RYAM — Rayonier Advanced Materials Inc.

Summary of RYAM Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Sales: $376 million, up 18% sequentially and 11% year-over-year.
• Loss from Continuing Operations: Improved to $33 million from $81 million in Q1 2026, including a $13 million noncash asset impairment charge.
• Adjusted EBITDA: Increased to $40 million from $8 million in Q1 and $28 million in Q2 2025.
• High Purity Cellulose (HPC) Performance: Adjusted EBITDA rose to $57 million, with margins expanding to 19%.
• Liquidity: Total liquidity at $145 million, with $57 million in cash and $76 million available under the ABL facility.
• Net Debt: Adjusted net debt at $755 million, with a net secured leverage ratio of 4.2x.

2. Strategic Updates and Business Highlights

• Leadership Transition: Dan Krawczyk, newly appointed CEO, emphasized a commitment to a comprehensive strategic review aimed at maximizing shareholder value.
• Strategic Review: Ongoing evaluation of strategic and financial alternatives, expected to conclude in Q4 2026.
• Operational Improvements: Focus on enhancing manufacturing performance through reliability, productivity, and cost initiatives.
• Cellulose Specialties: Strong market position with a focus on customer collaboration and innovation in high-purity cellulose products.
• Biomaterials Opportunities: Selective advancement in biomaterials projects, including a capital-light interest in the Altamaha Green Energy project.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipated positive free cash flow for the year, with a focus on improving operational performance and cash generation.
• HPC Volumes: Expected 10% to 15% improvement in volumes for the second half of 2026.
• Pricing Outlook: Continued strong pricing for cellulose specialties, with expectations for stability and improvement in commodity pricing.
• Market Conditions: Anticipated tighter market conditions in paperboard, supporting a firmer pricing outlook.

4. Challenges and Points of Concern

• Losses in Paperboard and High-Yield Pulp: Continued negative EBITDA in this segment, with challenges in pricing and market conditions.
• Tariffs and Trade Dynamics: New U.S. tariffs on Brazilian and Norwegian imports could impact competitiveness and pricing strategies.
• Elevated Leverage: High net debt levels remain a concern, with the need for improved cash flow to facilitate refinancing before 2029 maturities.
• Market Volatility: Ongoing evaluation of customer relationships and potential churn as pricing strategies evolve.

5. Notable Q&A Insights

• CEO Confidence: Dan Krawczyk expressed confidence in unlocking shareholder value through operational improvements and strategic initiatives.
• Customer Relationships: Emphasis on maintaining long-term partnerships despite pricing pressures, with a focus on stability and service.
• Nitrocellulose Market: Highlighted as a critical area for growth, particularly in defense applications, with ongoing efforts to qualify additional grades.
• Operational Execution: Acknowledgment that successful commercialization of new products is essential for improving profitability in the paperboard segment.

Overall, RYAM's Q2 2026 results reflect significant improvements in financial performance, strategic focus on operational enhancements, and a commitment to maximizing shareholder value amid ongoing challenges in certain market segments.