Rayonier Advanced Materials Inc. · NYSE:RYAM

Rayonier Advanced Materials — Q2 2020 Earnings Presentation

22 slides from Rayonier Advanced Materials's earnings presentation, Aug 5, 2020

  1. Slide 1: Second Quarter 2020 Financial Presentation Materials

    Second Quarter 2020 Financial Presentation Materials

  2. Slide 2: Safe Harbor: Forward-Looking Statements

    Safe Harbor Forward-Looking Statements 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 financ

  3. Slide 3: Safe Harbor: Business and Operating Risks

    Safe Harbor Business and Operating Risks Our businesses we operate are highly competitive and many of them are cyclical, especially in commodity markets, which may result in fluctuations in pricing and volume that can adversely impact our business, financial condition and results of operations; Our

  4. Slide 4: Non-GAAP Financial Measures

    Non-GAAP Financial Measures These presentation materials contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted operating income, adjusted income (loss) from continuing operations and adjusted net debt. These non-GAAP measures are reconcile

  5. Slide 5: Q2'20 Financial Highlights

    Q2’20 Financial Highlights  Results negatively impacted by COVID-19 related demand Revenue by Segment weakness and logistics issues 18%  Q2 Revenue of $397 million and Income/(Loss) from Continuing Operations of $(13) million 10% $397  Q2 Adjusted EBITDA of $19 million; $2 million below Q2’19 mil

  6. Slide 6: High Purity Cellulose

    High Purity Cellulose HPC Operating Income/(Loss) Bridge $ Millions Quarter Ended Jun 27, Mar 28, Jun 29, 30 2020 2020 2019 15 Key Financials ($ millions) 7 24 2 7 Net Sales $255 $250 $269 0 Operating Income/(Loss) 7 (5) 7 (15) (18) Adjusted EBITDA 31 26 34 (8) (30) Q2 Price Volume / Cost SG&A / Q2

  7. Slide 7: Forest Products

    Forest Products Forest Products Operating Income/(Loss) Bridge $ Millions Quarter Ended Jun 27, Mar 28, Jun 29, 0 1 2020 2020 2020 (4) 12 (4) Key Financials ($ millions) (8) 5 Net Sales $70 $82 $81 (12) Operating Income/(Loss) (4) (1) (16) (16) Adjusted EBITDA (2) 1 (14) (16) (6) (20) Q2 Price Volum

  8. Slide 8: Paperboard

    Paperboard Paperboard Operating Income/(Loss) Bridge $ Millions Quarter Ended Jun 27 , Mar 28, Jun 29, 8 8 ‒ 6 2020 2020 2019 6 Key Financials ($ millions) 4 Net Sales $43 $50 $50 2 1 Operating Income/(Loss) 6 5 1 0 (1) Adjusted EBITDA 10 9 5 (2) (2) (4) Q2 Price Volume / Cost SG&A / Q2 2019 Sales M

  9. Slide 9: Pulp & Newsprint

    Pulp & Newsprint Pulp & Newsprint Operating Income/(Loss) Bridge $ Millions Quarter Ended Jun 27, Mar 28, Jun 29, 8 6 2020 2020 2020 4 Key Financials ($ millions) 0 (6) Net Sales $43 $47 $65 (4) 1 Operating Income/(Loss) (6) (6) 6 1 (8) (6) Adjusted EBITDA (4) (4) 8 (8) (12) Q2 Price Volume / Cost S

  10. Slide 10: Consolidated Operating Income/(Loss)

    Consolidated Operating Income/(Loss) Bridge Q2 2019 to Q2 2020 ($ Millions) 0 46 (15) (15) (2) (15) (30) (24) (20) (45) (60) Q2 2019 Price Volume / Cost SG&A / Q2 2020 Sales Mix Other  Operating Loss of $15 million comparable to prior year  Significant price impacts from commodity High Purity Cell

  11. Slide 11: Amendment

    Amendment  Provides additional covenant flexibility and increased liquidity Benefits Requirements  Financial flexibility & operational runway to  Increased LIBOR floor from 0% to 1% manage through COVID-19 via relief on  Leverage test changed to Gross Secured covenants Debt to EBITDA from Net Se

  12. Slide 12: Leverage and Liquidity

    Leverage and Liquidity Gross Secured Debt/Covenant EBITDA* Summary: 6.7x 6.5x 7.0x 6.2x 6.3x 6.0x  Senior secured gross leverage of 4.8x* 6.0x 5.8x 5.0x vs covenants of 6.2x 5.0x 4.3x 4.0x — Secured Debt of $588 million 3.0x Gross Secured Leverage Ratio  Interest coverage ratio of 2.0x* vs 2.0x 1.

  13. Slide 13: Action in Response to COVID-19

    Action in Response to COVID-19 Impact to business from COVID-19 is uncertain Focused on controlling cost and preserving cash as markets recover  Safety — Operations practicing social distancing, supplementing personal protection equipment, limiting outside contractors/visitors and enhancing sanitat

  14. Slide 14: Well-Positioned for Economic Recovery

    Well-Positioned for Economic Recovery  Current earnings well below potential in a post-COVID environment  Global leader in Cellulose Specialties (“CS”)  ~1 million metric tons of capacity: 50% CS and 50% commodity pulp High Purity  Go-to-Market strategy helped stabilized CS price in 2020 Cellulo

  15. Slide 15: Appendix

    RAYONIER Advanced Materials. Appendix

  16. Slide 16: Definitions of Non-GAAP Measures

    Definitions of Non-GAAP Measures EBITDA is defined as income from continuing operations 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 perfo

  17. Slide 17: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) Forest Pulp & High Purity Corporate Three Months Ended: Products Paperboard Newsprint Cellulose & Other Total Jun 27, 2020 Income (loss) from continuing operations $ (4) $ 6 $ (5) $ 5 $ (16) $ (14) Depreciation and amortization 2 4 1 26 2 35 Interest

  18. Slide 18: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) Three Months Ended Jun 27, Mar 28, 2020 2020 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 14 $ 12 Long-term debt & finance lease obligation 1,061 1,063 Total debt $ 1,075 $ 1,075 Original issue discount, premiums and debt is

  19. Slide 19: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) Six Months Ended Jun 27, Jun 29, Adjusted Free Cash Flows: 2020 2019 Cash provided by operating activities of continuing operations $ 11 $ 4 Capital expenditures (17) (50) Adjusted Free Cash Flows $ (7) $ (46) 19

  20. Slide 20: Reconciliation of Reported to Adjusted Earnings

    Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended Jun 27, 2020 Mar 28, 2020 Jun 29, 2019 Adjusted Operating Income (Loss) and Income (Loss) from Continuing Operations Per Diluted Per Diluted Per Diluted (a): $ Share $ Share $ Share Operating In

  21. Slide 21: Commodity Viscose and NBSK Historical Index

    Commodity Viscose and NBSK* Historical Index Commodity HPC prices well below historical average $1,000 $900 $800 $700 $600 $500 DWP 5-year Average (2015-2019) $865 $400 DWP June 2020 $616 $300 NBSK 5-year Average (2015-2019) $705 $200 NBSK June 2020 $570 $100 $0 2015 2016 2017 2018 2019 2020 Hawkins

  22. Slide 22: Key Index Pricing

    Key Index Pricing Q2’20 Q1’20 Q4’19 Q3’19 Average Average Average Average Product Index* Index Price Index Price Index Price Index Price Cellulose • None • N/A • N/A • N/A • N/A Specialties High Purity • Bleached Kraft Fluff • $1,183 • $1,122 • $1,107 • $1,163 • Commodity • Viscose Pulp delivered to

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