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Rayonier Advanced Materials Inc(RYAM-N)

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Rayonier Advanced Materials (NYSE: RYAM) Reports Q3 2022 Financial Results Showing 25% Y/Y Revenue Growth and Net Income of $30 Million

Spotlight Growth - Wed Nov 2, 2022

Rayonier Advanced Materials, Inc. (NYSE: RYAM) is engaged as a global manufacturer of cellulose-based technologies, as well as paper and packaging products. Shares of the industrial technology company are soaring 42% through early trading on Wednesday, November 2, 2022. Over the past three months, Rayonier Advanced Materials has seen average daily volume of 312,820 shares. However, volume of 1.26 million shares or dollar volume of around $8.01 million, has already exchanged hands through early trading.

Shares of Rayonier Advanced Materials are surging after the company reported third quarter 2022 financial results. Net sales for the quarter came in at $466 million, which was up 25% year-over-year. Income from continuing operations for the quarter totaled $18 million. Adjusted EBITDA surged 106% y/y to $68 million and net income was $30 million or $0.45 per diluted share.

Rayonier Advanced Materials operates three major business segments: high purity cellulose, paperboard, and high-yield pulp. High purity cellulose is the cash cow for the company, as it generated $369 million of net revenue during the quarter. This compares to the high purity cellulose revenue results from Q2 2022, which came in at $302 million. Paperboard and high-yield pulp generated net revenues of $66 million and $40 million, respectively, during Q3.

On a forward-looking basis, management increased the company’s adjusted EBITDA guidance for the rest of 2022 to exceed $175 million. Furthermore, Rayonier Advanced Materials is on track to reduce its debt level to $725 million by the end of the year. The company’s net leverage ratio came in at 5.1 as of the end of Q3 2022. Management believes they are well on rack to reduce the net leverage ratio even further to 4.0.

“The quarter’s improved financial results are evidence of the significant earnings power of RYAM. Increased productivity in the third quarter led to higher sales volumes in High Purity Cellulose and stronger financial results,” said De Lyle W. Bloomquist, President and Chief Executive Officer. “Though the global economy appears to be slowing, we remain optimistic about capturing additional productivity gains and value for our key products. As such, we are confident about our business and have increased our full year Adjusted EBITDA guidance to exceed $175 million for 2022. We also continue to reduce debt, including net repayments of $59 million year to date. As our credit metrics continue to improve, we are actively monitoring debt markets for an opportune time to refinance our 2024 debt maturities.”

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