RAYONIER ADVANCED MATERIALS INC. SEC 10-Q Report

Rayonier Advanced Materials Inc. (RYAM), a global leader in cellulose-based technologies, has released its Form 10-Q report for the second quarter of 2025. The report highlights significant financial and operational challenges faced by the company, including decreased sales volumes, operational disruptions, and unfavorable market conditions.

Financial Highlights

Net Sales: $340 million for the three months ended June 28, 2025, a decrease of 19% compared to the same period in 2024, driven by lower sales prices in Paperboard and High-Yield Pulp and lower sales volumes across all segments.

Gross Margin: $24 million for the three months ended June 28, 2025, representing a gross margin percentage of 7.1%, down from 11.5% in the same period in 2024, primarily due to decreased sales volumes and increased input costs.

Operating Income (Loss): $(1) million for the three months ended June 28, 2025, compared to $28 million in the same period in 2024, reflecting lower net sales, operational challenges, and unfavorable foreign exchange rates.

Net Income (Loss): $(363) million for the three months ended June 28, 2025, compared to $11 million in the same period in 2024, significantly impacted by a valuation allowance on Canadian deferred tax assets.

Basic and Diluted Earnings Per Common Share: $(5.44) for the three months ended June 28, 2025, compared to $0.17 in the same period in 2024, reflecting the substantial net loss incurred during the period.

Business Highlights

Revenue Segments

• Cellulose Specialties: Experienced a decrease in net sales by 14% for the quarter and 8% for the six months ended June 28, 2025, primarily due to a 15% and 9% decrease in sales volumes, respectively. This was attributed to a pause in customer orders due to tariff uncertainties and a labor strike at the Tartas cellulose plant.
• Biomaterials: Saw a decrease in net sales by 25% for the quarter and 7% for the six months ended June 28, 2025, driven by lower production due to operational challenges and the impact of the labor strike at the Tartas cellulose plant.
• Cellulose Commodities: Reported a 31% decrease in net sales for the quarter and a 26% decrease for the six months ended June 28, 2025, primarily due to a significant drop in sales volumes, partially offset by increased sales prices driven by market supply dynamics for fluff.

Sales Units

• Cellulose Specialties: Sales volumes decreased to 111 thousand metric tons for the quarter and 221 thousand metric tons for the six months ended June 28, 2025, reflecting a decline due to tariff impacts and operational disruptions.
• Cellulose Commodities: Sales volumes fell to 64 thousand metric tons for the quarter and 149 thousand metric tons for the six months ended June 28, 2025, due to lower non-fluff commodity sales and the labor strike at the Tartas cellulose plant.

New Production Launches

• Biomaterials: Re-started its lignosulfonate powder plant in France in the first quarter of 2025, contributing to the segment's operational capabilities.

Future Outlook

• The company anticipates a mid single-digit percentage increase in average cellulose specialties sales prices for 2025, despite a high single-digit percentage decline in sales volumes due to tariff impacts and the absence of 2024 bridge volumes.
• RYAM is focusing on investments in new green energy and renewable products, with a goal of generating over $70 million of EBITDA from its Biomaterials business. This includes operational bioethanol facilities in France and potential new projects in the U.S.
• The company plans to explore the sale of its Paperboard and High-Yield Pulp businesses, although this process is currently on hold due to market conditions and trade-related uncertainty.
• RYAM expects to grow EBITDA over the two years following 2025 by increasing Cellulose Specialties sales volume, expanding margins, and accelerating investments in Biomaterials.

SEC Filing: RAYONIER ADVANCED MATERIALS INC. [ RYAM ] - 10-Q - Aug. 06, 2025