Rayonier Advanced Materials Inc. · NYSE:RYAM

Rayonier Advanced Materials — Q1 2020 Earnings Presentation

21 slides from Rayonier Advanced Materials's earnings presentation, May 6, 2020

  1. Slide 1: First Quarter 2020 Financial Presentation Materials

    First Quarter 2020 Financial Presentation Materials

  2. Slide 2: Forward-Looking Statements Safe Harbor

    Forward-Looking Statements 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 financ

  3. Slide 3: 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

  4. Slide 4: Action in Response to COVID-19

    Action in Response to COVID-19 All Businesses Deemed Essential  Safety — Actively monitoring outbreak since January — COVID-19 Task Force setting guidelines and establishing protocols — Office and support functions working remotely — Operations practicing social distancing, supplementing personal p

  5. Slide 5: Q1'20 Financial Highlights

    Q1’20 Financial Highlights  Q1 Revenue: $410 million Revenue by Segment — 35% increase to Gross Margins  Q1 Operating Loss: $(12) million 19%  Q1 Adjusted EBITDA: $27 million; $17 million improvement from prior year 11% $410 million 58% — Cost improvements in High Purity Cellulose were offset by

  6. Slide 6: High Purity Cellulose

    High Purity Cellulose HPC Operating Income/(Loss) Bridge $ Millions Quarter Ended Mar 28, Dec 31, Mar 30, 0 34 (3) - 2020 2019 2019 (5) Key Financials ($ millions) Net Sales $250 $304 $286 (25) (23) Operating Income/(Loss) (5) (4) (3) Adjusted EBITDA 26 27 25 (13) (50) Q1 Price Volume / Cost SG&A /

  7. Slide 7: Forest Products

    Forest Products Forest Products Operating Income/(Loss) Bridge $ Millions Quarter Ended Mar 28, Dec 31, Mar 30, 4 4 2020 2019 2019 2 Key Financials ($ millions) 0 (1) Net Sales $82 $77 $75 3 (1) (2) (2) Operating Income/(Loss) (1) (4) (5) (4) Adjusted EBITDA 1 (1) (3) (6) (5) Q1 Price Volume / Cost

  8. Slide 8: Paperboard

    Paperboard Paperboard Operating Income/(Loss) Bridge $ Millions Quarter Ended Mar 28, Dec 31, Mar 30, 6 6 5 - 2020 2019 2019 Key Financials ($ millions) 3 Net Sales $50 $49 $47 Operating Income/(Loss) 5 3 (2) 0 1 Adjusted EBITDA 9 8 2 - (2) (3) Q1 Price Volume / Cost SG&A / Q1 2019 Sales Mix Other 2

  9. Slide 9: Pulp & Newsprint

    Pulp & Newsprint Pulp & Newsprint Operating Income/(Loss) Bridge $ Millions Quarter Ended Mar 28, Dec 31, Mar 30, 4 2 2020 2019 2019 0 Key Financials ($ millions) (4) 2 – Net Sales $47 $54 $51 4 (6) (8) Operating Income/(Loss) (6) (2) 2 (12) Adjusted EBITDA (4) ― 5 (14) (16) Q1 Price Volume / Cost -

  10. Slide 10: Consolidated Operating Income/(Loss) Bridge Q1 2019 to Q1 20

    Consolidated Operating Income/(Loss) Bridge Q1 2019 to Q1 2020 ($ Millions) 0 14 (12) (25) 41 (28) (50) (34) (5) (75) Q1 Price Volume / Cost SG&A / Q1 2019 Sales Mix Other 2020  $15 million improvement in Operating Income/(Loss) from prior year  Price declines impacted by 30% decrease in commodity

  11. Slide 11: Consolidated Operating Income/(Loss) Bridge Q4 2019 to Q1 20

    Consolidated Operating Income/(Loss) Bridge Q4 2019 to Q1 2020 ($ Millions) 0 21 (12) (25) 1 27 (32) (50) (29) (75) Q4 Price Volume / Cost SG&A / Q1 2019 Sales Mix Other 2020  $20 million improvement in Operating Income/(Loss) from sequential quarter  Improved prices in Forest Products offset by w

  12. Slide 12: Leverage and Liquidity

    Leverage and Liquidity New Covenant Ratio 5.6x 5.4x Summary: Net Secured Debt/EBITDA* 6.0x 5.0x 5.0x 4.5x 4.5x  Senior secured net leverage of 4.1x* vs 5.0x covenants of 5.4x 4.0x 3.0x 3.0x 3.0x 3.0x 3.0x 3.0x  Interest coverage ratio of 2.2x* vs covenant 3.0x Net Secured of 1.75x 2.0x Leverage Ra

  13. Slide 13: Corporate Governance Enhancements

    Corporate Governance Enhancements Board refreshment and other corporate governance updates  David Mariano and Ivona Smith to be appointed to the Board in May — Company nominated Mr. Mariano as Class III Director election at 2020 Annual Stockholders Meeting — Ms. Smith will be appointed as a Class I

  14. Slide 14: Market Assessment

    Market Assessment Impact to business from COVID-19 is uncertain Focused on controlling cost and preserving cash as markets recover  Cellulose specialties demand modestly impacted by COVID-19 with expectations remaining prices up ~2% and volumes down 7-8% on a contracted and agreed basis, 11-12% as

  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 March 28, 2020 Income (loss) from continuing operations $ (1) $ 5 $ (5) $ (5) $ (19) $ (25) Depreciation and amortization 2 4 1 30 — 38 Inter

  18. Slide 18: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) Three Months Ended March 28, December 31, 2020 2019 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 12 $ 19 Long-term debt & finance lease obligation 1,063 1,063 Total debt $ 1,075 $ 1,082 Original issue discount, premiums and

  19. Slide 19: Reconciliation of Non-GAAP Measures

    Reconciliation of Non-GAAP Measures ($ Millions) Three Months Ended March 28, March 30, Adjusted Free Cash Flows: 2020 2019 Cash provided by operating activities of continuing operations $ (13) $ (31) Capital expenditures (10) (27) Adjusted Free Cash Flows $ (23) $ (58) 19

  20. Slide 20: Reconciliation of Reported to Adjusted Earnings

    Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended March 28, 2020 December 31, 2019 March 30, 2019 Adjusted Operating Income (Loss) and Income (Loss) from Continuing Operations Per Diluted Per Diluted Per Diluted (a): $ Share $ Share $ Share Ope

  21. Slide 21: Key Index Pricing

    Key Index Pricing Q1’20 Q4’19 Q3’19 Q2’19 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 • $1,122 • $1,107 • $1,163 • $1,260 Commodity • Viscose Pulp delivered to C

Rayonier Advanced Materials — Q1 2020 Earnings Presentation on 6ix