Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q3 2016 Earnings Presentation
19 slides from Rayonier Advanced Materials's earnings presentation, Nov 1, 2016
Slide 1: Third Quarter 2016 Financial Presentation Materials
Third Quarter 2016 Financial Presentation Materials
Slide 2: Non-GAAP Financial Measures
Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted free cash flows, pro forma operating income, pro forma net income and adjusted net debt. These non-GAAP measures are reconciled to each of their respective most directly c
Slide 3: Safe Harbor
Safe Harbor Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Rayonier Advanced Materials’ future events, developments or financial or operational performan
Slide 4: Financial Highlights
Financial Highlights ($ Millions) Quarter Ended Nine Months Ended 3Q 2016 3Q 2015 3Q 2016 3Q 2015 Sales $ 207 $ 257 $ 638 $ 700 Operating Income 41 58 112 90 Pro Forma Operating Income1 41 60 112 118 Net Income 22 32 62 42 Pro Forma Net Income1 22 33 56 60 EBITDA1 64 81 185 155 Pro Forma EBITDA1 64
Slide 5: Operating Income - Variance Analysis
Operating Income - Variance Analysis 21 ($ Millions) Pro Forma 60 Adjustments (16) Three Months Ended (22) 2 17 58 Operating Income 41 Operating Income 3Q 2015 Price Volume / Costs SG&A and Other 3Q 2016 Sales Mix 118 (38) 281 6 43 Nine Months Ended Pro Forma Adjustments (17) 112 90 Operating Income
Slide 6: Selected Financial and Operating Information
Selected Financial and Operating Information Three Months Ended Nine Months Ended September 24, September 26, September 24, September 26, 2016 2015 2016 2015 Sales Volume, thousands of metric tons Cellulose specialties 116 133 335 352 Commodity products 49 61 179 174 Total 165 194 514 526 Average Sa
Slide 7: Transformation Initiative
Cost Improvement Initiatives ($ Millions) 30 Transformation Initiative 4 Year Total Cost Improvement 2016 Cost Savings $75M - $90M 25 $45M - $50M $125M - $140M 35 25 15 35 2015 Actual 2015 to be realized in 2016 2016 2017* 2018* White Space Achieved Targeted Total $75 million achieved from January 2
Slide 8: 2016 Full Year Guidance
2016 Full Year Guidance ▪ Cellulose specialties (“CS”) prices 6% to 7% below 2015 average prices ▪ CS volumes down 4% to 5% from 2015 ▪ Commodity sales volumes expected to be flat with higher viscose volumes in the fourth quarter ▪ Net income expected to be $66 to $72 million ▪ Pro forma EBITDA expe
Slide 9: Capital Resources & Liquidity
Capital Resources & Liquidity ($ Millions) Nine Months Ended September 24, 2016 September 26, 2015 Cash Provided by Operating Activities $ 181 $ 152 Cash Used for Investing Activities (56) (60) Cash Provided by (Used for) Financing Activities 94 (58) Adjusted Free Cash Flows* 123 92 Debt Principal P
Slide 10: Outlook
Outlook ▪ Cellulose specialties — Continued acetate demand weakness — Improving demand in ethers, tire cord & filtration — Excess capacity with highly competitive environment — Global currencies vs. US$ benefiting competitors ▪ Anticipate 2017 acetate pricing down approximately 2% from 20161 ▪ 2017
Slide 11: Strategic Pillars
Strategic Pillars Enhanced Strategic Focus Will Drive Future Growth and Stockholder Value Market External Transformation New Products Optimization Growth Continuous Improvement Customer Focus Innovation Diversification EBITDA Growth Stockholder Value 11
Slide 12: Innovation Platform
Innovation Platform : Cellulose generation processing @ cellulose technolo fibers i 7 Breakthroughs , @ from cellulose co-products RAYONIER ): Advanced Materials.
Slide 13: Appendix
RAYONIER Advanced Materials. Appendix
Slide 14: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as earnings before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative to the ass
Slide 15: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Nine Months Ended September 24, 2016 September 26, 2015 EBITDA Reconciliation Net Income $ 62 $ 42 Depreciation and amortization 64 65 Interest expense, net 26 27 Income tax expense 33 21 EBITDA $ 185 $ 155 Non-cash impairment charge — 28 One-time sep
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) September 24, 2016 September 26, 2015 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 8 $ 8 Long-term debt 775 872 Total debt $ 783 $ 880 Original issue discount and debt issuance costs 8 11 Cash and cash equivalents (320) (100
Slide 17: Reconciliation of Reported to Pro Forma Earnings
Reconciliation of Reported to Pro Forma Earnings ($ Millions, except per share amounts) Three Months Ended Nine Months Ended September 26, September 24, 2016 June 25, 2016 2015 September 24, 2016 September 26, 2015 Per Per Per Per Per Pro Forma Operating Income and Diluted Diluted Diluted Diluted Di
Slide 18: Reconciliation of Guided Non-GAAP Measures
Reconciliation of Guided Non-GAAP Measures ($ Millions, except per share amounts) Minimum Maximum 2016 Pro Forma EBITDA Guidance $ 215 $ 225 Gain on debt extinguishment 9 9 2016 EBITDA Guidance 224 234 Income tax expense1 35 39 Interest expense, net 35 35 Depreciation and amortization 88 88 2016 Net
Slide 19: Debt Maturity Schedule
Debt Maturity Schedule Millions $800 $700 253 $600 240 $500 33 $400 $300 506 506 $200 $100 4 10 11 18 3 $0 Total 2016 2017 2018 2019 2020 Thereafter Senior Notes 5.5% Term A-1 Loan Facility Term A-2 Loan Facility Revolver ($250m Line of Credit) 19
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