Q2 2026 Rayonier Advanced Materials Inc Earnings Call Transcript
Key Points
- Rayonier Advanced Materials Inc (RYAM) reported a strong sequential improvement in Q2 2026, with adjusted EBITDA increasing to $40 million from $8 million in Q1, and a 43% year-over-year increase.
- Cellulose specialties pricing increased 21% year-over-year, demonstrating the differentiated performance and value of the portfolio, with expectations for pricing to remain significantly above prior year levels through the second half.
- The company is advancing a comprehensive strategic review, expected to conclude in Q4 2026, with constructive engagement from interested parties and a clear mandate to maximize shareholder value.
- RYAM is the sole remaining U.S. supplier of nitrocellulose-grade dissolving wood pulp, a mission-critical feedstock for defense and industrial applications, reinforcing the strategic relevance of its assets.
- The company has identified a tangible pipeline of reliability, productivity, and cost initiatives, including energy efficiency and process optimization, which are expected to improve earnings and cash generation.
- Year-to-date adjusted free cash flow improved by $57 million compared to the prior year period, keeping the company on track to generate positive free cash flow for 2026.
- The company is advancing trade actions, including final Section 301 tariffs on Brazilian and Norwegian dissolving wood pulp imports, which are expected to create fairer competitive conditions for U.S. suppliers.
- Rayonier Advanced Materials Inc (RYAM) reported a loss from continuing operations of $33 million in Q2 2026, which included a $13 million non-cash asset impairment charge related to high-yield pulp.
- The paperboard and high-yield pulp segment continued to underperform, with adjusted EBITDA declining to negative $10 million, impacted by lower pricing and planned maintenance downtime.
- The company's leverage remains elevated, with net secured leverage at 4.2 times covenant EBITDA, close to the covenant test of 4.75 times.
- Cellulose specialties volumes remained lower year-over-year as the company continued to execute its value-based pricing initiatives, and second-half volumes are expected to improve only modestly.
- The company faces significant uncertainty from recently announced tariffs on certain Canadian-origin products, which could materially impact the economics of its paperboard and high-yield pulp business.
- Certain end markets continue to be challenged, and performance across portions of the portfolio, particularly paperboard and high-yield pulp, must improve to achieve the company's financial targets.
- The company's adjusted free cash flow remained negative at negative $8 million year-to-date, despite the significant improvement from the prior year period.
Good morning and welcome to the Ryam Second Quarter 2026 Earnings Conference Call.
(Operator Instructions)
I would now like to turn the call over to your host, Cody Lacoste, Senior Manager of Investor Relations and Corporate Development.
Good morning, and welcome to Ryam's second quarter 2026 earnings conference call.
Joining me today are Daniel Krawczyk, our President and Chief Executive Officer, and Marcus Moeltner, our Senior Vice President of Finance, Chief Financial Officer, and Treasurer.
Last evening, we released our earnings report and accompanying presentation materials, which are available on our website at riam.com.
These materials provide key insights into our financial performance and strategic priorities.
During today's discussion, we may make forward-looking statements subject to risks and uncertainty that could cause actual results to differ materially. These
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