RYAM Charts Path to $300 Million EBITDA Amid Challenging Markets and Resilient Core Performance

Core Business Delivers Stable Results and Clear Roadmap to Growth

Rayonier Advanced Materials (NYSE: RYAM) delivered its third quarter 2025 results showing both the resilience of its core Cellulose Specialties franchise and disciplined execution against long-term growth plans. Despite continued global market volatility and softening demand in certain segments, RYAM’s fundamentals are positioning the company for a step change in profitability and strategic transformation.

Quarterly Highlights: Loss Narrows, Core Business Strength Evident

For the third quarter, RYAM reported net sales of $353 million, a decline of $48 million from the same period last year, primarily driven by weaker sales volumes in key segments. The loss from continuing operations narrowed significantly to $4 million compared to a $33 million loss in the prior year quarter. Adjusted EBITDA came in at $42 million, down from $51 million year-over-year but improved versus last quarter. Management remains confident in the business outlook, expecting full-year 2025 Adjusted EBITDA of $135–$140 million and forecasting free cash flow improvements in the fourth quarter as working capital normalizes.

Cellulose Specialties Segment Remains a Pillar Despite Softness in Demand

The Cellulose Specialties business, which is RYAM’s flagship, demonstrated pricing strength: the average sales price for Q3 2025 increased 7% year-over-year to $1,873/ton. Despite a 17% drop in sales volume due to ongoing customer destocking and tariff impacts in acetate, the segment delivered $49 million in operating income, up $3 million from a year ago. Price increases, sales mix improvements, and a $7 million benefit from emission allowance sales contributed to this result. Notably, operational challenges at the Tartas plant and global market headwinds in acetates persist, but management expects ongoing price resets and targeted cost reductions to provide continued support.

Cost Control and Debt Management Remain in Focus

Year-to-date, RYAM reported a negative adjusted free cash flow of $83 million—primarily from working capital and timing, which is projected to reverse in the coming quarter. The company closed Q3 with $77 million in cash and total liquidity of $140 million, holding total debt at $794 million with a net secured leverage ratio of 4.1x. Investments are closely monitored, and RYAM reaffirmed it expects to generate $25–$30 million in free cash flow in Q4.

Biomaterials and Growth Projects Build Platform for 2027 Targets

RYAM continues to advance its strategy in biomaterials and renewable products, having restarted its lignosulfonate plant in France and invested in prebiotics, CTO facilities, and green energy ventures. Management highlighted the expectation that these new projects could collectively add over $30 million in proportional EBITDA by 2027. The AGE (Altamaha Green Energy) partnership and new product pipeline—including sustainable aviation fuels—remain under development, reinforcing RYAM’s growth ambitions.

EBITDA Bridge and Long-Term Guidance Reinforce Trajectory

Despite near-term softness, the long-term plan remains on course. Management projects run-rate EBITDA to exceed $300 million by the end of 2027—driven by multi-year price resets in Cellulose Specialties, ongoing cost efficiencies (targeting $30 million in savings by 2026), and incremental gains from biomaterials. RYAM’s focus is not only on recovering lost value but on expanding its specialty platform for the next market upturn.

Segment Performance Data: Volumes, Pricing, and Margins

Market Outlook: Focused on Cash Generation and Strategic Flexibility

Looking ahead, RYAM expects fourth-quarter performance to benefit from normalizing orders and improved working capital, even as market demand in several segments—particularly acetate, paperboard, and pulp—remains below historical averages. Tariffs and ongoing competitive pressure from imports remain the top risk factors. Notably, RYAM, alongside the USW, has filed anti-dumping petitions targeting Brazilian and Norwegian competitors, a move that could help stabilize market pricing in the longer run.

Key Takeaway for Investors: Core is Stabilizing, Growth Is Intentional

While challenges in paperboard and commodity pulp markets linger, RYAM’s robust Cellulose Specialties segment, firm pricing, and commitment to high-return growth investments set the stage for a sustained turnaround. Investors watching for recovery should monitor updates on the U.S. trade petitions, efficiency milestones, and the progress of new biomaterials projects—all of which could accelerate RYAM’s push toward its $300 million EBITDA goal by 2027.

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