Rayonier Advanced Materials Reports Mixed Q3 Results, Net Loss Despite Revenue Growth

Rayonier Advanced Materials Inc. (RYAM) reported its financial results for the third quarter and the first nine months of fiscal 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For the three months ended September 28, 2024, RYAM achieved net sales of $401.1 million, a 9% increase from $368.7 million in the same period of 2023. This growth was driven by higher sales prices in the High Purity Cellulose and High-Yield Pulp segments, alongside increased sales volumes in cellulose specialties. However, the company reported a net loss of $32.6 million, compared to a loss of $25.1 million in the prior year. The gross margin improved significantly to $43.6 million (11.0% margin) from $8.7 million (2.4% margin) in Q3 2023.

For the nine months ended September 28, 2024, net sales totaled $1.2 billion, a slight decline of 1% from $1.2 billion in the same period of 2023. The net loss for this period was $22.8 million, a notable improvement from a loss of $40.2 million in the prior year. The gross margin for the nine months increased to $128.6 million (10.7% margin) from $60.8 million (5.0% margin) in the previous year.

Operating income for the third quarter was a loss of $16.8 million, worsening from a loss of $14.4 million in Q3 2023. However, for the nine-month period, RYAM reported an operating income of $28.5 million, a significant turnaround from an operating loss of $4.3 million in the same period last year. The High Purity Cellulose segment continued to face challenges, reporting an operating loss of $5.7 million for the quarter, unchanged from the prior year, while the nine-month loss increased to $45 million from $7 million.

Strategically, RYAM has made significant moves, including a $700 million secured term loan financing in October 2024, aimed at redeeming existing debt. The company also announced a price increase of up to 10% for cellulose specialties products in September 2024, driven by market dynamics and cost inflation. Additionally, RYAM is involved in a joint venture for green energy production and has suspended operations at its Temiscaming High Purity Cellulose plant, incurring a $25 million non-cash asset impairment.

As of September 28, 2024, RYAM's cash and cash equivalents stood at $136.1 million, up from $75.8 million at the end of 2023. Total debt decreased slightly to $773.3 million from $777.5 million. The company remains in compliance with all financial covenants under its debt agreements.