise stated) | June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| Net sales | $ | 75 | $ | 68 | $ | 131 | $ | 142 | |||||||||||||||
| Operating loss | $ | (27) | $ | (7) | $ | (37) | $ | (16) | |||||||||||||||
| Average sales price ($ per MT) | |||||||||||||||||||||||
| PBD & HYP | $ | 800 | $ | 885 | $ | 834 | $ | 877 | |||||||||||||||
| Paperboard | $ | 1,229 | $ | 1,346 | $ | 1,213 | $ | 1,333 | |||||||||||||||
| High Yield Pulp | $ | 487 | $ | 509 | $ | 493 | $ | 514 | |||||||||||||||
| Sales volume (thousands of MTs) | |||||||||||||||||||||||
| PBD & HYP | 93 | 76 | 157 | 162 | |||||||||||||||||||
| Paperboard | 39 | 34 | 74 | 72 | |||||||||||||||||||
| High Yield Pulp | 54 | 42 | 83 | 90 | |||||||||||||||||||
Net Sales - Three Months Ended
|
Three Months Ended June 28, 2025
|
Changes Attributable to: |
Three Months Ended June 27, 2026
|
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| (in millions) | Price | Volume/Mix | |||||||||||||||||||||
| Paperboard | $ | 47 | $ | (5) | $ | 6 | $ | 48 | |||||||||||||||
| High Yield Pulp | 21 | (1) | 7 | 27 | |||||||||||||||||||
| PBD & HYP net sales | $ | 68 | $ | (6) | $ | 13 | $ | 75 | |||||||||||||||
Net sales of our Paperboard & High Yield Pulp segment for the second quarter increased $7 million, or 10%, compared to the same prior year quarter, driven by:
•Total sales volume increase of 22%, including 15% and 29% increases for PBD and HYP, respectively, due to:
-Higher sales of folding packaging PBD grades due to increased focus on this market segment.
-Higher HYP sales due to the timing of Q1 shipments, primarily related to delayed orders to Indonesia.
These increases were partially offset by:
•Total average sales price decrease of 10%, including 9% and 4% decreases for PBD and HYP, respectively, driven by:
-Increased competitive activity in PBD due to the startup of new U.S. capacity in mid-year 2025.
-Continued oversupply of domestic HYP in Asia.
-Weaker demand for paper and packaging materials due to global economic uncertainty.
Net Sales - Six Months Ended
|
Six Months Ended June 28, 2025
|
Changes Attributable to: |
Six Months Ended June 27, 2026
|
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| (in millions) | Price | Volume/Mix | |||||||||||||||||||||
| Paperboard | $ | 96 | $ | (9) | $ | 3 | $ | 90 | |||||||||||||||
| High Yield Pulp | 46 | (2) | (3) | 41 | |||||||||||||||||||
| PBD & HYP net sales | $ | 142 | $ | (11) | $ | - | $ | 131 | |||||||||||||||
Net sales of our Paperboard & High Yield Pulp segment for the six months ended June 27, 2026 decreased $11 million, or 8%, compared to the same prior year period, driven by:
•Total average sales price decrease of 5%, including 9% and 4% decreases for PBD and HYP, respectively.
•Total sales volume decrease of 3%, including an 8% decrease for HYP that was partially offset by a 3% increase for PBD.
These decreases were driven by:
•Increased competitive activity in PBD due to the startup of new U.S. capacity in mid-year 2025.
•Continued oversupply of domestic HYP in Asia.
•Weaker demand for paper and packaging materials due to global economic uncertainty.
Partially offsetting these decreases were higher sales of folding packaging PBD grades due to increased focus on this market segment.
Operating Loss - Three Months Ended
|
Three Months Ended June 28, 2025
|
Gross Margin Changes Attributable to: |
Three Months Ended June 27, 2026
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(in millions, except percentages)
|
Sales Price |
Sales Volume/Mix(a)
|
Cost | SG&A and other | |||||||||||||||||||||||||||||||
| PBD & HYP operating loss | $ | (7) | $ | (6) | $ | 4 | $ | (6) | $ | (12) | $ | (27) | |||||||||||||||||||||||
| Operating margin % | (10.3) | % | (10.7) | % | 9.0 | % | (8.0) | % | (16.0) | % | (36.0) | % | |||||||||||||||||||||||
(a)Computed based on contribution margin.
Operating loss of our Paperboard & High Yield Pulp segment for the second quarter increased $20 million, or 286%, compared to the same prior year quarter, driven by:
•HYP non-cash asset impairment of $13 million in the current quarter.
•Decreases in average sales prices discussed above.
•Impacts of the planned maintenance outage and market-related downtime taken in the current quarter.
Partially offsetting these decreases were the increases in sales volumes discussed above.
Operating Loss - Six Months Ended
|
Six Months Ended June 28, 2025
|
Gross Margin Changes Attributable to: |
Six Months Ended June 27, 2026
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(in millions, except percentages)
|
Sales Price |
Sales Volume/Mix(a)
|
Cost | SG&A and other | |||||||||||||||||||||||||||||||
| PBD & HYP operating loss | $ | (16) | $ | (11) | $ | - | $ | - | $ | (10) | $ | (37) | |||||||||||||||||||||||
| Operating margin % | (11.3) | % | (9.3) | % | - | % | - | % | (7.6) | % | (28.2) | % | |||||||||||||||||||||||
(a)Computed based on contribution margin.
Operating loss of our Paperboard & High Yield Pulp segment for the six months ended June 27, 2026 increased $21 million, or 131%, compared to the same prior year period, driven by:
•HYP non-cash asset impairment of $13 million.
•Decreases in average sales prices discussed above.
•Impacts of the planned maintenance outage and market-related downtime taken in the current period.
•Increase in logistics costs due to higher ocean freight rates for shipments to Asia as a result of the current geopolitical environment.
•Higher wood costs.
Partially offsetting these decreases were:
•Lower energy costs due to higher offsetting electricity production and sales.
•Lower purchased pulp costs.
Corporate & Other
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
|
(in millions)
|
June 27, 2026 | June 28, 2025 | June 27, 2026 | June 28, 2025 | |||||||||||||||||||
| Operating loss | $ | (9) | $ | (14) | $ | (21) | $ | (40) | |||||||||||||||
The Corporate & Other operating loss for the second quarter improved $5 million, or 36%, compared to the same prior year quarter, driven by favorable foreign exchange rates in the current quarter compared to unfavorable rates in the prior quarter, partially offset by higher variable compensation costs.
The Corporate & Other operating loss for the six months ended June 27, 2026 improved $19 million, or 48%, compared to the same prior year period, driven by lower environmental remediation expense due to the $12 million charge incurred in the prior period and favorable foreign exchange rates in the current period compared to unfavorable rates in the prior period.
Liquidity and Capital Resources
Overview
Cash flows from operations, primarily driven by operating results, have historically been our primary source of liquidity and capital resources. As operating cash flows can be negatively impacted by fluctuations in market prices for our commodity products and changes in demand for all of our products, we maintain a key focus on cash, managing working capital closely and optimizing the timing and level of our capital expenditures. We believe our future cash flows from operations, availability under our ABL Credit Facility and our ability to access the capital markets, if necessary or desirable, will be adequate to fund our operations and anticipated long-term funding requirements, including capital expenditures, defined benefit plan contributions and repayment of debt maturities.
Our Board of Directors suspended our quarterly common stock dividend in September 2019. No dividends have been declared since. The declaration and payment of future common stock dividends, if any, will be at the discretion of our Board of Directors and dependent upon our financial condition, results of operations, capital requirements and other factors that the Board of Directors deems relevant. In addition, our debt facilities place limitations on the declaration and payment of future dividends.
In January 2018, our Board of Directors authorized a $100 million common stock share buyback program. We have not repurchased shares under this program since 2018 and do not expect to utilize any of the remaining $60 million in unused authorization in the future.
Our global liquidity as of June 27, 2026 was $145 million and is summarized with our capital resources below:
| (in millions, except ratios) | June 27, 2026 | December 31, 2025 | |||||||||
| Cash and cash equivalents | $ | 57 | $ | 75 | |||||||
|
Availability under ABL Credit Facility(a)(b)
|
$ | 76 | $ | 72 | |||||||
|
Availability under short-term factoring facility(b)
|
$ | 12 | $ | 10 | |||||||
|
Total debt(b)
|
$ | 775 | $ | 779 | |||||||
| Stockholders' equity | $ | 195 | $ | 317 | |||||||
| Total capitalization (total debt plus stockholders' equity) | $ | 970 | $ | 1,096 | |||||||
| Debt to capital ratio | 80 | % | 71 | % | |||||||
(a)Amounts available under the ABL Credit Facility fluctuate based on eligible accounts receivable and inventory levels. At June 27, 2026, we had $175 million of gross availability and net available borrowings of $76 million after taking into account the facility's quarter end balance of $36 million, outstanding letters of credit of $37 million and required availability of $26 million to avoid triggering the facility's fixed charge coverage ratio covenant.
(b)See Note 7-Debt and Finance Leases to our Financial Statements for further information.
As of June 27, 2026, we were in compliance with all financial and other covenants under our debt agreements.
Other Sources of Cash
Asset Financing Obligation
In March 2026, we entered into a sale-leaseback agreement for the equipment of our chip mills located in Georgia and our ERP systems for net proceeds of $20 million. The arrangement has an initial term of 33 months with monthly rental payments of $0.7 million. We retain a one dollar ($1.00) purchase option at the end of the lease term.
SWEN Investment
In 2024, we secured €30 million to be provided by SWEN in return for a 20% preferred equity interest in BioNova. We received €15 million from SWEN in 2024. Subsequent funding is contingent on the achievement of certain project milestones.
BioNova Term Loan
In 2024, we entered into a credit agreement that authorizes up to €37 million in seven- and eight-year secured term loan tranches. Drawdowns may be made through November 2026 and are restricted to capital expenditures and development activities related to the BioNova platform. As of June 27, 2026, no borrowings were outstanding under the BioNova Term Loan. We may evaluate alternatives with respect to the facility if it is not utilized prior to the end of the availability period and arrange for an amendment of the credit agreement.
Cash Requirements
Contractual Commitments
Our principal contractual commitments include standby letters of credit, surety bonds, guarantees, purchase obligations and leases. We utilize arrangements such as standby letters of credit and surety bonds to provide credit support for certain suppliers and vendors in case of their default on critical obligations, collateral for certain of our self-insurance programs and guarantees for the completion of our remediation of environmental liabilities. As part of our ongoing operations, we also periodically issue guarantees to third parties. Our primary purchase obligation payments relate to natural gas, electricity and wood chips purchase contracts. There have been no material changes outside the ordinary course of business to the purchase obligations presented in our 2025 Form 10-K during the six months ended June 27, 2026.
Cash Flows
| Six Months Ended | |||||||||||
| (in millions) | June 27, 2026 | June 28, 2025 | |||||||||
| Cash flows provided by (used in): | |||||||||||
| Operating activities | $ | 37 | $ | 10 | |||||||
| Investing activities | $ | (45) | $ | (75) | |||||||
| Financing activities | $ | (9) | $ | 1 | |||||||
Cash provided by operating activities increased $27 million compared to the prior year period driven by higher working capital inflows, lower payout on our short-term incentive plan in 2026 compared to 2025 and lower interest paid on long-term debt due to the timing of payments.
Cash used in investing activities decreased $30 million compared to the prior year period due to lower custodial and strategic capital spend, as well as current year proceeds from our insurance claim related to the 2024 fire at our Jesup plant.
Cash outflows from financing activities increased $10 million compared to the prior year period primarily due to net repayments of short- and long-term debt in the current period, inclusive of the $20 million net proceeds received for the sale-leaseback transaction, compared to net borrowings in the prior period, partially offset by lower repurchases of common stock to satisfy tax withholding requirements related to stock-based compensation.
Performance and Liquidity Indicators
The discussion below is presented to enhance the reader's understanding of our operating performance, liquidity and ability to generate cash and satisfy rating agency and creditor requirements. This information includes the non-GAAP financial measures of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow. These measures are not defined by GAAP and our discussion of them is not intended to conflict with or change any of our GAAP disclosures provided in this report.
We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding our financial condition and results of operations. Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses, to determine management incentive compensation and for budgeting, forecasting and planning purposes. Our management considers these non-GAAP financial measures, in addition to operating income, to be important in estimating our enterprise and stockholder values and for making strategic and operating decisions. In addition, analysts, investors and creditors use these non-GAAP financial measures when analyzing our operating performance, financial condition and cash-generating ability. We use EBITDA and Adjusted EBITDA as performance measures and Adjusted Free Cash Flow as a liquidity measure.
We do not consider non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Financial Statements. In addition, they reflect the exercise of management's judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. To compensate for these limitations, reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures are provided below. Non-GAAP financial measures are not necessarily indicative of results that may be generated in future periods and should not be relied upon, in whole or part, in evaluating our financial condition, results of operations or future prospects.
We do not provide a reconciliation of forward-looking Adjusted EBITDA to its most directly comparable GAAP financial measure due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations. These amounts may be material and could result in the projected GAAP financial measure being materially different than the projected non-GAAP measure. As such, a reconciliation for our forward-looking non-GAAP financial measure is not available without unreasonable effort.
EBITDA and Adjusted EBITDA
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for items that management believes are not representative of our core operations.
Income (loss) from continuing operations is reconciled to EBITDA and Adjusted EBITDA from continuing operations by segment, as follows:
|
Three Months Ended June 27, 2026
|
|||||||||||||||||||||||
|
(in millions)
|
High Purity Cellulose | Paperboard & High Yield Pulp | Corporate & Other | Total | |||||||||||||||||||
| Income (loss) from continuing operations | $ | 29 | $ | (27) | $ | (35) | $ | (33) | |||||||||||||||
| Income from continuing operations attributable to redeemable noncontrolling interest | - | - | - | - | |||||||||||||||||||
| Income (loss) from continuing operations attributable to RYAM | 29 | (27) | (35) | (33) | |||||||||||||||||||
| Depreciation and amortization | 27 | 4 | 1 | 32 | |||||||||||||||||||
| Interest expense, net | - | - | 25 | 25 | |||||||||||||||||||
| Income tax expense | - | - | 2 | 2 | |||||||||||||||||||
| EBITDA-continuing operations attributable to RYAM | 56 | (23) | (7) | 26 | |||||||||||||||||||
| Asset impairment | - | 13 | - | 13 | |||||||||||||||||||
| Suspension charges | 1 | - | - | 1 | |||||||||||||||||||
| Adjusted EBITDA-continuing operations attributable to RYAM | $ | 57 | $ | (10) | $ | (7) | $ | 40 | |||||||||||||||
|
Three Months Ended June 28, 2025
|
|||||||||||||||||||||||
|
(in millions)
|
High Purity Cellulose | Paperboard & High Yield Pulp | Corporate & Other | Total | |||||||||||||||||||
| Income (loss) from continuing operations | $ | 20 | $ | (8) | $ | (378) | $ | (366) | |||||||||||||||
| Income from continuing operations attributable to redeemable noncontrolling interest | - | - | - | - | |||||||||||||||||||
| Income (loss) from continuing operations attributable to RYAM | 20 | (8) | (378) | (366) | |||||||||||||||||||
| Depreciation and amortization | 24 | 6 | 1 | 31 | |||||||||||||||||||
| Interest expense, net | - | - | 23 | 23 | |||||||||||||||||||
| Income tax expense | - | - | 339 | 339 | |||||||||||||||||||
| EBITDA-continuing operations attributable to RYAM | 44 | (2) | (15) | 27 | |||||||||||||||||||
| Suspension charges | 1 | - | - | 1 | |||||||||||||||||||
| Adjusted EBITDA-continuing operations attributable to RYAM | $ | 45 | $ | (2) | $ | (15) | $ | 28 | |||||||||||||||
|
Six Months Ended June 27, 2026
|
|||||||||||||||||||||||
|
(in millions)
|
High Purity Cellulose | Paperboard & High Yield Pulp | Corporate & Other | Total | |||||||||||||||||||
| Loss from continuing operations | $ | (16) | $ | (36) | $ | (62) | $ | (114) | |||||||||||||||
| Income from continuing operations attributable to redeemable noncontrolling interest | - | - | - | - | |||||||||||||||||||
| Loss from continuing operations attributable to RYAM | (16) | (36) | (62) | (114) | |||||||||||||||||||
| Depreciation and amortization | 55 | 8 | 2 | 65 | |||||||||||||||||||
| Temiscaming HPC permanent idling charges - accelerated depreciation | 35 | - | - | 35 | |||||||||||||||||||
| Interest expense, net | - | - | 47 | 47 | |||||||||||||||||||
| Income tax benefit | - | - | (5) | (5) | |||||||||||||||||||
| EBITDA-continuing operations attributable to RYAM | 74 | (28) | (18) | 28 | |||||||||||||||||||
| Asset impairment | - | 13 | - | 13 | |||||||||||||||||||
| Temiscaming HPC permanent idling charges - other asset adjustments | 6 | - | - | 6 | |||||||||||||||||||
| Suspension charges | 1 | - | - | 1 | |||||||||||||||||||
| Adjusted EBITDA-continuing operations attributable to RYAM | $ | 81 | $ | (15) | $ | (18) | $ | 48 | |||||||||||||||
|
Six Months Ended June 28, 2025
|
|||||||||||||||||||||||
|
(in millions)
|
High Purity Cellulose | Paperboard & High Yield Pulp | Corporate & Other | Total | |||||||||||||||||||
| Income (loss) from continuing operations | $ | 40 | $ | (16) | $ | (422) | $ | (398) | |||||||||||||||
| Income from continuing operations attributable to redeemable noncontrolling interest | - | - | - | - | |||||||||||||||||||
| Income (loss) from continuing operations attributable to RYAM | 40 | (16) | (422) | (398) | |||||||||||||||||||
| Depreciation and amortization | 50 | 12 | - | 62 | |||||||||||||||||||
| Interest expense, net | - | - | 46 | 46 | |||||||||||||||||||
| Income tax expense | - | - | 334 | 334 | |||||||||||||||||||
| EBITDA-continuing operations attributable to RYAM | 90 | (4) | (42) | 44 | |||||||||||||||||||
| Suspension charges | 1 | - | - | 1 | |||||||||||||||||||
| Adjusted EBITDA-continuing operations attributable to RYAM | $ | 91 | $ | (4) | $ | (42) | $ | 45 | |||||||||||||||
Adjusted Free Cash Flow
Adjusted Free Cash Flow is a non-GAAP financial measure of cash generated during a period that is available for debt reduction, acquisitions and repurchases of our common stock. Beginning in the fourth quarter of 2025, Adjusted Free Cash Flow is defined as cash provided by operating activities less capital expenditures, net of proceeds from the sale of property, plant and equipment and insurance claims. Adjusted Free Cash Flow for the six months ended June 28, 2025 has been recalculated according to this new definition.
Cash provided by operating activities is reconciled to Adjusted Free Cash Flow as follows:
| Six Months Ended | |||||||||||
| (in millions) | June 27, 2026 | June 28, 2025 | |||||||||
| Cash provided by operating activities | $ | 37 | $ | 10 | |||||||
|
Capital expenditures, net(a)
|
(45) | (75) | |||||||||
| Adjusted Free Cash Flow | $ | (8) | $ | (65) | |||||||
(a)Net of proceeds from the sale of property, plant and equipment and insurance claims. Included in capital expenditures, net were strategic capital expenditures of $9 million and $13 million for the six months ended June 27, 2026 and June 28, 2025, respectively.
Rayonier Advanced Materials Inc. published this content on August 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 05, 2026 at 16:05 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]