RYAM's Strong 2024 Financial Results and Tariff Update: A Glimpse into the Company's Resilience and Growth Potential

Rayonier Advanced Materials Inc. (RYAM), the global leader in High Purity Cellulose, has announced its unaudited preliminary financial results for the fiscal year ended December 31, 2024, and provided an update on tariffs. These preliminary results showcase the company's resilience and growth potential, despite facing challenges in the form of tariffs and plant suspensions.

Financial Highlights:
RYAM's preliminary 2024 results reveal a compelling turnaround story, with several key metrics pointing to improved operational efficiency and financial health. The 60% surge in Adjusted EBITDA to $222 million and expansion of EBITDA margin to 13.5% demonstrate the success of management's strategic initiatives. The company's robust cash generation is particularly noteworthy, with operating cash flow of $205 million and adjusted free cash flow of $130 million representing significant year-over-year improvements of $69 million and $77 million, respectively. This enhanced cash generation has enabled a $73 million reduction in net secured debt, strengthening the balance sheet with a net secured leverage of 2.7x, well below the covenant threshold of 5.0x.

Looking ahead to 2025, the projected mid-single-digit increase in Cellulose Specialties prices aligns with the company's "value over volume" strategy, potentially offsetting volume declines from the Temiscaming plant suspension. However, the looming 25% tariff on Canadian paperboard exports to the U.S. presents a significant challenge, potentially impacting $3.5 million monthly or up to $42 million annually. This exposure, representing 11% of total revenues, requires careful monitoring, though management's proactive mitigation efforts and strong cash generation position should help buffer these headwinds.

In conclusion, RYAM's strong preliminary 2024 financial results and proactive approach to tariffs highlight the company's resilience and growth potential. Despite facing challenges, RYAM has demonstrated its ability to adapt and thrive in a dynamic business environment. As the company continues to execute its strategic initiatives and navigate the tariff landscape, investors should remain optimistic about its long-term prospects.