Nov 04, 2020 4:21 PM
Third Quarter 2020 Highlights
Year-to-date net loss from continuing operations for the nine months ended
“Driven by strong lumber prices, better reliability in High Purity Cellulose and an ongoing focus of reducing costs, third quarter results were positive,” said
Third Quarter 2020 Operating Results
Net sales comprised the following for the periods presented:
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
High Purity Cellulose |
$ |
253 |
|
|
|
$ |
255 |
|
|
|
$ |
268 |
|
|
|
$ |
757 |
|
|
|
$ |
822 |
|
|
Forest Products |
103 |
|
|
|
70 |
|
|
|
65 |
|
|
|
255 |
|
|
|
222 |
|
|
|||||
Paperboard |
47 |
|
|
|
43 |
|
|
|
54 |
|
|
|
140 |
|
|
|
151 |
|
|
|||||
Pulp & Newsprint |
38 |
|
|
|
43 |
|
|
|
46 |
|
|
|
127 |
|
|
|
161 |
|
|
|||||
Eliminations |
(17 |
) |
|
|
(15 |
) |
|
|
(17 |
) |
|
|
(49 |
) |
|
|
(49 |
) |
|
|||||
Total net sales |
$ |
424 |
|
|
|
$ |
397 |
|
|
|
$ |
416 |
|
|
|
$ |
1,230 |
|
|
|
$ |
1,307 |
|
|
Operating results comprised the following for the periods presented:
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
High Purity Cellulose |
$ |
8 |
|
|
|
$ |
7 |
|
|
|
$ |
7 |
|
|
|
$ |
10 |
|
|
|
$ |
11 |
|
|
Forest Products |
25 |
|
|
|
(4 |
) |
|
|
(5 |
) |
|
|
20 |
|
|
|
(27 |
) |
|
|||||
Paperboard |
3 |
|
|
|
6 |
|
|
|
2 |
|
|
|
14 |
|
|
|
1 |
|
|
|||||
Pulp & Newsprint |
(6 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(18 |
) |
|
|
3 |
|
|
|||||
Corporate |
(13 |
) |
|
|
(19 |
) |
|
|
(8 |
) |
|
|
(36 |
) |
|
|
(39 |
) |
|
|||||
Total operating income (loss) |
$ |
17 |
|
|
|
$ |
(15 |
) |
|
|
$ |
(8 |
) |
|
|
$ |
(10 |
) |
|
|
$ |
(51 |
) |
|
High Purity Cellulose
Operating results for the three and nine month periods ended
Compared to the second quarter of 2020, operating income improved
Forest Products
The operating results for the three and nine months ended
Compared to the second quarter of 2020, the operating results improved by
Paperboard
Operating income improved
Compared to the second quarter of 2020, operating income declined
Pulp & Newsprint
Operating income for the three and nine months ended
The operating loss was similar to the second quarter of 2020, with lower newsprint and pulp sales volumes offset by lower transportation costs due to the lower volumes.
Corporate
The operating loss for the three months ended
Compared to the second quarter of 2020, the operating loss improved by
Non-Operating Expenses
Interest expense for the three and nine months ended
Income Taxes
As a result of the Company’s operating results combined with certain tax adjustments recorded during the period, the effective tax rate percent for the third quarter of 2020 is not meaningful. The 2020 effective tax rate benefit differs from the federal statutory rate of 21 percent primarily due to the release of certain valuation allowances related to nondeductible interest expense, benefits from the CARES Act, tax return to accrual adjustments, and tax credits, partially offset by nondeductible interest expense in the
Cash Flows & Liquidity
For the nine months ended
For the nine months ended
The Company ended the third quarter of 2020 with
The Company remains well within compliance with its third quarter covenants, including a Gross Secured Leverage Ratio of 4.0 times compared to a requirement of less than 6.65 times and an Interest Coverage Ratio of 2.4 times compared to a requirement of 1.4 times.
Market Assessment
The full year outlook for each of the Company’s segments remains difficult to provide due to the uncertainty of the magnitude and timing of economic recovery due to the COVID-19 pandemic and the risk of supply chain disruptions beyond the control of the Company. As such, the Company has determined to suspend its guidance. The market assessment represents the Company’s best current estimate of each business in this environment.
High Purity Cellulose
During the third quarter, the Company experienced a reduction in overall sales volumes for its cellulose specialties products driven by weakness in the industrial, automotive and construction markets. The Company believes its diversified end-markets, and its customers’ focus on security of supply, provide greater earnings stability but does not eliminate the risk associated with the demand impact of COVID-19 on its end markets. The outlook for sales of cellulose specialties is highly dependent on the global economic recovery, which will likely continue to be impacted by the pandemic for the foreseeable future. For its commodity products, viscose prices have improved from lows and are expected to continue into the fourth quarter, with price increases for both October and November, marking the first increase in two years. Meanwhile, fluff pulp prices have declined modestly. Overall, the Company expects higher commodity sales in the fourth quarter due to shipping delays and strong production in the third quarter.
Certain costs, including wood, energy and commodity chemical prices have declined from prior year levels due to both market conditions and strategic actions. However, future input prices and availability of these inputs are difficult to predict due to the current unprecedented economic conditions.
Forest Products
Late in the second quarter, lumber sales prices surged on the back of strong repair and remodel activity with high demand for stud lumber.
As announced in February by the
Paperboard
COVID-19 has had a modest impact on Paperboard sales while profitability has benefited from lower input costs offset by sales and mix impact declines. Paperboard for packaging and lottery markets have been generally resilient, while commercial printing has shown weakness.
Pulp & Newsprint
After significant improvements in high-yield pulp demand and pricing at the beginning of the year, the weakness in the broader paper pulp market caused by the COVID-19 pandemic has negatively impacted pricing of high-yield pulp products. Prices have recently increased, while overall input costs have remained stable and the Company expects to produce at normal levels for the near future with elevated sales volumes in the fourth quarter due to improved logistics.
Demand for newsprint products has declined approximately 31 percent since the beginning of the year, primarily due to COVID-19, resulting in reduced sales prices and volumes. In response, North American producers have announced production downtime, resulting in a temporary reduction of newsprint production capacity of approximately one third. The Company is managing its production to maximize profitability and optimize cash flows until the market stabilizes, including reducing capacity to run only one of its two production lines. Late in the third quarter, the Company launched the Envirosmart™ food service bag targeting the quick service restaurant end-market and used for sandwiches and to-go orders, which have grown in the post COVID-19 environment.
Conclusion
"The strong quarterly results driven by record lumber prices and reduced costs provide incremental financial flexibility to the organization. We expect solid profitability in lumber for the fourth quarter and we are starting to see signs of a recovery in viscose and high-yield pulp prices. As a result, we are generating improved cash flows and are encouraged by the positive movement in commodity markets.” concluded
Conference Call Information
Investors may listen to the conference call by dialing 877-407-8293, no passcode required. For international parties, dial 201-689-8349. A replay of the teleconference will be available one hour after the call ends until
About
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Rayonier Advanced Materials’ future events, developments, or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,” “forecast,” “anticipate,” “guidance,” and other similar language. However, the absence of these or similar words or expressions does not mean a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained and it is possible actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.
Our operations are subject to a number of risks and uncertainties including, but not limited to, those listed below. When considering an investment in our securities, you should carefully read and consider these risks, together with all other information in our Annual Report on Form 10-K and our other filings and submissions to the
Other important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements that may have been made in this document are described or will be described in our filings with the
Non-GAAP Financial Measures
This earnings release and the accompanying schedules contain certain non-GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted free cash flows, adjusted operating income, adjusted net income and adjusted net debt. These non-GAAP measures are reconciled to each of their respective most directly comparable GAAP financial measures beginning on Schedule D of this earnings release. We believe these non-GAAP measures provide useful information to our board of directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes.
We do not consider these non-GAAP measures an alternative to financial measures determined in accordance with GAAP. The principal limitations of these non-GAAP financial measures are that they may exclude significant expenses and income items that are required by GAAP to be recognized in our consolidated financial statements. In addition, they reflect the exercise of management’s judgment about which expenses and income items are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management provides reconciliations of the non-GAAP financial measures we use to their most directly comparable GAAP measures. Non-GAAP financial measures should not be relied upon, in whole or part, in evaluating the financial condition, results of operations or future prospects of the Company.
Condensed Consolidated Statements of Income (Loss)
(millions of dollars, except per share information) |
||||||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
$ |
424 |
|
|
|
$ |
397 |
|
|
|
$ |
416 |
|
|
|
$ |
1,230 |
|
|
|
$ |
1,307 |
|
|
Cost of Sales |
(374 |
) |
|
|
(377 |
) |
|
|
(399 |
) |
|
|
(1,150 |
) |
|
|
(1,265 |
) |
|
|||||
Gross Margin |
50 |
|
|
|
20 |
|
|
|
17 |
|
|
|
80 |
|
|
|
42 |
|
|
|||||
Selling, general & administrative expenses |
(20 |
) |
|
|
(22 |
) |
|
|
(23 |
) |
|
|
(62 |
) |
|
|
(72 |
) |
|
|||||
Duties |
(8 |
) |
|
|
(6 |
) |
|
|
(5 |
) |
|
|
(20 |
) |
|
|
(16 |
) |
|
|||||
Foreign exchange gains (losses) |
(1 |
) |
|
|
(4 |
) |
|
|
— |
|
|
|
1 |
|
|
|
(3 |
) |
|
|||||
Other operating income (expense), net |
(4 |
) |
|
|
(4 |
) |
|
|
3 |
|
|
|
(9 |
) |
|
|
(2 |
) |
|
|||||
Operating Income (Loss) |
17 |
|
|
|
(15 |
) |
|
|
(8 |
) |
|
|
(10 |
) |
|
|
(51 |
) |
|
|||||
Interest expense |
(16 |
) |
|
|
(16 |
) |
|
|
(15 |
) |
|
|
(47 |
) |
|
|
(43 |
) |
|
|||||
Interest income and other, net |
— |
|
|
|
(1 |
) |
|
|
4 |
|
|
|
— |
|
|
|
6 |
|
|
|||||
Income (Loss) From Continuing Operations Before Income Taxes |
1 |
|
|
|
(32 |
) |
|
|
(19 |
) |
|
|
(57 |
) |
|
|
(88 |
) |
|
|||||
Income tax benefit (expense) |
28 |
|
|
|
19 |
|
|
|
5 |
|
|
|
48 |
|
|
|
26 |
|
|
|||||
Income (Loss) from Continuing Operations |
$ |
29 |
|
|
|
$ |
(13 |
) |
|
|
$ |
(14 |
) |
|
|
$ |
(9 |
) |
|
|
$ |
(62 |
) |
|
Income (loss) from discontinued operations, net of taxes |
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
10 |
|
|
|||||
Net Income (Loss) Attributable to the Company |
29 |
|
|
|
(13 |
) |
|
|
(14 |
) |
|
|
(8 |
) |
|
|
(52 |
) |
|
|||||
Mandatory convertible stock dividends |
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
|
|
(8 |
) |
|
|||||
Net Income (Loss) Available to Common Stockholders |
$ |
29 |
|
|
|
$ |
(13 |
) |
|
|
$ |
(16 |
) |
|
|
$ |
(8 |
) |
|
|
$ |
(60 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic Earnings Per Common Share: |
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations |
$ |
0.46 |
|
|
|
$ |
(0.20 |
) |
|
|
$ |
(0.29 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(1.36 |
) |
|
Income from discontinued operations |
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.20 |
|
|
|||||
Net income (loss) per common share - Basic |
$ |
0.46 |
|
|
|
$ |
(0.20 |
) |
|
|
$ |
(0.29 |
) |
|
|
$ |
(0.13 |
) |
|
|
$ |
(1.16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Diluted Earnings Per Common Share: |
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations |
$ |
0.45 |
|
|
|
$ |
(0.20 |
) |
|
|
$ |
(0.29 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(1.36 |
) |
|
Income from discontinued operations |
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.20 |
|
|
|||||
Net income (loss) per common share - Diluted |
$ |
0.45 |
|
|
|
$ |
(0.20 |
) |
|
|
$ |
(0.29 |
) |
|
|
$ |
(0.13 |
) |
|
|
$ |
(1.16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Shares Used for Determining: |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic EPS |
63,310,689 |
|
|
|
63,235,151 |
|
|
|
56,089,839 |
|
|
|
63,178,342 |
|
|
|
51,576,123 |
|
|
|||||
Diluted EPS |
63,916,242 |
|
|
|
63,235,151 |
|
|
|
56,089,839 |
|
|
|
63,178,342 |
|
|
|
51,576,123 |
|
|
|||||
A |
Condensed Consolidated Balance Sheets
(millions of dollars) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
83 |
|
|
$ |
64 |
|
Other current assets |
558 |
|
|
510 |
|
||
Property, plant and equipment, net |
1,263 |
|
|
1,316 |
|
||
Other assets |
586 |
|
|
590 |
|
||
|
$ |
2,490 |
|
|
$ |
2,480 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current maturities of long-term debt |
$ |
16 |
|
|
$ |
19 |
|
Other current liabilities |
285 |
|
|
267 |
|
||
Long-term debt and finance lease obligations |
1,062 |
|
|
1,063 |
|
||
Non-current environmental liabilities |
160 |
|
|
160 |
|
||
Other non-current liabilities |
267 |
|
|
288 |
|
||
Total stockholders’ equity |
700 |
|
|
683 |
|
||
|
$ |
2,490 |
|
|
$ |
2,480 |
|
B |
Condensed Consolidated Statements of Cash Flows
(millions of dollars) |
|||||||
|
Nine Months Ended |
||||||
|
|
|
|
||||
Operating Activities: |
|
|
|
||||
Net income (loss) |
$ |
(8 |
) |
|
$ |
(51 |
) |
Income from discontinued operations |
(1 |
) |
|
(10 |
) |
||
Adjustments: |
|
|
|
||||
Depreciation and amortization |
111 |
|
|
112 |
|
||
Other items to reconcile net income to cash provided by operating activities |
28 |
|
|
(8 |
) |
||
Changes in working capital and other assets and liabilities |
(67 |
) |
|
(38 |
) |
||
Cash provided by (used for) operating activities- continuing operations |
63 |
|
|
5 |
|
||
Cash provided by (used for) operating activities- discontinued operations |
— |
|
|
19 |
|
||
Cash Provided by (Used for) Operating Activities |
63 |
|
|
24 |
|
||
|
|
|
|
||||
Investing Activities: |
|
|
|
||||
Capital expenditures |
(43 |
) |
|
(81 |
) |
||
Cash provided by (used for) investing activities-continuing operations |
(43 |
) |
|
(81 |
) |
||
Cash provided by (used for) investing activities-discontinued operations |
— |
|
|
(2 |
) |
||
Cash Provided by (Used for) Investing Activities |
(43 |
) |
|
(83 |
) |
||
|
|
|
|
||||
Financing Activities: |
|
|
|
||||
Changes in debt |
2 |
|
|
43 |
|
||
Dividends paid |
— |
|
|
(19 |
) |
||
Common stock repurchased, net of issuances |
(1 |
) |
|
(6 |
) |
||
Debt issuance costs |
(3 |
) |
|
— |
|
||
Cash provided by (used for) financing activities-continuing operations |
(2 |
) |
|
18 |
|
||
Cash provided by (used for) financing activities-discontinued operations |
— |
|
|
— |
|
||
Cash Provided by (Used for) Financing Activities |
(2 |
) |
|
18 |
|
||
|
|
|
|
||||
Cash and Cash Equivalents: |
|
|
|
||||
Change in cash and cash equivalents |
18 |
|
|
(41 |
) |
||
Net effect of foreign exchange on cash and cash equivalents |
1 |
|
|
(5 |
) |
||
Balance, beginning of year |
64 |
|
|
109 |
|
||
Balance, end of period |
$ |
83 |
|
|
$ |
63 |
|
C |
Sales Volumes and Average Prices
|
|||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Sales Prices: |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose
|
|
|
|
|
|
|
|
|
|
||||||||||
Cellulose Specialties |
$ |
1,348 |
|
|
$ |
1,309 |
|
|
$ |
1,317 |
|
|
$ |
1,321 |
|
|
$ |
1,303 |
|
Commodity Products |
$ |
624 |
|
|
$ |
620 |
|
|
$ |
768 |
|
|
$ |
611 |
|
|
$ |
803 |
|
Forest Products
|
|
|
|
|
|
|
|
|
|
||||||||||
Lumber |
$ |
592 |
|
|
$ |
391 |
|
|
$ |
366 |
|
|
$ |
463 |
|
|
$ |
370 |
|
Paperboard
|
|
|
|
|
|
|
|
|
|
||||||||||
Paperboard |
$ |
1,048 |
|
|
$ |
1,091 |
|
|
$ |
1,097 |
|
|
$ |
1,082 |
|
|
$ |
1,105 |
|
Pulp & Newsprint
|
|
|
|
|
|
|
|
|
|
||||||||||
Pulp |
$ |
486 |
|
|
$ |
493 |
|
|
$ |
455 |
|
|
$ |
481 |
|
|
$ |
524 |
|
Newsprint |
$ |
428 |
|
|
$ |
412 |
|
|
$ |
532 |
|
|
$ |
418 |
|
|
$ |
542 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales Volumes: |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose
|
|
|
|
|
|
|
|
|
|
||||||||||
Cellulose Specialties |
125 |
|
|
123 |
|
|
137 |
|
|
371 |
|
|
432 |
|
|||||
Commodity Products |
104 |
|
|
122 |
|
|
88 |
|
|
338 |
|
|
246 |
|
|||||
Forest Products
|
|
|
|
|
|
|
|
|
|
||||||||||
Lumber |
144 |
|
|
142 |
|
|
134 |
|
|
435 |
|
|
462 |
|
|||||
Paperboard
|
|
|
|
|
|
|
|
|
|
||||||||||
Paperboard |
45 |
|
|
40 |
|
|
49 |
|
|
130 |
|
|
137 |
|
|||||
Pulp & Newsprint
|
|
|
|
|
|
|
|
|
|
||||||||||
Pulp |
49 |
|
|
53 |
|
|
45 |
|
|
154 |
|
|
145 |
|
|||||
Newsprint |
19 |
|
|
27 |
|
|
38 |
|
|
85 |
|
|
123 |
|
|||||
D |
Reconciliation of Non-GAAP Measures
|
|||||||||||||||||||||||||||
EBITDA by Segment (a): |
Three Months Ended |
||||||||||||||||||||||||||
Forest
|
|
Paperboard |
|
Pulp &
|
|
High Purity
|
|
Corporate
|
|
Total |
|||||||||||||||||
Income (loss) from continuing operations |
$ |
26 |
|
|
|
$ |
3 |
|
|
$ |
(5 |
) |
|
|
$ |
8 |
|
|
$ |
(3 |
) |
|
|
$ |
29 |
|
|
Depreciation and amortization |
3 |
|
|
|
4 |
|
|
1 |
|
|
|
28 |
|
|
2 |
|
|
|
38 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
16 |
|
|
|
16 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
(28 |
) |
|
|
(28 |
) |
|
||||||
EBITDA |
$ |
29 |
|
|
|
$ |
7 |
|
|
$ |
(4 |
) |
|
|
$ |
36 |
|
|
$ |
(13 |
) |
|
|
$ |
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Three Months Ended |
||||||||||||||||||||||||||
|
Forest
|
|
Paperboard |
|
Pulp &
|
|
High Purity
|
|
Corporate
|
|
Total |
||||||||||||||||
Income (loss) from continuing operations |
$ |
(5 |
) |
|
|
$ |
3 |
|
|
$ |
(2 |
) |
|
|
$ |
8 |
|
|
$ |
(18 |
) |
|
|
$ |
(14 |
) |
|
Depreciation and amortization |
2 |
|
|
|
4 |
|
|
1 |
|
|
|
33 |
|
|
— |
|
|
|
40 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
15 |
|
|
|
15 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
(5 |
) |
|
|
(5 |
) |
|
||||||
EBITDA |
(3 |
) |
|
|
7 |
|
|
(1 |
) |
|
|
41 |
|
|
(8 |
) |
|
|
36 |
|
|
||||||
Loan amendment costs |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
3 |
|
|
|
3 |
|
|
||||||
Insurance recovery |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
(4 |
) |
|
|
(4 |
) |
|
||||||
Adjusted EBITDA |
$ |
(3 |
) |
|
|
$ |
7 |
|
|
$ |
(1 |
) |
|
|
$ |
41 |
|
|
$ |
(9 |
) |
|
|
$ |
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
EBITDA by Segment (a): |
Nine Months Ended |
||||||||||||||||||||||||||
Forest
|
|
Paperboard |
|
Pulp &
|
|
High Purity
|
|
Corporate
|
|
Total |
|||||||||||||||||
Income (loss) from continuing operations |
$ |
20 |
|
|
|
$ |
15 |
|
|
$ |
(14 |
) |
|
|
$ |
8 |
|
|
$ |
(38 |
) |
|
|
$ |
(9 |
) |
|
Depreciation and amortization |
8 |
|
|
|
12 |
|
|
3 |
|
|
|
85 |
|
|
3 |
|
|
|
111 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
47 |
|
|
|
47 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
(48 |
) |
|
|
(48 |
) |
|
||||||
EBITDA |
$ |
28 |
|
|
|
$ |
27 |
|
|
$ |
(11 |
) |
|
|
$ |
93 |
|
|
$ |
(36 |
) |
|
|
$ |
100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Nine Months Ended |
||||||||||||||||||||||||||
|
Forest
|
|
Paperboard |
|
Pulp &
|
|
High Purity
|
|
Corporate &
|
|
Total |
||||||||||||||||
Income (loss) from continuing operations |
$ |
(27 |
) |
|
|
$ |
2 |
|
|
$ |
9 |
|
|
|
$ |
10 |
|
|
$ |
(56 |
) |
|
|
$ |
(62 |
) |
|
Depreciation and amortization |
7 |
|
|
|
12 |
|
|
3 |
|
|
|
90 |
|
|
— |
|
|
|
112 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
43 |
|
|
|
43 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
(26 |
) |
|
|
(26 |
) |
|
||||||
EBITDA |
$ |
(20 |
) |
|
|
$ |
14 |
|
|
$ |
12 |
|
|
|
$ |
100 |
|
|
$ |
(39 |
) |
|
|
$ |
67 |
|
|
Non-recurring expense |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
1 |
|
|
|
1 |
|
|
||||||
Loan amendment costs |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
3 |
|
|
|
3 |
|
|
||||||
Insurance recovery |
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
(4 |
) |
|
|
(4 |
) |
|
||||||
Adjusted EBITDA |
$ |
(20 |
) |
|
|
$ |
14 |
|
|
$ |
12 |
|
|
|
$ |
100 |
|
|
$ |
(39 |
) |
|
|
$ |
67 |
|
|
(a) |
EBITDA is defined as income (loss) from continuing operations before interest, taxes, depreciation and amortization. EBITDA is a non-GAAP measure used by our Chief Operating Decision Maker, existing stockholders and potential stockholders to measure how the Company is performing relative to the assets under management. Adjusted EBITDA is defined as EBITDA adjusted for items management believes do not represent core operations. Management believes this measure is useful to evaluate the Company's performance. |
E |
Reconciliation of Non-GAAP Measures (Continued)
(millions of dollars, except per share information) |
|||||||||
|
Nine Months Ended |
||||||||
Adjusted Free Cash Flows (a): |
|
|
|
||||||
Cash provided by operating activities of continuing operations |
$ |
63 |
|
|
|
$ |
5 |
|
|
Capital expenditures |
(29 |
) |
|
|
(63 |
) |
|
||
Adjusted Free Cash Flows |
$ |
34 |
|
|
|
$ |
(58 |
) |
|
(a) |
Adjusted free cash flows is defined as cash provided by (used for) operating activities from continuing operations adjusted for capital expenditures excluding strategic capital. Adjusted free cash flows is a non-GAAP measure of cash generated during a period which is available for dividend distribution, debt reduction, strategic acquisitions and repurchase of our common stock. Adjusted free cash flows is not necessarily indicative of the adjusted free cash flows that may be generated in future periods. |
Adjusted Net Debt (a): |
|
|
|
||||||
Current maturities of long-term debt |
$ |
16 |
|
|
|
$ |
19 |
|
|
Short-term factoring facility - |
2 |
|
|
|
— |
|
|
||
Long-term debt & finance lease obligation |
1,062 |
|
|
|
1,063 |
|
|
||
Total debt |
1,080 |
|
|
|
1,082 |
|
|
||
Original issue discount, premiums and debt issuance costs |
8 |
|
|
|
6 |
|
|
||
Cash and cash equivalents |
(83 |
) |
|
|
(64 |
) |
|
||
Adjusted Net Debt |
$ |
1,005 |
|
|
|
$ |
1,024 |
|
|
(a) |
Adjusted net debt is defined as the amount of debt after the consideration of the original issue discount, premiums, and debt issuance costs, less cash. Adjusted net debt is a non-GAAP measure of debt and is not necessarily indicative of the adjusted net debt that may occur in future periods. |
F |
Reconciliation of Non-GAAP Measures (Continued)
(millions of dollars, except per share information) |
|||||||||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income (Loss) and Income (Loss) from Continuing Operations (a): |
$ |
|
Per
|
|
$ |
|
Per
|
|
$ |
|
Per
|
|
$ |
|
Per
|
|
$ |
|
Per
|
||||||||||||||||||||||||||||
Operating Income (Loss) |
$ |
17 |
|
|
|
|
$ |
(15 |
) |
|
|
|
|
$ |
(8 |
) |
|
|
|
|
$ |
(10 |
) |
|
|
|
|
$ |
(51 |
) |
|
|
|
||||||||||||||
Non-recurring expense |
— |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
1 |
|
|
|
|
|||||||||||||||||||
Loan amendment costs |
— |
|
|
|
|
— |
|
|
|
|
|
3 |
|
|
|
|
|
— |
|
|
|
|
|
3 |
|
|
|
|
|||||||||||||||||||
Insurance recovery |
— |
|
|
|
|
— |
|
|
|
|
|
(4 |
) |
|
|
|
|
— |
|
|
|
|
|
(4 |
) |
|
|
|
|||||||||||||||||||
Adjusted Operating Income (Loss) |
$ |
17 |
|
|
|
|
$ |
(15 |
) |
|
|
|
|
$ |
(9 |
) |
|
|
|
|
$ |
(10 |
) |
|
|
|
|
$ |
(51 |
) |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations |
$ |
29 |
|
|
$ |
0.45 |
|
|
$ |
(13 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(14 |
) |
|
|
$ |
(0.29 |
) |
|
|
$ |
(9 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(62 |
) |
|
|
$ |
(1.36 |
) |
|
Non-recurring expense |
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.02 |
|
|
||||||||||
Loan amendment costs |
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
0.06 |
|
|
||||||||||
Insurance recovery |
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
(0.07 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
(0.08 |
) |
|
||||||||||
Tax effects of adjustments |
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
||||||||||
Adjusted Income (Loss) from Continuing Operations |
$ |
29 |
|
|
$ |
0.45 |
|
|
$ |
(13 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(15 |
) |
|
|
$ |
(0.29 |
) |
|
|
$ |
(9 |
) |
|
|
$ |
(0.14 |
) |
|
|
$ |
(61 |
) |
|
|
$ |
(1.36 |
) |
|
(a) |
Adjusted Operating Income (Loss) is defined as operating income adjusted for non-recurring costs related to the Company’s review of its commodity asset portfolio, loan amendment costs and insurance recovery received. Adjusted income (loss) from Continuing Operations is defined as net income (loss) from Continuing Operations adjusted net of tax for non-recurring costs related to the Company’s review of its commodity asset portfolio, loan amendment costs and insurance recovery received. Adjusted operating and net income (loss) are not necessarily indicative of results that may be generated in future periods. |
G |
View source version on businesswire.com: https://www.businesswire.com/news/home/20201104005727/en/
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