Rayonier Advanced Q4 Earnings Beat Estimates, Margins Improve Y/Y

Rayonier Advanced Materials RYAM reported a loss of 10 cents per share in fourth-quarter 2024, which beat the Zacks Consensus of a loss of 12 cents per share. RYAM had reported an adjusted loss of 22 cents per share in the year-ago quarter.

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Including one-time items, Rayonier Advanced reported a loss of 25 cents from continuing operations compared with a loss of 94 cents per share in the fourth quarter of 2023.

Rayonier Advanced Materials Inc. Price, Consensus and EPS Surprise

Rayonier Advanced Materials Inc. price-consensus-eps-surprise-chart | Rayonier Advanced Materials Inc. Quote

RYAM’s Margins Expand in Q4 Despite Flat Sales Y/Y

The company reported net sales of $422 million in the quarter, flat year over year. The top line missed the Zacks Consensus Estimate of $436 million.

The cost of sales dipped 2.5% from the year-ago period to $385 million. The gross profit increased 37% year over year to $37 million. The gross margin was 8.8%, a 240-basis-point expansion year over year.

Selling, general and administrative expenses soared 53% year over year to $26 million. RYAM reported an operating income of $11 million against an operating loss of $61 million in the fourth quarter of 2023.

The adjusted EBITDA was $51 million, a 38% increase year over year. The adjusted EBITDA margin was 12.1%, higher than 8.8% in the year-ago quarter.

Rayonier Advanced’s Segment Performances in Q4

The company operates in three operating segments: High Purity Cellulose, Paperboard and High-Yield Pulp.

The High Purity Cellulose segment’s sales were $338 million, down 3% year over year. Included in the fourth quarter of 2024 and 2023 were $17 million and $25 million, respectively, in other sales from bio-based energy and lignosulfonates, which were down due to the indefinite suspension of the Temiscaming HPC operations in the third quarter of 2025.

Prices increased 6% in the quarter due to a higher mix of cellulose specialties. Meanwhile, sales volumes were down 6% as a 10% increase in cellulose specialties volumes was offset by a 21% drop in commodity volumes. The segment’s adjusted EBITDA was up 38% year over year to $62 million.

Sales for the Paperboard segment were $60 million, a 9% increase from the year-ago period. Sales volumes increased 13%, benefiting from the easing of customer destocking. Prices were down 3%, due to mix and increased competitive activity from European imports. The segment’s adjusted EBITDA declined 17% to $10 million from the year-ago quarter’s $12 million.

The High-Yield Pulp segment’s sales were $32 million, up 28% year over year. The improvement in results was attributed to a 4% rise in price and 22.5% increase in volumes, driven by the timing of shipments and customer mix. The segment’s adjusted EBITDA was a negative $8 million compared with a negative $5 million in the year-ago quarter.

RYAM’s Cash Position

Rayonier Advanced had cash and cash equivalents of $125 million at the end of 2024 compared with $76 million at the end of 2023. Net cash provided by operating activities was $203 million in 2024 compared with $136 million in the prior year. Adjusted free cash flow was $128 million compared with $53 million in 2023.

RYAM ended 2024 with $276 million of liquidity, including $125 million of cash, $141 million of borrowing capacity under the ABL Credit Facility and $10 million of availability under the France factoring facility.

Rayonier Advanced’s Performance in 2024

RYAM reported an adjusted loss of five cents per share in 2024, which beat the Zacks Consensus Estimate of a loss of eight cents per share. The company reported an adjusted loss of 81 cents per share in 2023. Loss from continuing operations in 2024 was 64 cents per share compared with a loss of $1.57 per share in 2023.

The company’s net sales dipped 0.8% year over year to $1.63 billion in 2024. The top line lagged the Zacks Consensus Estimate of $1.64 billion.

RYAM’s Guidance for 2025

Following the indefinite suspension of Temiscaming HPC operations, RYAM continues to incur custodial site costs in support of the ongoing energy needs of the Paperboard and High-Yield Pulp operations. The company expects to incur net custodial site costs totaling $20 - $22 million in 2025.

In October 2024, a fire occurred at the company’s Jesup plant during a planned maintenance activity. Operations have since resumed at the plant. The company, however, expects additional capital expenditures of approximately $15 million over the next two years.

Rayonier Advanced expects adjusted EBITDA to be between $215 million and $235 million in 2025. The company expects stronger earnings in the second half of 2025 compared with the first half due to extended maintenance outages at all three High Purity Cellulose facilities in March and April. The guidance also factors in the impact of the 25% tariff on U.S. paperboard sales. The company cautions that the guidance remains subject to additional tariffs.

The company expects to achieve $10 million in production efficiencies in 2025, driven by $15 million in strategic capital investments and other continuous improvement initiatives.

Adjusted free cash flow is expected to be in the range of $25-$45 million in 2025.

Rayonier Advanced’s Price Performance & Zacks Rank

Shares of the company have gained 97.1% in the past year compared with the industry’s 18.5% growth.