RYAM Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $353 million, down $48 million year-over-year.

Operating Income: $9 million, an improvement of $26 million compared to the prior year.

Adjusted EBITDA: $42 million, a decrease of $9 million from Q3 2024.

Adjusted Free Cash Flow: Year-to-date negative $83 million, with expectations for improvement in Q4.

Liquidity: Total liquidity of $140 million, including $77 million in cash; net secured leverage ratio at 4.1x.

2Strategic Updates and Business Highlights

Adjusted EBITDA Guidance: Revised to $135 million to $140 million for the full year, down from $150 million to $160 million due to proactive downtime in non-core segments.

Operational Challenges: Stabilization in operations at Tartas despite ongoing French national strikes; staffing issues largely resolved.

Temiscaming Site: Focus on restoring profitability through cost reductions, operational efficiency improvements, and new product developments.

Biomaterials Projects: Significant progress on multiple initiatives, including the AGE renewable power project and BioNova bioethanol project, with expected high returns on investment.

3Forward Guidance and Outlook

2026 Pricing Strategy: Targeting a significant pricing reset for Cellulose Specialties to recapture lost value from inflation; aiming for a $30 million EBITDA growth from margin improvements.

Cost Reduction Initiatives: $30 million in structural cost reductions targeted for 2026, with additional $20 million in EBITDA improvements planned for 2027.

Long-term EBITDA Goal: Aiming for over $300 million in EBITDA by the end of 2027.

4Bad News, Challenges, or Points of Concern

Declining Metrics: Significant declines in Paperboard and High-Yield Pulp segments due to lower sales volumes and pricing pressures from increased competition and tariff uncertainties.

Operational Losses: Expected EBITDA loss of about $14 million in the Paperboard and high-yield pulp business, contrasting with historical profitability.

Tariff Impacts: Ongoing challenges with a 10% tariff on fluff products exported to China, impacting competitiveness and pricing strategies.

5Notable Q&A Insights

Future Sales Viability: CEO De Lyle Bloomquist emphasized the need for positive EBITDA and cash flow before considering the sale of Paperboard and High-Yield Pulp assets, contingent on successful new product commercialization and USMCA negotiations.

Refinancing Plans: CFO Marcus Moeltner discussed the potential for refinancing in 2026 to lower interest expenses, contingent on demonstrating a return to historical EBITDA levels.

Pricing Recovery: Bloomquist noted a potential $300 million in lost value due to inflation since 2014, indicating a strong need for pricing increases to sustain operations and reinvest in facilities.

Operational Timing Issues: Delays in shipments to India were identified as a temporary issue, expected to be resolved in Q4, allowing for catch-up in sales volumes. Overall, RYAM is navigating a challenging year with strategic initiatives aimed at stabilizing operations, improving cash flow, and positioning for future growth despite current headwinds in specific segments.