Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q4 2016 Earnings Presentation
19 slides from Rayonier Advanced Materials's earnings presentation, Jan 31, 2017
Slide 1: Fourth Quarter 2016 Financial Presentation Materials
Fourth Quarter 2016 Financial Presentation Materials
Slide 2: 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 3: 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 4: Financial Highlights
Financial Highlights ($ Millions) Fourth Quarter Ended Full Year Ended 2016 2015 2016 2015 Sales $ 231 $ 242 $ 869 $ 941 Operating Income 26 29 138 120 Pro Forma Operating Income1 26 30 138 149 Net Income 11 13 73 55 Pro Forma Net Income1 11 14 67 73 EBITDA1 50 53 235 209 Pro Forma EBITDA1 50 54 226
Slide 5: Operating Income - Variance Analysis
Operating Income - Variance Analysis ($ Millions) 11 Pro Forma 30 Adjustments (16) Three Months Ended 5 3 4 29 26 Operating Income Operating Income 4Q 2015 Price Volume / Costs SG&A and Other 4Q 2016 Sales Mix 149 (54) 11 Twelve Months Ended 1 29 Pro Forma Adjustments 46 (14) 138 120 Operating Incom
Slide 6: Selected Financial and Operating Information
Selected Financial and Operating Information Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2016 2015 2016 2015 Sales Volume, thousands of metric tons Cellulose specialties 121 116 456 467 Commodity products 70 73 249 247 Total 191 189 705 714 Average Sale
Slide 7: Cost Improvement Initiatives
Cost Improvement Initiatives ($ Millions) 25 4 Year Total Cost Improvement 30 $125M - $140M 50 35 2015 2016 2017* 2018* White Space Achieved Targeted Total $85 million in Cost Improvements achieved through 2016 * Breakdown of expected future cost savings on a run-rate basis included for illustrative
Slide 8: Capital Resources & Liquidity
Capital Resources & Liquidity ($ Millions) Twelve Months Ended December 31, 2016 December 31, 2015 Cash Provided by Operating Activities $ 232 $ 202 Cash Used for Investing Activities (87) (78) Cash Provided by (Used for) Financing Activities 80 (89) Adjusted Free Cash Flows* 143 124 Debt Principal
Slide 9: 2017 Guidance
2017 Guidance ▪ Cellulose specialties (“CS”) prices 3% to 4% below 2016 average prices primarily due to lower acetate pricing and mix ▪ CS volumes flat to slightly down compared to 2016 due to the timing of revenue recognition ▪ Commodity sales volumes approximately 10% higher assuming a balanced vi
Slide 10: EBITDA Bridge 2016 Pro Forma to 2017 Guidance
EBITDA Bridge 2016 Pro Forma to 2017 Guidance 226 (35) 220 200 4 (25 - 30) 25 - 30 190 - 200 180 160 140 120 100 2016 CS Commodity Inflation Cost 2017 Pro Forma Price / Mix / Costs Price / Mix / Costs & Costs Improvements Guidance 10 The statements on this page should be considered “forward-looking
Slide 11: Outlook
Outlook ▪ Cellulose specialties — Acetate inventory issues working out of system with tow consumption relatively flat — Improving demand in ethers, tire cord & filtration — Competitive supply environment given strong U.S. dollar ▪ Improving commodity viscose markets due to strong underlying demand f
Slide 12: Strategic Pillars of Growth
Strategic Pillars of Growth Drive Future Growth and Stockholder Value Cost Market New Products Acquisitions Transformation Optimization EBITDA Growth Stockholder Value 12
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) Three Months Ended Twelve Months Ended December 31, December 31, 2016 2015 2016 2015 EBITDA Reconciliation Net Income $ 11 $ 13 $ 73 $ 55 Depreciation and amortization 24 24 88 89 Interest expense, net 9 9 35 37 Income tax expense 6 7 39 28 EBITDA $ 5
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) December 31, 2016 December 31, 2015 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 9 $ 8 Long-term debt & capital lease obligation 774 850 Total debt $ 783 $ 858 Original issue discount and debt issuance costs 9 11 Cash and ca
Slide 17: Reconciliation of Reported to Pro Forma Earnings
Reconciliation of Reported to Pro Forma Earnings ($ Millions, except per share amounts) Three Months Ended Twelve Months Ended December 31, December 31, 2016 2015 December 31, 2016 December 31, 2015 Per Per Per Per Diluted Diluted Diluted Diluted Pro Forma Operating Income and Net Income: $ Share $
Slide 18: Reconciliation of Guided Non-GAAP Measures
Reconciliation of Guided Non-GAAP Measures ($ Millions, except per share amounts) Minimum Maximum 2017 Net Income Guidance $ 41 $ 48 Income tax expense 27 30 Interest expense, net 37 37 Depreciation and amortization 85 85 2017 EBITDA Guidance $ 190 $ 200 Minimum Maximum 2017 Operating Cash Flows Gui
Slide 19: Debt Maturity Schedule
Debt Maturity Schedule Millions $800 4 $700 251 $600 31 $500 $400 $300 506 240 509 $200 $100 10 11 19 3 $0 Total 2017 2018 2019 2020 2021 Thereafter Senior Notes 5.5% Term A-1 Loan Facility Term A-2 Loan Facility Capital Lease Obligation 19
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