RYAM Reports First Quarter 2026 Results
-
Net Sales for the quarter of$319 million , down$34 million from prior year quarter -
Net Loss for the quarter of
$81 million , a decline of$49 million from prior year quarter, inclusive of non-cash permanent idling charges of$41 million -
Adjusted EBITDA for the quarter of
$8 million , down$9 million from prior year quarter -
Cash Provided by Operating Activities of
$32 million ; Adjusted Free Cash Flow generation of$12 million -
Total Debt of
$763 million and Net Secured Debt of$705 million with a covenant net secured leverage ratio of 4.3 times
“Our first quarter performance was consistent with the trajectory we outlined in March, with early progress on pricing and mix in Cellulose Specialties and positive adjusted free cash flow despite a low earnings base,” said
Moeltner added, “As previously announced, we are conducting a review of a range of strategic and financial alternatives to maximize shareholder value, including continued execution of our standalone plan. In light of recent unsolicited indications of interest and the Board’s responsibility to evaluate the full range of value-maximizing options available to the Company, we believe this is the appropriate time to undertake that review. While that process is underway, our focus remains on executing our operating plan, strengthening earnings and cash flow, and advancing our Cellulose Specialties leadership initiative.
“2026 remains a transition year that depends on sequential improvement, and we have a defined path to build earnings momentum over the balance of the year. Our priorities remain unchanged, and we continue to expect full-year EBITDA above 2025 levels and positive free cash flow in 2026. By continuing to execute our strategic leadership initiatives, we are laying the foundation for stronger performance in 2027 and beyond.”
First Quarter 2026 Financial Results
The Company reported a net loss of
Beginning in
-
High Purity Cellulose: formerly the segments of Cellulose Specialties,
Cellulose Commodities and Biomaterials - Paperboard & High Yield Pulp: formerly the segments of Paperboard and High Yield Pulp
Prior period segment results have been recast to align with this new segment reporting structure.
Net sales were comprised of the following for the periods presented:
|
Three Months Ended |
|||||||
(in millions) |
|
|
|
|
|
|||
High Purity Cellulose |
$ |
263 |
|
$ |
345 |
|
$ |
279 |
Paperboard & High Yield Pulp |
|
56 |
|
|
67 |
|
|
74 |
Net sales |
$ |
319 |
|
$ |
412 |
|
$ |
353 |
Operating income (loss) was comprised of the following for the periods presented:
|
Three Months Ended |
||||||||||
(in millions) |
|
|
|
|
|
||||||
High Purity Cellulose |
$ |
(43 |
) |
|
$ |
33 |
|
|
$ |
20 |
|
Paperboard & High Yield Pulp |
|
(10 |
) |
|
|
(7 |
) |
|
|
(9 |
) |
Corporate & Other |
|
(12 |
) |
|
|
(15 |
) |
|
|
(26 |
) |
Operating income (loss) |
$ |
(65 |
) |
|
$ |
11 |
|
|
$ |
(15 |
) |
High Purity Cellulose
In
Net sales for the quarter decreased
-
Cellulose sales volume increase of 5%, driven by mix that included a 58% increase in cellulose commodities (CC) sales volume that was partially offset by a 35% decrease in cellulose specialties (CS) sales volume.
- CC sales volume increased as the Company executed its CS leadership initiatives and shifted production toward commodity products.
-
CS sales volume declined as the Company executed its CS leadership initiatives, with the decline further impacted by elevated inventory levels in the acetate market and softer demand in the ethers market.
-
Cellulose average sales price decrease of 11%, including an 11% decrease in CC average sales price that was partially offset by a 17% increase in CS average sales price.
- CS average sales price increase was driven by improved pricing of newly negotiated contracts. The Company remains on track to securing value-based pricing for its 2026 CS portfolio.
- CC average sales price decline was due to softer global commodity pricing.
-
Partially offsetting the decreases above was an increase in biomaterials and other net sales from
$11 million to$13 million , primarily driven by 2G bioethanol fuel and lignosulfonates.
Operating Income (Loss)
Operating results for the quarter declined
-
Non-cash permanent idling charges of
$41 million in the current quarter as a result of the decision to permanently cease dissolving wood pulp production at the Temiscaming HPC plant. - Decrease in net sales discussed above, primarily the decrease in variable margin resulting from the lower CS sales volumes.
- Higher labor and maintenance costs.
These decreases were partially offset by:
- Lower wood costs.
-
Insurance recovery of
$4 million related to the 2024 Jesup plant fire. -
Lower energy costs, driven by a
$3 million higher benefit from sales of excess emission allowances in the current quarter compared to the prior year quarter.
Paperboard & High Yield Pulp
Net sales for the quarter decreased
- Total sales volume decrease of 26%, due to 5% and 42% decreases for paperboard (PBD) and high yield pulp (HYP), respectively.
- Total average sales price increase of 2%, despite 10% and 3% decreases for PBD and HYP, respectively, due to a higher mix of PBD sales.
These decreases were driven by:
-
Increased competitive activity in PBD due to the startup of new
U.S. capacity in mid-year 2025. -
Continued oversupply of domestic HYP in
Asia . - Weaker demand for paper and packaging materials due to global economic uncertainty.
Partially offsetting these decreases were higher sales of folding packaging PBD grades due to increased focus on this market segment.
Operating Loss
Operating loss for the quarter increased
- Decrease in net sales discussed above.
-
Increase in logistics costs due to higher ocean freight rates for shipments to
Asia as a result of the current geopolitical environment. - Impact of market downtime taken in the current quarter.
Partially offsetting these decreases were:
- Lower energy costs due to higher offsetting electricity production and sales.
- Lower purchased pulp costs.
Corporate & Other
Operating loss for the quarter improved
-
Lower environmental remediation expense driven by the
$12 million charge incurred in the prior year quarter. - Favorable foreign exchange rates in the current quarter compared to unfavorable rates in the prior year quarter.
Liquidity
The Company ended the first quarter with
As of
Conference Call Information
RYAM will host a conference call and live webcast at
Investors may listen to the conference call by dialing 800-715-9871 (
About RYAM
RYAM is a global leader of high purity cellulose commonly used in the production of filters, food, pharmaceuticals, high performance plastics, propellants and various other industrial applications. RYAM’s specialized assets, capable of creating the world’s leading cellulose specialties products, are also used to produce cellulose viscose pulp, cellulose fluff pulp, paperboard, high yield pulp and various value-added co-products, including biofuels, bioelectricity and lignin. With manufacturing operations in the
Forward-Looking Statements
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 future events, developments or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “target,” “believe,” “intend,” “plan,” “forecast,” “anticipate,” “guidance” and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. Forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that these expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to various risks and uncertainties. All statements made in this earnings release are made only as of the date set forth at the beginning of this release. The Company undertakes no obligation to update the information made in this release in the event facts or circumstances change after the date of this release. The Company has not filed its Form 10-Q for the quarter ended
The Company’s operations are subject to a number of risks, including, but not limited to, those listed below. When considering an investment in the Company’s securities, you should carefully read and consider these risks, together with all other information in the Company’s Annual Report on Form 10-K and other filings and submissions to the
Other important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements that may have been made in this document are described or will be described in the Company’s filings with the U.S. Securities and Exchange Commission, including the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company assumes no obligation to update these statements except as is required by law.
Non-GAAP Financial Measures
This earnings release and the accompanying schedules contain certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted Net Debt and Net Secured Debt. The Company believes these non-GAAP financial measures provide useful information to its Board of Directors, management and investors regarding its financial condition and results of operations. Management uses these non-GAAP financial measures to compare its performance to that of prior periods for trend analyses, to determine management incentive compensation and for budgeting, forecasting and planning purposes.
The Company does not consider these non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in the consolidated financial statements. In addition, they reflect the exercise of management’s judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures are provided below. Non-GAAP financial measures are not necessarily indicative of results that may be generated in future periods and should not be relied upon, in whole or part, in evaluating the financial condition, results of operations or future prospects of the Company.
Condensed Consolidated Statements of Operations
(Unaudited)
(in millions, except share and per share information)
|
Three Months Ended |
||||||||||
|
|
|
|
|
|
||||||
Net sales |
$ |
319 |
|
|
$ |
412 |
|
|
$ |
353 |
|
Cost of sales |
|
(327 |
) |
|
|
(375 |
) |
|
|
(329 |
) |
Gross margin |
|
(8 |
) |
|
|
37 |
|
|
|
24 |
|
Selling, general and administrative expense |
|
(19 |
) |
|
|
(19 |
) |
|
|
(23 |
) |
Foreign exchange gain (loss) |
|
1 |
|
|
|
(1 |
) |
|
|
(1 |
) |
Temiscaming HPC permanent idling charges |
|
(41 |
) |
|
|
— |
|
|
|
— |
|
Other operating income (expense), net |
|
2 |
|
|
|
(6 |
) |
|
|
(15 |
) |
Operating income (loss) |
|
(65 |
) |
|
|
11 |
|
|
|
(15 |
) |
Interest expense |
|
(23 |
) |
|
|
(26 |
) |
|
|
(24 |
) |
Other income (expense), net |
|
— |
|
|
|
(2 |
) |
|
|
2 |
|
Loss before income tax |
|
(88 |
) |
|
|
(17 |
) |
|
|
(37 |
) |
Income tax benefit |
|
7 |
|
|
|
— |
|
|
|
5 |
|
Equity in loss of equity method investment |
|
— |
|
|
|
(4 |
) |
|
|
— |
|
Net loss |
|
(81 |
) |
|
|
(21 |
) |
|
|
(32 |
) |
Net income attributable to redeemable noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss attributable to RYAM |
$ |
(81 |
) |
|
$ |
(21 |
) |
|
$ |
(32 |
) |
|
|
|
|
|
|
||||||
Net loss per common share - Basic and Diluted |
$ |
(1.22 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.49 |
) |
Weighted average shares used in determining EPS - Basic and Diluted |
|
67,133,754 |
|
|
|
67,005,593 |
|
|
|
66,216,983 |
|
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)
|
|
|
|
||
Assets |
|
|
|
||
Cash and cash equivalents |
$ |
68 |
|
$ |
75 |
Other current assets |
|
461 |
|
|
493 |
Property, plant and equipment, net |
|
965 |
|
|
1,015 |
Other assets |
|
173 |
|
|
175 |
Total assets |
$ |
1,667 |
|
$ |
1,758 |
|
|
|
|
||
Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity |
|
|
|
||
Debt due within one year |
$ |
28 |
|
$ |
21 |
Other current liabilities |
|
357 |
|
|
339 |
Long-term debt |
|
735 |
|
|
758 |
Non-current environmental liabilities |
|
173 |
|
|
173 |
Other liabilities |
|
133 |
|
|
139 |
Redeemable noncontrolling interest |
|
12 |
|
|
11 |
Stockholders’ equity |
|
229 |
|
|
317 |
Total liabilities, redeemable noncontrolling interest and stockholders’ equity |
$ |
1,667 |
|
$ |
1,758 |
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in millions)
|
Three Months Ended |
||||||
|
|
|
|
||||
Operating Activities |
|
|
|
||||
Net loss |
$ |
(81 |
) |
|
$ |
(32 |
) |
Adjustments to reconcile net loss to cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
33 |
|
|
|
31 |
|
Temiscaming HPC permanent idling charges - accelerated depreciation |
|
35 |
|
|
|
— |
|
Temiscaming HPC permanent idling charges - other asset adjustments |
|
6 |
|
|
|
— |
|
Changes in working capital and other assets and liabilities |
|
47 |
|
|
|
31 |
|
Other |
|
(8 |
) |
|
|
10 |
|
Cash provided by operating activities |
|
32 |
|
|
|
40 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Capital expenditures, net of proceeds from sale of property, plant and equipment |
|
(22 |
) |
|
|
(38 |
) |
Insurance recoveries on property damage |
|
2 |
|
|
|
— |
|
Cash used in investing activities |
|
(20 |
) |
|
|
(38 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Changes in debt principal balance |
|
(16 |
) |
|
|
2 |
|
Other |
|
(2 |
) |
|
|
(3 |
) |
Cash used in financing activities |
|
(18 |
) |
|
|
(1 |
) |
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents |
|
(6 |
) |
|
|
1 |
|
Net effect of foreign exchange on cash and cash equivalents |
|
(1 |
) |
|
|
4 |
|
Balance, beginning of period |
|
75 |
|
|
|
125 |
|
Balance, end of period |
$ |
68 |
|
|
$ |
130 |
|
Average Sales Price and Sales Volumes
(Unaudited)
|
Three Months Ended |
|||||||
|
|
|
|
|
|
|||
Average Sales Price ($ per metric ton) |
|
|
|
|
|
|||
Total Cellulose |
$ |
1,219 |
|
$ |
1,379 |
|
$ |
1,371 |
Cellulose Specialties |
$ |
2,040 |
|
$ |
1,875 |
|
$ |
1,750 |
|
$ |
770 |
|
$ |
806 |
|
$ |
863 |
Paperboard & High Yield Pulp |
$ |
884 |
|
$ |
825 |
|
$ |
870 |
Paperboard |
$ |
1,194 |
|
$ |
1,272 |
|
$ |
1,321 |
High Yield Pulp (external sales) |
$ |
504 |
|
$ |
487 |
|
$ |
518 |
|
|
|
|
|
|
|||
Sales Volume (‘000s of metric tons) |
|
|
|
|
|
|||
Total Cellulose |
|
205 |
|
|
239 |
|
|
195 |
Cellulose Specialties |
|
72 |
|
|
128 |
|
|
111 |
|
|
133 |
|
|
111 |
|
|
84 |
Paperboard & High Yield Pulp |
|
63 |
|
|
81 |
|
|
85 |
Paperboard |
|
35 |
|
|
35 |
|
|
37 |
High Yield Pulp (external sales) |
|
28 |
|
|
46 |
|
|
48 |
Reconciliation of Non-GAAP Measures
(Unaudited)
(in millions)
EBITDA and Adjusted EBITDA by Segment(a)
|
Three Months Ended |
||||||||||||||
|
High Purity Cellulose |
|
Paperboard & High Yield Pulp |
|
Corporate & Other |
|
Total |
||||||||
Net loss |
$ |
(45 |
) |
|
$ |
(9 |
) |
|
$ |
(27 |
) |
|
$ |
(81 |
) |
Net income attributable to redeemable noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss attributable to RYAM |
|
(45 |
) |
|
|
(9 |
) |
|
|
(27 |
) |
|
|
(81 |
) |
Depreciation and amortization |
|
28 |
|
|
|
4 |
|
|
|
1 |
|
|
|
33 |
|
Temiscaming HPC permanent idling - accelerated depreciation |
|
35 |
|
|
|
— |
|
|
|
— |
|
|
|
35 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
22 |
|
|
|
22 |
|
Income tax benefit |
|
— |
|
|
— |
|
|
|
(7 |
) |
|
|
(7 |
) |
|
EBITDA attributable to RYAM |
|
18 |
|
|
|
(5 |
) |
|
|
(11 |
) |
|
|
2 |
|
Temiscaming HPC permanent idling - other asset adjustments |
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
6 |
|
Adjusted EBITDA attributable to RYAM |
$ |
24 |
|
|
$ |
(5 |
) |
|
$ |
(11 |
) |
|
$ |
8 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
||||||||||||||
|
High Purity Cellulose |
|
Paperboard & High Yield Pulp |
|
Corporate & Other |
|
Total |
||||||||
Net income (loss) |
$ |
30 |
|
|
$ |
(6 |
) |
|
$ |
(45 |
) |
|
$ |
(21 |
) |
Net income attributable to redeemable noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income (loss) attributable to RYAM |
|
30 |
|
|
|
(6 |
) |
|
|
(45 |
) |
|
|
(21 |
) |
Depreciation and amortization |
|
32 |
|
|
|
5 |
|
|
|
1 |
|
|
|
38 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
26 |
|
|
|
26 |
|
Income tax expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
EBITDA attributable to RYAM |
|
62 |
|
|
|
(1 |
) |
|
|
(18 |
) |
|
|
43 |
|
Pension settlement loss |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
Indefinite suspension charges |
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
Adjusted EBITDA attributable to RYAM |
$ |
63 |
|
|
$ |
(1 |
) |
|
$ |
(16 |
) |
|
$ |
46 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended |
||||||||||||||
|
High Purity Cellulose |
|
Paperboard & High Yield Pulp |
|
Corporate & Other |
|
Total |
||||||||
Net income (loss) |
$ |
20 |
|
|
$ |
(8 |
) |
|
$ |
(44 |
) |
|
$ |
(32 |
) |
Net income attributable to redeemable noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net income (loss) attributable to RYAM |
|
20 |
|
|
|
(8 |
) |
|
|
(44 |
) |
|
|
(32 |
) |
Depreciation and amortization |
|
26 |
|
|
|
6 |
|
|
|
(1 |
) |
|
|
31 |
|
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
23 |
|
|
|
23 |
|
Income tax benefit |
|
— |
|
|
|
— |
|
|
|
(5 |
) |
|
|
(5 |
) |
EBITDA and Adjusted EBITDA attributable to RYAM |
$ |
46 |
|
|
$ |
(2 |
) |
|
$ |
(27 |
) |
|
$ |
17 |
|
(a) |
EBITDA is defined as net income (loss) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for items that management believes are not representative of core operations. EBITDA and Adjusted EBITDA are non-GAAP measures used by management, existing stockholders and potential stockholders to measure how the Company is performing relative to the assets under management. |
Adjusted Free Cash Flow(a)
|
Three Months Ended |
||||||
|
|
|
|
||||
Cash provided by operating activities |
$ |
32 |
|
|
$ |
40 |
|
Capital expenditures, net |
|
(20 |
) |
|
|
(38 |
) |
Adjusted Free Cash Flow |
$ |
12 |
|
|
$ |
2 |
|
(a) |
Beginning in the fourth quarter of 2025, Adjusted Free Cash Flow is defined as cash provided by (used in) operating activities adjusted for capital expenditures, net of proceeds from the sale of property, plant and equipment and insurance claims. Adjusted Free Cash Flow for the quarter ended |
Adjusted Net Debt and Net Secured Debt(a)
|
|
|
|
||||
Debt due within one year |
$ |
28 |
|
|
$ |
21 |
|
Long-term debt |
|
735 |
|
|
|
758 |
|
Total debt |
|
763 |
|
|
|
779 |
|
Unamortized premium, discount and issuance costs |
|
39 |
|
|
|
41 |
|
Cash and cash equivalents |
|
(68 |
) |
|
|
(75 |
) |
Adjusted Net Debt |
|
734 |
|
|
|
745 |
|
Unsecured debt |
|
(29 |
) |
|
|
(30 |
) |
Net Secured Debt |
$ |
705 |
|
|
$ |
715 |
|
(a) |
Adjusted Net Debt is defined as the amount of debt after the consideration of debt premium, discount and issuance costs, less cash. Net Secured Debt is defined as Adjusted Net Debt less unsecured debt. |
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