Aug 04, 2020 6:24 PM
Second Quarter 2020 Highlights
Year-to-date net loss from continuing operations for the six months ended
“Second quarter results were below expectations primarily driven by the impacts of COVID-19,” said
Second Quarter 2020 Operating Results
Net sales comprised the following for the periods presented:
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
High Purity Cellulose |
$ |
255 |
|
|
|
$ |
250 |
|
|
|
$ |
269 |
|
|
|
$ |
505 |
|
|
|
$ |
555 |
|
|
Forest Products |
70 |
|
|
|
82 |
|
|
|
81 |
|
|
|
153 |
|
|
|
156 |
|
|
|||||
Paperboard |
43 |
|
|
|
50 |
|
|
|
50 |
|
|
|
94 |
|
|
|
97 |
|
|
|||||
Pulp & Newsprint |
43 |
|
|
|
47 |
|
|
|
65 |
|
|
|
90 |
|
|
|
115 |
|
|
|||||
Eliminations |
(15 |
) |
|
|
(19 |
) |
|
|
(14 |
) |
|
|
(34 |
) |
|
|
(32 |
) |
|
|||||
Total net sales |
$ |
397 |
|
|
|
$ |
410 |
|
|
|
$ |
450 |
|
|
|
$ |
807 |
|
|
|
$ |
891 |
|
|
Operating results comprised the following for the periods presented:
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
High Purity Cellulose |
$ |
7 |
|
|
|
$ |
(5 |
) |
|
|
$ |
7 |
|
|
|
$ |
2 |
|
|
|
$ |
4 |
|
|
Forest Products |
(4 |
) |
|
|
(1 |
) |
|
|
(16 |
) |
|
|
(5 |
) |
|
|
(22 |
) |
|
|||||
Paperboard |
6 |
|
|
|
5 |
|
|
|
1 |
|
|
|
11 |
|
|
|
(2 |
) |
|
|||||
Pulp & Newsprint |
(6 |
) |
|
|
(6 |
) |
|
|
6 |
|
|
|
(11 |
) |
|
|
8 |
|
|
|||||
Corporate |
(19 |
) |
|
|
(5 |
) |
|
|
(12 |
) |
|
|
(24 |
) |
|
|
(31 |
) |
|
|||||
Total operating income (loss) |
$ |
(15 |
) |
|
|
$ |
(12 |
) |
|
|
$ |
(15 |
) |
|
|
$ |
(27 |
) |
|
|
$ |
(43 |
) |
|
High Purity Cellulose
Operating results for the three and six month periods ended
Compared to the first quarter of 2020, operating income improved by
Forest Products
The operating loss for the three and six months ended
Compared to the first quarter of 2020, the operating loss increased by
Paperboard
Operating income improved
Compared to the first quarter of 2020, operating income improved
Pulp & Newsprint
Operating income for the three and six months ended
The operating loss was similar to the first quarter of 2020, with lower newsprint sales volumes offset by higher pulp sales prices.
Corporate
The operating loss for the three months ended
Compared to the first quarter of 2020, the operating loss was
Non-Operating Expenses
Interest expense for the three and six months ended
Income Taxes
The second quarter 2020 and 2019 effective tax rate from continuing operations was a benefit of 59 percent and 34 percent, respectively. 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, return to accrual adjustments, and tax credits, partially offset by nondeductible interest expense in the
Cash Flows & Liquidity
For the three and six months ended
For the three and six months ended
The Company ended the second quarter of 2020 with
The Company remains well within compliance with its second quarter covenants, including a Gross Secured Leverage Ratio of 4.8 times EBITDA compared to a covenant of less than 6.2 times and an Interest Coverage Ratio of 2.0 times compared to a covenant 1.6 times.
Market Assessment
A full year outlook for each of the Company’s segments is 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 second quarter, as a direct result of the COVID-19 pandemic, the Company experienced a reduction in overall demand for its cellulose specialties products, driven by weakness in the automotive, industrial and construction end-markets, while demand for acetate tow, food and pharmaceutical end-markets remained relatively stable. The Company believes its diversified end-markets, and its customers’ focus on security of supply, provide greater earnings stability during times of uncertainty but do 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 recovery of economic growth as the world emerges from the pandemic. For its commodity products, the pricing momentum of absorbent materials, primarily fluff pulp, experienced in the second quarter has dissipated and modest decreases have recently been experienced. Viscose pulp markets remain extremely weak as the
Certain costs, specifically wood, energy and commodity chemical prices have declined from prior year levels. However, future input prices and availability of chemicals are difficult to predict due to the current unprecedented economic conditions. The Company is seeing increasing pressure on certain chemical and transportation costs. Logistics delays, especially as it relates to ocean transportation, could result in the variability of revenue recognition. Operations at all four high purity cellulose mills are running at or near normal levels. The Company will continue to optimize its commodity profile to maximize profitability and, if necessary, will curtail production to minimize impacts of reduced demand.
Forest Products
Early in the second quarter, stemming from the COVID-19 pandemic, lumber demand and prices declined rapidly causing producers to curtail approximately 30 percent (at peak) of North American lumber production capacity. Later in the quarter, the demand for lumber improved significantly while North American production rates have been slower to restart, resulting in a supply and demand imbalance. As a result, lumber sales prices have surged. Repair and remodel activity is the main catalyst for this market resurgence with strong demand for stud lumber, resulting in a rare premium for stud products above random length lumber.
As announced in January by the
Paperboard
COVID-19 has had a muted impact on Paperboard sales and profitability has benefited from lower input costs offset by some sales mix decline. Paperboard for packaging and lottery markets have been generally resilient, while commercial printing has shown weakness. The Company expects stable sales volumes and to operate the paperboard assets at normal levels going forward.
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 is now negatively impacting pricing of high yield pulp products. Overall input costs have remained stable and the Company expects to produce at normal levels for the near future. However, a further deterioration of markets could require modest downtime to control inventory levels.
Demand for newsprint products has declined approximately 23 percent since the beginning of the year resulting in reduced sales prices and volumes, while input costs have remained stable. In response, North American producers have announced production downtime, resulting in reduced newsprint production capacity of approximately 33 percent. The Company intends to manage its production based on demand to maximize profitability and optimize cash flows until the market stabilizes.
Conclusion
"Despite the challenges from COVID-19, we believe that our core High Purity Cellulose segment represents a solid foundation to grow our business as we emerge from the unprecedented challenges and uncertainties in the global economy. With the earnings potential of our assets well above current levels, we continue to focus on operating safely, reducing costs and improving cash flow and liquidity. We believe that our business is resilient and the actions we have taken to increase financial flexibility in the near term will allow us to realize our potential in the post-pandemic world.” 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.
|
||||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||||||||
|
$ |
397 |
|
|
|
$ |
410 |
|
|
|
$ |
450 |
|
|
|
$ |
807 |
|
|
|
$ |
891 |
|
|
Cost of Sales |
(377 |
) |
|
|
(399 |
) |
|
|
(432 |
) |
|
|
(776 |
) |
|
|
(866 |
) |
|
|||||
Gross Margin |
20 |
|
|
|
10 |
|
|
|
18 |
|
|
|
31 |
|
|
|
26 |
|
|
|||||
Selling, general & administrative expenses |
(22 |
) |
|
|
(20 |
) |
|
|
(20 |
) |
|
|
(43 |
) |
|
|
(49 |
) |
|
|||||
Duties |
(6 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
|
|
(12 |
) |
|
|
(12 |
) |
|
|||||
Foreign exchange gains (losses) |
(4 |
) |
|
|
6 |
|
|
|
(2 |
) |
|
|
2 |
|
|
|
3 |
|
|
|||||
Other operating income (expense), net |
(4 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
(11 |
) |
|
|||||
Operating Income (Loss) |
(15 |
) |
|
|
(12 |
) |
|
|
(15 |
) |
|
|
(27 |
) |
|
|
(43 |
) |
|
|||||
Interest expense |
(16 |
) |
|
|
(15 |
) |
|
|
(14 |
) |
|
|
(31 |
) |
|
|
(28 |
) |
|
|||||
Interest income and other, net |
(1 |
) |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|||||
Income (Loss) From Continuing Operations Before Income Taxes |
(32 |
) |
|
|
(26 |
) |
|
|
(29 |
) |
|
|
(58 |
) |
|
|
(69 |
) |
|
|||||
Income tax benefit (expense) |
19 |
|
|
|
2 |
|
|
|
10 |
|
|
|
21 |
|
|
|
21 |
|
|
|||||
Income (Loss) from Continuing Operations |
$ |
(13 |
) |
|
|
$ |
(25 |
) |
|
|
$ |
(19 |
) |
|
|
$ |
(38 |
) |
|
|
$ |
(47 |
) |
|
Income (loss) from discontinued operations, net of taxes |
— |
|
|
|
1 |
|
|
|
4 |
|
|
|
1 |
|
|
|
10 |
|
|
|||||
Net Income (Loss) Attributable to the Company |
(13 |
) |
|
|
(24 |
) |
|
|
(15 |
) |
|
|
(37 |
) |
|
|
(37 |
) |
|
|||||
Mandatory convertible stock dividends |
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|||||
Net Income (Loss) Available to Common Stockholders |
$ |
(13 |
) |
|
|
$ |
(24 |
) |
|
|
$ |
(18 |
) |
|
|
$ |
(37 |
) |
|
|
$ |
(44 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic Earnings Per Common Share: |
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations |
$ |
(0.20 |
) |
|
|
$ |
(0.39 |
) |
|
|
$ |
(0.46 |
) |
|
|
$ |
(0.60 |
) |
|
|
$ |
(1.10 |
) |
|
Income from discontinued operations |
— |
|
|
|
0.01 |
|
|
|
0.09 |
|
|
|
0.01 |
|
|
|
0.21 |
|
|
|||||
Net income (loss) per common share - Basic |
$ |
(0.20 |
) |
|
|
$ |
(0.38 |
) |
|
|
$ |
(0.37 |
) |
|
|
$ |
(0.59 |
) |
|
|
$ |
(0.89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Diluted Earnings Per Common Share: |
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations |
$ |
(0.20 |
) |
|
|
$ |
(0.39 |
) |
|
|
$ |
(0.46 |
) |
|
|
$ |
(0.60 |
) |
|
|
$ |
(1.10 |
) |
|
Income from discontinued operations |
— |
|
|
|
0.01 |
|
|
|
0.09 |
|
|
|
0.01 |
|
|
|
0.21 |
|
|
|||||
Net income (loss) per common share - Diluted |
$ |
(0.20 |
) |
|
|
$ |
(0.38 |
) |
|
|
$ |
(0.37 |
) |
|
|
$ |
(0.59 |
) |
|
|
$ |
(0.89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Shares Used for Determining: |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic EPS |
63,235,151 |
|
|
|
62,982,735 |
|
|
|
49,572,055 |
|
|
|
63,111,058 |
|
|
|
49,282,418 |
|
|
|||||
Diluted EPS |
63,235,151 |
|
|
|
62,982,735 |
|
|
|
49,572,055 |
|
|
|
63,111,058 |
|
|
|
49,282,418 |
|
|
|||||
A |
|
|||||||
|
|||||||
|
2020 |
|
2019 |
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
49 |
|
|
$ |
64 |
|
Other current assets |
546 |
|
|
510 |
|
||
Property, plant and equipment, net |
1,267 |
|
|
1,316 |
|
||
Other assets |
583 |
|
|
590 |
|
||
|
$ |
2,445 |
|
|
$ |
2,480 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current maturities of long-term debt |
$ |
14 |
|
|
$ |
19 |
|
Other current liabilities |
291 |
|
|
267 |
|
||
Long-term debt and finance lease obligations |
1,061 |
|
|
1,063 |
|
||
Non-current environmental liabilities |
159 |
|
|
160 |
|
||
Other non-current liabilities |
271 |
|
|
288 |
|
||
Total stockholders’ equity |
649 |
|
|
683 |
|
||
|
$ |
2,445 |
|
|
$ |
2,480 |
|
B |
Condensed Consolidated Statements of Cash Flows
|
|||||||||
|
|||||||||
|
Six Months Ended |
||||||||
|
2020 |
|
2019 |
||||||
Operating Activities: |
|
|
|
||||||
Net income (loss) |
$ |
(37 |
) |
|
|
$ |
(37 |
) |
|
Income from discontinued operations |
(1 |
) |
|
|
(10 |
) |
|
||
Adjustments: |
|
|
|
||||||
Depreciation and amortization |
73 |
|
|
|
71 |
|
|
||
Other items to reconcile net income to cash provided by operating activities |
11 |
|
|
|
(8 |
) |
|
||
Changes in working capital and other assets and liabilities |
(35 |
) |
|
|
(11 |
) |
|
||
Cash provided by (used for) operating activities- continuing operations |
11 |
|
|
|
4 |
|
|
||
Cash provided by (used for) operating activities- discontinued operations |
— |
|
|
|
14 |
|
|
||
Cash Provided by (Used for) Operating Activities |
11 |
|
|
|
18 |
|
|
||
|
|
|
|
||||||
Investing Activities: |
|
|
|
||||||
Capital expenditures |
(23 |
) |
|
|
(59 |
) |
|
||
Cash provided by (used for) investing activities-continuing operations |
(23 |
) |
|
|
(59 |
) |
|
||
Cash provided by (used for) investing activities-discontinued operations |
— |
|
|
|
(1 |
) |
|
||
Cash Provided by (Used for) Investing Activities |
(23 |
) |
|
|
(60 |
) |
|
||
|
|
|
|
||||||
Financing Activities: |
|
|
|
||||||
Changes in debt |
— |
|
|
|
44 |
|
|
||
Dividends paid |
— |
|
|
|
(15 |
) |
|
||
Common stock repurchased, net of issuances |
— |
|
|
|
(6 |
) |
|
||
Debt issuance costs |
(3 |
) |
|
|
— |
|
|
||
Cash provided by (used for) financing activities-continuing operations |
(4 |
) |
|
|
23 |
|
|
||
Cash provided by (used for) financing activities-discontinued operations |
— |
|
|
|
— |
|
|
||
Cash Provided by (Used for) Financing Activities |
(4 |
) |
|
|
23 |
|
|
||
|
|
|
|
||||||
Cash and Cash Equivalents: |
|
|
|
||||||
Change in cash and cash equivalents |
(15 |
) |
|
|
(19 |
) |
|
||
Net effect of foreign exchange on cash and cash equivalents |
— |
|
|
|
— |
|
|
||
Balance, beginning of year |
64 |
|
|
|
109 |
|
|
||
Balance, end of period |
$ |
49 |
|
|
|
$ |
90 |
|
|
C |
|
|||||||||||||||||||
|
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
Average Sales Prices: |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose
|
|
|
|
|
|
|
|
|
|
||||||||||
Cellulose Specialties |
$ |
1,309 |
|
|
$ |
1,306 |
|
|
$ |
1,310 |
|
|
$ |
1,307 |
|
|
$ |
1,297 |
|
Commodity Products |
$ |
620 |
|
|
$ |
590 |
|
|
$ |
792 |
|
|
$ |
606 |
|
|
$ |
822 |
|
Forest Products
|
|
|
|
|
|
|
|
|
|
||||||||||
Lumber |
$ |
391 |
|
|
$ |
407 |
|
|
$ |
356 |
|
|
$ |
399 |
|
|
$ |
371 |
|
Paperboard
|
|
|
|
|
|
|
|
|
|
||||||||||
Paperboard |
$ |
1,091 |
|
|
$ |
1,107 |
|
|
$ |
1,117 |
|
|
$ |
1,100 |
|
|
$ |
1,109 |
|
Pulp & Newsprint
|
|
|
|
|
|
|
|
|
|
||||||||||
Pulp |
$ |
493 |
|
|
$ |
463 |
|
|
$ |
539 |
|
|
$ |
478 |
|
|
$ |
555 |
|
Newsprint |
$ |
412 |
|
|
$ |
417 |
|
|
$ |
508 |
|
|
$ |
415 |
|
|
$ |
546 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales Volumes: |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose
|
|
|
|
|
|
|
|
|
|
||||||||||
Cellulose Specialties |
123 |
|
|
123 |
|
|
146 |
|
|
246 |
|
|
295 |
|
|||||
Commodity Products |
122 |
|
�� |
113 |
|
|
71 |
|
|
234 |
|
|
158 |
|
|||||
Forest Products
|
|
|
|
|
|
|
|
|
|
||||||||||
Lumber |
142 |
|
|
149 |
|
|
180 |
|
|
290 |
|
|
328 |
|
|||||
Paperboard
|
|
|
|
|
|
|
|
|
|
||||||||||
Paperboard. |
40 |
|
|
46 |
|
|
45 |
|
|
85 |
|
|
88 |
|
|||||
Pulp & Newsprint
|
|
|
|
|
|
|
|
|
|
||||||||||
Pulp |
53 |
|
|
52 |
|
|
64 |
|
|
105 |
|
|
100 |
|
|||||
Newsprint |
27 |
|
|
40 |
|
|
47 |
|
|
67 |
|
|
85 |
|
|||||
D |
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
EBITDA by Segment (a): |
Three Months Ended |
|||||||||||||||||||||||||||
Forest Products |
|
Paperboard |
|
Pulp & Newsprint |
|
High Purity Cellulose |
|
Corporate & Other |
|
Total |
||||||||||||||||||
Income (loss) from continuing operations |
$ |
(4 |
) |
|
|
$ |
6 |
|
|
|
$ |
(5 |
) |
|
|
$ |
5 |
|
|
$ |
(16 |
) |
|
|
$ |
(13 |
) |
|
Depreciation and amortization |
2 |
|
|
|
4 |
|
|
|
1 |
|
|
|
26 |
|
|
2 |
|
|
|
35 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
16 |
|
|
|
16 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(19 |
) |
|
|
(19 |
) |
|
||||||
EBITDA |
$ |
(2 |
) |
|
|
$ |
10 |
|
|
|
$ |
(4 |
) |
|
|
$ |
31 |
|
|
$ |
(17 |
) |
|
|
$ |
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||||||||||
|
Forest Products |
|
Paperboard |
|
Pulp & Newsprint |
|
High Purity Cellulose |
|
Corporate & Other |
|
Total |
|||||||||||||||||
Income (loss) from continuing operations |
$ |
(16 |
) |
|
|
$ |
1 |
|
|
|
$ |
7 |
|
|
|
$ |
6 |
|
|
$ |
(17 |
) |
|
|
$ |
(19 |
) |
|
Depreciation and amortization |
2 |
|
|
|
4 |
|
|
|
1 |
|
|
|
28 |
|
|
— |
|
|
|
35 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
14 |
|
|
|
14 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(10 |
) |
|
|
(10 |
) |
|
||||||
EBITDA |
(14 |
) |
|
|
5 |
|
|
|
8 |
|
|
|
34 |
|
|
(13 |
) |
|
|
20 |
|
|
||||||
Non-recurring expense |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
1 |
|
|
|
1 |
|
|
||||||
Adjusted EBITDA |
$ |
(14 |
) |
|
|
$ |
5 |
|
|
|
$ |
8 |
|
|
|
$ |
34 |
|
|
$ |
(12 |
) |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
EBITDA by Segment (a): |
Six Months Ended |
|||||||||||||||||||||||||||
Forest Products |
|
Paperboard |
|
Pulp & Newsprint |
|
High Purity Cellulose |
|
Corporate & Other |
|
Total |
||||||||||||||||||
Income (loss) from continuing operations |
$ |
(5 |
) |
|
|
$ |
11 |
|
|
|
$ |
(10 |
) |
|
|
$ |
— |
|
|
$ |
(35 |
) |
|
|
$ |
(38 |
) |
|
Depreciation and amortization |
5 |
|
|
|
8 |
|
|
|
2 |
|
|
|
57 |
|
|
2 |
|
|
|
73 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
31 |
|
|
|
31 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(21 |
) |
|
|
(21 |
) |
|
||||||
EBITDA |
$ |
— |
|
|
|
$ |
19 |
|
|
|
$ |
(8 |
) |
|
|
$ |
57 |
|
|
$ |
(22 |
) |
|
|
$ |
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Six Months Ended |
|||||||||||||||||||||||||||
|
Forest Products |
|
Paperboard |
|
Pulp & Newsprint |
|
High Purity Cellulose |
|
Corporate & Other |
|
Total |
|||||||||||||||||
Income (loss) from continuing operations |
$ |
(22 |
) |
|
|
$ |
(1 |
) |
|
|
$ |
11 |
|
|
|
$ |
2 |
|
|
$ |
(38 |
) |
|
|
$ |
(47 |
) |
|
Depreciation and amortization |
4 |
|
|
|
8 |
|
|
|
2 |
|
|
|
57 |
|
|
— |
|
|
|
71 |
|
|
||||||
Interest expense, net |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
28 |
|
|
|
28 |
|
|
||||||
Income tax expense |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(21 |
) |
|
|
(21 |
) |
|
||||||
EBITDA |
$ |
(18 |
) |
|
|
$ |
7 |
|
|
|
$ |
13 |
|
|
|
$ |
59 |
|
|
$ |
(31 |
) |
|
|
$ |
30 |
|
|
Non-recurring expense |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
1 |
|
|
|
1 |
|
|
||||||
Adjusted EBITDA |
$ |
(18 |
) |
|
|
$ |
7 |
|
|
|
$ |
13 |
|
|
|
$ |
59 |
|
|
$ |
(30 |
) |
|
|
$ |
31 |
|
|
(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 |
|
|||||||||
|
Six Months Ended |
||||||||
Adjusted Free Cash Flows (a): |
2020 |
|
2019 |
||||||
Cash provided by operating activities of continuing operations |
$ |
11 |
|
|
|
$ |
4 |
|
|
Capital expenditures |
(17 |
) |
|
|
(50 |
) |
|
||
Adjusted Free Cash Flows |
$ |
(7 |
) |
|
|
$ |
(46 |
) |
|
(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): |
2020 |
|
2019 |
||||||
Current maturities of long-term debt |
$ |
14 |
|
|
|
$ |
19 |
|
|
Long-term debt & finance lease obligation |
1,061 |
|
|
|
1,063 |
|
|
||
Total debt |
1,075 |
|
|
|
1,082 |
|
|
||
Original issue discount, premiums and debt issuance costs |
8 |
|
|
|
6 |
|
|
||
Cash and cash equivalents |
(49 |
) |
|
|
(64 |
) |
|
||
Adjusted Net Debt |
$ |
1,035 |
|
|
|
$ |
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 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||||||||||||||||||||||||||||
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income (Loss) and Income (Loss) from Continuing Operations (a): |
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
||||||||||||||||||||||||||||||
Operating Income (Loss) |
$ |
(15 |
) |
|
|
|
|
$ |
(12 |
) |
|
|
|
|
$ |
(15 |
) |
|
|
|
|
$ |
(27 |
) |
|
|
|
|
$ |
(43 |
) |
|
|
|
|||||||||||||||
Non-recurring expense (a) |
— |
|
|
|
|
|
— |
|
|
|
|
|
1 |
|
|
|
|
|
— |
|
|
|
|
|
1 |
|
|
|
|
||||||||||||||||||||
Adjusted Operating Income (Loss) |
$ |
(15 |
) |
|
|
|
|
$ |
(12 |
) |
|
|
|
|
$ |
(14 |
) |
|
|
|
|
$ |
(27 |
) |
|
|
|
|
$ |
(42 |
) |
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations |
$ |
(13 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(25 |
) |
|
|
$ |
(0.39 |
) |
|
|
$ |
(19 |
) |
|
|
$ |
(0.46 |
) |
|
|
$ |
(38 |
) |
|
|
$ |
(0.60 |
) |
|
|
$ |
(47 |
) |
|
|
$ |
(1.10 |
) |
|
Non-recurring expense (a) |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.02 |
|
|
||||||||||
Tax effects of adjustments |
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
||||||||||
Adjusted Income (Loss) from Continuing Operations |
$ |
(13 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
(25 |
) |
|
|
$ |
(0.39 |
) |
|
|
$ |
(18 |
) |
|
|
$ |
(0.44 |
) |
|
|
$ |
(38 |
) |
|
|
$ |
(0.60 |
) |
|
|
$ |
(46 |
) |
|
|
$ |
(1.08 |
) |
|
(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. 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. 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/20200804006090/en/
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