Rayonier Advanced Materials Inc. · NYSE:RYAM
Rayonier Advanced Materials — Q4 2019 Earnings Presentation
21 slides from Rayonier Advanced Materials's earnings presentation, Feb 26, 2020
Slide 1: Fourth Quarter 2019 Financial Presentation Materials
Fourth Quarter 2019 Financial Presentation Materials
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
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
Slide 4: 2019 Financial Summary
2019 Financial Summary Revenue by Product 2019 Revenue: $1.8 billion Pulp 2019 Operating Loss: $83 million; Adjusted EBITDA: $76 million Newsprint 6% Acetate — High Purity Cellulose impacted by lower prices for commodity products, 5% 21% reliability issues in the first half of 2019 and a decline
Slide 5: Recent Market Developments
Recent Market Developments Action on Tariffs on Imported Goods into China — Chinese government announced a notice to eliminate the tariff on certain raw material purchases — Applications are due by March 2 — Dissolving wood pulp (including Cellulose Specialties and viscose) and fluff pulp are elig
Slide 6: Consolidated Operating Income
Consolidated Operating Income Bridge 2018 to 2019 Operating Income Bridge Operating Income Bridge by Segment ($ Millions) ($ Millions) 200 200 148 148 150 150 100 100 50 50 (105) - - 0 0 (162) (56) (50) (50) (37) 4 (100) (36) (83) (100) (70) (83) 2018 Price Volume / Sales Cost SG&A / Other 2019 2018
Slide 7: High Purity Cellulose
High Purity Cellulose HPC Operating Income Bridge $ Millions Quarter Ended Year Ended 150 Dec 31, Sep 28, Dec 31, Dec 31, Dec 31, 112 (49) 2019 2019 2018 2019 2018 Key Financials ($ millions) 100 Net Sales $304 $268 $317 $1,127 $1,192 (29) Operating Income (4) 7 29 7 112 50 (31) Adjusted EBITDA 27 4
Slide 8: Forest Products
Forest Products Forest Products Operating Income Bridge $ Millions Quarter Ended Year Ended 50 Dec 31, Sep 28, Dec 31, Dec 31, Dec 31, 25 (60) 2019 2019 2018 2019 2018 25 Key Financials ($ millions) 0 Net Sales $77 $65 $73 $299 $356 Operating Income (4) (5) (10) (31) 25 (25) 3 1 - Adjusted EBITDA (1
Slide 9: Paperboard
Paperboard Paperboard Operating Income Bridge $ Millions Quarter Ended Year Ended 10 Dec 31, Sep 28, Dec 31, Dec 31, Dec 31, 2019 2019 2018 2019 2018 5 4 5 2 - 4 Key Financials ($ millions) 3 Net Sales $49 $54 $48 $200 $197 Operating Income 3 2 (1) 4 4 0 Adjusted EBITDA 8 6 3 22 22 (5) 2018 Price Vo
Slide 10: Pulp & Newsprint
Pulp & Newsprint Pulp & Newsprint Operating Income Bridge $ Millions Quarter Ended Year Ended 100 Dec 31, Sep 28, Dec 31, Dec 31, Dec 31, 2019 2019 2018 2019 2018 75 72 (48) Key Financials ($ millions) Net Sales $54 $46 $60 $215 $282 50 Operating Income (2) (4) 16 2 72 (11) 25 (10) Adjusted EBITDA -
Slide 11: Leverage and Liquidity
Leverage and Liquidity New Covenant Ratio Summary: Net Secured Debt/EBITDA* 5.6x 5.4x 6.0x 5.0x 5.0x Senior secured net leverage of 4.1x* 4.5x 4.5x Liquidity of $151 million as of year end 2019, of 4.0x 3.0x 3.0x 3.0x 3.0x 3.0x 3.0x which $64 million is cash balance and $87 million is revolver c
Slide 12: 2020 Outlook
2020 Outlook Commodity markets expected to improve Focused on controlling cost and preserving cash as commodity prices recover Cellulose Specialties: Expect modest price increases offset by volume declines Commodities: Anticipate prices increasing from lows through 2020 High Purity Overall HPC
Slide 13: 2020 Financial Goals: Reduce Costs and Improve Free Cash Flow
2020 Financial Goals: Reduce Costs and Improve Free Cash Flow Focused on aggressively controlling costs and preserving cash to manage through the commodity cycle Remain compliant with financial covenants despite global market uncertainty Targeting $60-$70 million of benefits in 2020 to increase
Slide 14: Appendix
RAYONIER Advanced Materials. Appendix
Slide 15: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures EBITDA is defined as income from continuing operations before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is perfo
Slide 16: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Forest Pulp & High Purity Corporate Three Months Ended: Products Paperboard Newsprint Cellulose & Other Total December 31, 2019 Income (loss) from continuing operations $ (4) $ 4 $ (12) $ (7) $ (39) $ (58) Depreciation and amortization 3 4 1 34 — 42 I
Slide 17: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) Forest Pulp & High Purity Corporate Twelve Months Ended: Products Paperboard Newsprint Cellulose & Other Total December 31, 2019 Income (loss) from continuing operations $ (31) $ 6 $ (3) $ 4 $ (94) $ (118) Depreciation and amortization 9 16 4 123 1 15
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures ($ Millions) December 31, December 31, 2019 2018 Adjusted Net Debt Reconciliation Current maturities of long-term debt $ 19 $ 15 Long-term debt & finance lease obligation 1,063 1,173 Total debt $ 1,082 $ 1,188 Original issue discount, premiums and debt issuance co
Slide 19: Reconciliation of Reported to Adjusted Earnings
Reconciliation of Reported to Adjusted Earnings ($ Millions, except per share amounts) Three Months Ended Twelve Months Ended December 31, September 29, December 31, December 31, December 31, 2019 2019 2018 2019 2018 Adjusted Operating Income Per Per Per Per Per (Loss) and Income (Loss) from Diluted
Slide 20: Historical Financial Information by Segment
Historical Financial Information by Segment ($ Millions) Revenue Q1 Q2 Q3 Q4 2019 High Purity Cellulose 286 269 268 304 1,127 Forest Products 75 81 65 77 299 Pulp & Newsprint 51 65 46 54 215 Paperboard 47 50 54 49 200 Corporate (18) (15) (17) (17) (66) Total $ 441 $ 450 $ 416 $ 468 $ 1,775 Operating
Slide 21: Key Index Pricing
Key Index Pricing Q4’19 Q3’19 Q2’19 Q1’19 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 • $1,107 • $1,163 • $1,260 • $1,332 Commodity • Viscose Pulp delivered to C
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