Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q3 2020 Earnings Presentation
20 slides from Rayonier Advanced Materials's earnings presentation, Nov 7, 2020
Slide 1: Third Quarter 2020 Financial Presentation Materials
Third Quarter 2020 Financial Presentation Materials
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
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
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
Slide 5: Q3'20 Financial Highlights
Q3’20 Financial Highlights Q3 Revenue of $424 million with Operating Income of $17 Revenue by Segment million — Gross margins up 200% from prior year benefiting from cost 23% reduction activity and higher lumber prices $424 Q3 Adjusted EBITDA of $55 million; $19 million above Q3’19 9% million 57
Slide 6: High Purity Cellulose
High Purity Cellulose HPC Operating Income/(Loss) Bridge Quarter Ended $ Millions 10 Sep 26, Jun 27, Sep 28, 7 8 2020 2020 2019 5 Key Financials ($ millions) 0 Net Sales $253 $255 $268 Operating Income/(Loss) 8 7 7 (5) Adjusted EBITDA 36 31 41 (10) Q3 2019 Price Volume / Cost SG&A / Q3 2020 Sales Mi
Slide 7: Forest Products
Forest Products Forest Products Operating Income/(Loss) Bridge $ Millions Quarter Ended Sep 26, Jun 27, Sep 28, 30 25 2020 2020 2019 20 Key Financials ($ millions) Net Sales $103 $70 $65 10 Operating Income/(Loss) 25 (4) (5) 0 Adjusted EBITDA 29 (2) (3) (5) (10) Q3 2019 Price Volume / Cost SG&A / Q3
Slide 8: Paperboard
Paperboard Paperboard Operating Income/(Loss) Bridge $ Millions Quarter Ended Sep 26, Jun 27, Sep 28, 4 3 2020 2020 2019 2 2 Key Financials ($ millions) Net Sales $47 $43 $54 0 Operating Income/(Loss) 3 6 2 (2) Adjusted EBITDA 7 10 7 (4) Q3 2019 Price Volume / Cost SG&A / Q3 2020 Sales Mix Other Pap
Slide 9: Pulp & Newsprint
Pulp & Newsprint Pulp & Newsprint Operating Income/(Loss) Bridge Quarter Ended $ Millions Sep 26, Jun 27, Sep 28, 2 2020 2020 2019 0 Key Financials ($ millions) (2) Net Sales $38 $43 $46 (4) (4) Operating Income/(Loss) (6) (6) (4) (6) (6) Adjusted EBITDA (4) (4) (1) (8) (10) Q3 2019 Price Volume / C
Slide 10: Consolidated Operating Income/(Loss)
Consolidated Operating Income/(Loss) Bridge Q3 2019 to Q3 2020 ($ Millions) 30 25 17 20 15 10 5 0 (5) (10) (8) (15) Q3 2019 Price Volume / Cost SG&A / Q3 2020 Sales Mix Other Operating Income of $17 million; up $25 million from prior year Significant improvement to lumber price in Forest Product
Slide 11: Leverage and Liquidity
Leverage and Liquidity Gross Secured Debt/Covenant EBITDA* Summary: 8.0x 6.7x 6.5x 5.8x 6.2x 6.3x 6.0x Senior secured gross leverage of 4.0x* 6.0x 5.0x vs covenants of 6.65x. 4.3x 4.0x — Secured Debt of $592 million Gross Secured Leverage Ratio Interest coverage ratio of 2.4x* vs 2.0x Covenant R
Slide 12: Delivering against 2020 Financial Goals & Adapting to COVID-19
Delivering against 2020 Financial Goals & Adapting to COVID-19 Reduce Costs and Improve Free Cash Flow Goal Actions Remain compliant with financial covenants despite Amended financial covenants in June to ensure compliance and global market uncertainty increase liquidity in response to COVID-19
Slide 13: Key Investment Highlights
Key Investment Highlights Leader in High-Value Cellulose Specialties with five operating lines Broad and Diversified Portfolio of Natural-based Products Experienced Management Team Taking Decisive Actions in Challenging Market to Control Costs and Improve Liquidity Adequate Liquidity and Financial F
Slide 14: Appendix
RAYONIER Advanced Materials. Appendix
Slide 15: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as income from continuing operations before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is perfo
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Forest Pulp & High Purity Corporate Three Months Ended: Products Paperboard Newsprint Cellulose & Other Total Sep 26, 2020 Income (loss) from continuing operations $ 26 $ 3 $ (5) $ 8 $ (4) $ 29 Depreciation and amortization 3 4 1 28 1 37 Interest expe
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Sep 26, Dec 31, 2020 2019 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 16 $ 19 Short-term factoring facility – France 2 — Long-term debt & finance lease obligation 1,062 1,063 Total debt $ 1,080 $ 1,082 Original issue discou
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Nine Months Ended Sep 26, Sep 28, Adjusted Free Cash Flows: 2020 2019 Cash provided by operating activities of continuing operations $ 63 $ 5 Capital expenditures (29) (63) Adjusted Free Cash Flows $ 34 $ (58) 18
Slide 19: Reconciliation of Reported to Adjusted Earnings
Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended Sep 26, 2020 Jun 27, 2020 Sep 28, 2019 Adjusted Operating Income (Loss) and Income (Loss) from Continuing Operations Per Diluted Per Diluted Per Diluted (a): $ Share $ Share $ Share Operating In
Slide 20: Key Index Pricing
Key Index Pricing Q3’20 Q2’20 Q1’20 Q4’19 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 • $1,175 • $1,183 • $1,122 • $1,107 Commodity • Viscose Pulp delivered to C
Rayonier Advanced Materials — Q3 2020 Earnings Presentation on 6ix