Rayonier Advanced Materials Reports First Quarter 2018 Results

• First quarter 2018 net income of $24 million and EBITDA of $86 million
• Diluted earnings per share of $0.38; 153 percent increase from prior year
• Pulp contributed significant EBITDA; Forest Products delivered solid profitability despite duties on U.S. sales; High Purity Cellulose impacted by production issues in two facilities and a spike in energy costs
• Integration of Tembec progressing as planned with significant contributions to first quarter profitability
• $7 million of transformation and synergy savings achieved; on track to meet 2018 target of $40 million

Rayonier Advanced Materials Inc. (the “Company”) (NYSE:RYAM) today reported first quarter 2018 net income of $24 million, or $0.38 per diluted common share compared to $10 million, or $0.15 per diluted common share in the first quarter of 2017, a 153 percent increase in diluted earnings per share. Increased earnings are primarily due to the impact of the November 2017 acquisition of Tembec Inc. (“Tembec”).

“Our first full quarter of operations following the acquisition of Tembec clearly demonstrates the accretive benefits of the enhanced scale and diversity of our combined business, as strength in our commodity segments offset temporary challenges in our High Purity Cellulose segment. While I am disappointed with the production issues in our Jesup and Tartas facilities and an unexpected spike in natural gas distribution costs during the unusually cold January in the southeast U.S., I am confident that these issues are behind us,” said Paul Boynton, Chairman, President and Chief Executive Officer. “Importantly, robust pricing and profitability in our high yield pulp and lumber businesses are now expected to remain at elevated levels through the near term. The integration of Tembec’s operations are proceeding in line with our expectations as we delivered over $7 million of savings during the quarter and anticipate that these results will accelerate through the year as we work to reach our $40 million target. Looking forward, I am confident in our ability to execute on our strategic plan for the full year.”

Forest Products
First quarter 2018 net sales and operating income were $99 million and $10 million, respectively, as a result of the Tembec acquisition.

On a combined basis, first quarter 2018 net sales increased $16 million from the $83 million 2017 combined amount primarily due to a 30 percent increase in lumber prices. First quarter 2018 operating income increased $4 million from the $6 million 2017 combined amount primarily due to higher sales prices partially offset by duties for lumber exports to the U.S. and higher raw material costs.

Pulp
First quarter 2018 net sales and operating income were $85 million and $23 million, respectively, as a result of the Tembec acquisition.

On a combined basis, first quarter 2018 net sales increased $21 million from the $64 million 2017 combined amount primarily due to higher sales prices. First quarter 2018 operating income increased $18 million from the $5 million 2017 combined amount primarily due to higher sales prices slightly offset by higher costs.

Paper
First quarter 2018 net sales and operating income were $76 million and $3 million, respectively, as a result of the Tembec acquisition.

On a combined basis, first quarter 2018 net sales increased $4 million from the $72 million 2017 combined amount primarily due to higher sales prices. First quarter 2018 operating income decreased $8 million from the $11 million 2017 combined amount primarily due to higher pulp costs, a raw material in the production of paperboard, as well as, increased depreciation & amortization and duties for newsprint exports to the U.S.
more detail at: http://investors.rayonieram.com/phoenix.zhtml?c=253219&p=irol-newsArticle&ID=2347496

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