Rayonier Advanced Materials Inc.

Second quarter net sales were $376 million, up 18% sequentially and 11% year over year. Loss from continuing operations improved to $33 million from $81 million in Q1 and included a $13 million noncash asset impairment charge related to high-yield pulp. Adjusted EBITDA increased to $40 million from $8 million in Q1 and $28 million in the prior-year quarter. High Purity Cellulose adjusted EBITDA was $57 million, up $12 million year over year, with margin at 19% versus 17% in the prior-year quarter. Paperboard and high-yield pulp adjusted EBITDA was negative $10 million versus negative $2 million a year ago. Liquidity was $145 million, including $57 million of cash, $76 million of North American ABL availability, and $12 million under the France factoring facility. Adjusted net debt was $755 million, net secured debt was $726 million, and net secured leverage was 4.2x covenant EBITDA versus a 4.75x covenant test. Year-to-date cash provided by operating activities was $37 million, and adjusted free cash flow was negative $8 million, improving $57 million from negative $65 million in the prior-year period. Year-to-date CapEx was $45 million, including $9 million for strategic projects. Management said full-year 2026 free cash flow remains expected to be positive, with second-half improvement driven by higher CS volumes, sustained pricing, better commodity performance, working capital discipline, and tighter control of discretionary spending. The company also expects fourth-quarter completion of the strategic review and said it is working toward stronger 2027 earnings and greater refinancing flexibility.

Dan Krawczyk framed the call around a strategic review that remains the top priority and said it is progressing with urgency and discipline, with a fourth-quarter conclusion expected. He emphasized that RYAM has a differentiated Cellulose Specialties franchise, meaningful customer relationships, and a set of operational levers—reliability, productivity, energy efficiency, automation, and product-mix optimization—that can improve earnings and cash generation. He also highlighted nitrocellulose and biomaterials as areas of strategic relevance and value creation, while stressing that running the business well and completing the review are complementary rather than competing goals.

Marcus Moeltner focused on the quarter’s financial inflection: adjusted EBITDA of $40 million, liquidity of $145 million, and covenant leverage of 4.2x versus a 4.75x test. He pointed to HPC momentum as the main earnings driver, with pricing up 21% year over year and volumes up 19% sequentially, and said back-half HPC volumes should improve by roughly 10% to 15%. He also noted $37 million of year-to-date operating cash flow, negative $8 million of adjusted free cash flow, and $45 million of year-to-date CapEx, while reiterating that the company is focused on preserving liquidity, managing CapEx, and improving cash generation to support refinancing options later on.

Analysts focused on the strategic review, second-half CS volume trends, tariff impacts, and refinancing. Dan said his hiring was aimed at maximizing shareholder value by supporting the strategic review and strengthening operations, while Marcus said the path to positive free cash flow depends on HPC, commodity pricing, paperboard/HY pulp execution, working capital, and disciplined G&A spending. On tariffs, management said the USTR’s Section 301 actions on Brazil and Norway could improve competitiveness for U.S. suppliers if they hold, but the outcome depends on downstream trade programs and other regulatory mechanisms; they also said paperboard tariffs could materially affect that business, with roughly 75% of paperboard volume sold into the U.S. On refinancing, management said the goal is to rebuild LTM EBITDA and financial flexibility so the company can access both public and private markets, but timing depends on operating performance, capital markets, and the strategic review outcome.