Aug 03, 2021 4:53 PM
“As expected, second quarter operating results were significantly favorable to both the prior year and sequential quarter,” said
Second Quarter 2021 Operating Results from Continuing Operations
As a result of the announced sale of the Company’s lumber and newsprint assets, the Company operates in the following business segments: High Purity Cellulose, Paperboard, High-Yield Pulp and Corporate.
Net sales comprised the following for the periods presented:
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
Net sales (in millions) |
|
|
|
|
|
|
|
|
|
|||||||||||||||
High Purity Cellulose |
$ |
255 |
|
|
|
$ |
250 |
|
|
|
$ |
255 |
|
|
|
$ |
504 |
|
|
|
$ |
505 |
|
|
Paperboard |
57 |
|
|
|
48 |
|
|
|
43 |
|
|
|
105 |
|
|
|
94 |
|
|
|||||
High-Yield Pulp |
37 |
|
|
|
28 |
|
|
|
32 |
|
|
|
64 |
|
|
|
62 |
|
|
|||||
Eliminations |
(8 |
) |
|
|
(7 |
) |
|
|
(6 |
) |
|
|
(13 |
) |
|
|
(12 |
) |
|
|||||
Total net sales |
$ |
341 |
|
|
|
$ |
319 |
|
|
|
$ |
324 |
|
|
|
$ |
660 |
|
|
|
$ |
649 |
|
|
Operating results comprised the following for the periods presented:
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
Operating income (loss) (in millions) |
|
|
|
|
|
|
|
|
|
|||||||||||||||
High Purity Cellulose |
$ |
11 |
|
|
|
$ |
6 |
|
|
|
$ |
7 |
|
|
|
$ |
17 |
|
|
|
$ |
2 |
|
|
Paperboard |
2 |
|
|
|
6 |
|
|
|
6 |
|
|
|
8 |
|
|
|
11 |
|
|
|||||
High-Yield Pulp |
1 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|||||
Corporate |
(13 |
) |
|
|
(11 |
) |
|
|
(20 |
) |
|
|
(25 |
) |
|
|
(25 |
) |
|
|||||
Total operating income (loss) |
$ |
1 |
|
|
|
$ |
— |
|
|
|
$ |
(6 |
) |
|
|
$ |
1 |
|
|
|
$ |
(12 |
) |
|
High Purity Cellulose
Operating results for the three and six months ended
Compared to the first quarter of 2021, operating income improved by
Paperboard
Operating results for the three and six months ended
Compared to the first quarter of 2021, operating income declined
High-Yield Pulp
Operating income for the three months ended
Operating results improved by
Corporate
The operating loss for the three-month period ended
Compared to the first quarter of 2021, the operating loss increased by
Non-Operating Expenses
Interest expense for the three and six months ended
Interest expense during the three months ended
Income Taxes
For continuing operations, the effective tax rate for the three and six months ended
Discontinued Operations
The Company presents businesses that represent components as discontinued operations when they meet the criteria for held for sale or are sold, and their disposal represents a strategic shift that has, or will have, a major effect on its operations and financial results. As a result of the announced sale of lumber and newsprint assets, the Company is presenting the operations for the Forest Products and Newsprint segments as discontinued operations.
Sale of lumber and newsprint assets
On
The Purchased Assets exclude accounts receivable, accounts payable, certain retained inventory and rights and obligations to softwood lumber duties, generated or incurred through the closing date. Since 2017, the Company has paid a total of
In connection with the transaction, the Company and GreenFirst will enter into a 20-yr wood chip and residual fiber supply agreement as well as a transition services agreement.
Discontinued operations results
Income from discontinued operations, net of taxes, for the three months ended
Income from discontinued operations net of taxes, during the six months ended
The Company currently expects minimal cash taxes to be paid in 2021 or 2022 as a result of 2021 earnings associated with its discontinued operations.
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
Net sales (in millions) |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Forest Products |
$ |
209 |
|
|
|
$ |
147 |
|
|
|
$ |
70 |
|
|
|
$ |
356 |
|
|
|
$ |
153 |
|
|
Newsprint |
13 |
|
|
|
11 |
|
|
|
11 |
|
|
25 |
|
|
|
28 |
|
|
||||||
Eliminations |
(10 |
) |
|
|
(12 |
) |
|
|
(9 |
) |
|
|
(22 |
) |
|
|
(23 |
) |
|
|||||
Total net sales |
$ |
212 |
|
|
|
$ |
146 |
|
|
|
$ |
72 |
|
|
|
$ |
359 |
|
|
|
$ |
158 |
|
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||||||
Operating income (loss) (in millions) |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Forest Products |
$ |
117 |
|
|
|
$ |
61 |
|
|
|
$ |
(4 |
) |
|
|
$ |
178 |
|
|
|
$ |
(5 |
) |
|
Newsprint |
(2 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
|
|
(11 |
) |
|
|||||
Total operating income (loss) |
$ |
115 |
|
|
|
$ |
56 |
|
|
|
$ |
(10 |
) |
|
|
$ |
171 |
|
|
|
$ |
(16 |
) |
|
Forest Products
The operating results for the three-month and six-month periods ended
Compared to the first quarter of 2021, the operating results improved by
Newsprint
Operating results for both the three and six months ended
Compared to the first quarter of 2021, the operating results improved by
Cash Flows & Liquidity
For the six months ended
For the six months ended
The Company ended the quarter with
Market Assessment
The market assessment represents the Company’s best current estimate of each business in this environment.
High Purity Cellulose
Pricing levels for the Company’s commodity products increased significantly during the second quarter and the Company expects this upward trend to continue into the third quarter. Prices for cellulose specialties are in line with expectations for the full year. Cellulose specialties volumes are expected to be well above prior year due to strong demand while total segment volumes will decline slightly for the full year mainly due to the length of extended planned maintenance outages. Volumes for both cellulose specialties and commodity products are expected to increase significantly in the second half of 2021 from first half levels.
Key costs are difficult to predict. Prices for energy, wood and commodity chemicals as well as logistics costs, have continued to increase during the second quarter and are expected to escalate in the back half of the year. Further, logistic and shipping constraints may negatively impact operating and sales results through the end of the year.
With current market conditions, including strong demand for cellulose specialties products, specifically in construction, automotive and plastics end markets, and elevated pricing for commodity viscose and fluff products, the Company believes it is well positioned to maintain or improve cellulose specialties margins in 2022 in spite of inflationary pressures. The Company also remains committed to investing in its core business to reduce costs, improve reliability, optimize performance and provide new platforms for growth.
Paperboard
Paperboard prices continued to increase in the second quarter as expected, due to strong demand in both commercial printing and packaging segments, helping offset increases in raw material costs. Paperboard prices are expected to increase further as demand for the Company’s products continues to strengthen, and additionally supported by industry supply disruptions.
High-Yield Pulp
High-yield pulp markets experienced additional price increases during the second quarter that the Company will recognize in the third quarter due to the typical sales lag. However, pulp market prices are forecasted to decrease later in the year. Logistics constraints and higher costs may negatively impact operating results through the end of the year.
Growing RYAM’s
Upon the completion of the sale of the lumber and newsprint assets, the Company will focus on and invest in leveraging its four high purity cellulose plants to capitalize on the global demand for more sustainable products with its leading cellulose specialties offerings as alternatives for petroleum-based incumbents. Not only are these specialized assets capable of creating the world’s leading plant-based high purity cellulose, they are also ideally suited for generating green fuels, bioelectricity and other biomaterials such as lignins and tall oils. The Company has executed on several high return projects to enhance the value of these assets, including investments in green energy in Tartas,
The Company will seek further opportunities to leverage its core knowledge of creating the remarkable from the renewable to drive incremental value in its
Conclusion
"The second quarter provided strong cash flow for the Company, which combined with the pending sale of our sawmill and newsprint assets, leaves us in a good position to reduce debt and invest in our
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. All statements made in this earnings release are made only as of the date set forth at the beginning of this release. The Company undertakes no obligation to update the information made in this release in the event facts or circumstances subsequently change after the date of this release. The Company has not filed its Form 10-Q for the quarter ended
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 |
|
Six Months Ended |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
$ |
341 |
|
|
|
$ |
319 |
|
|
|
$ |
324 |
|
|
|
$ |
660 |
|
|
|
$ |
649 |
|
|
Cost of Sales |
(319 |
) |
|
|
(298 |
) |
|
|
(301 |
) |
|
|
(617 |
) |
|
|
(618 |
) |
|
|||||
Gross Margin |
22 |
|
|
|
21 |
|
|
|
23 |
|
|
|
43 |
|
|
|
31 |
|
|
|||||
Selling, general & administrative expenses |
(18 |
) |
|
|
(16 |
) |
|
|
(20 |
) |
|
|
(34 |
) |
|
|
(39 |
) |
|
|||||
Foreign exchange gains (losses) |
(2 |
) |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
(3 |
) |
|
|
1 |
|
|
|||||
Other operating income (expense), net |
(1 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
(5 |
) |
|
|||||
Operating Income (Loss) |
1 |
|
|
|
— |
|
|
|
(6 |
) |
|
|
1 |
|
|
|
(12 |
) |
|
|||||
Interest expense |
(16 |
) |
|
|
(16 |
) |
|
|
(14 |
) |
|
|
(32 |
) |
|
|
(27 |
) |
|
|||||
Interest income and other, net |
(2 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|||||
Income (Loss) From Continuing Operations Before Income Taxes |
(17 |
) |
|
|
(16 |
) |
|
|
(21 |
) |
|
|
(32 |
) |
|
|
(40 |
) |
|
|||||
Income tax benefit (expense) |
25 |
|
|
|
— |
|
|
|
17 |
|
|
|
25 |
|
|
|
19 |
|
|
|||||
Equity in income (loss) of equity method investment |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|||||
Income (Loss) from Continuing Operations |
$ |
8 |
|
|
|
(16 |
) |
|
|
$ |
(4 |
) |
|
|
$ |
(8 |
) |
|
|
$ |
(21 |
) |
|
|
Income (loss) from discontinued operations, net of taxes |
114 |
|
|
|
(11 |
) |
|
|
(9 |
) |
|
|
103 |
|
|
|
(16 |
) |
|
|||||
Net Income (Loss) |
$ |
122 |
|
|
|
$ |
(27 |
) |
|
|
$ |
(13 |
) |
|
|
$ |
95 |
|
|
|
$ |
(37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic Earnings Per Common Share: |
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations |
$ |
0.13 |
|
|
|
$ |
(0.26 |
) |
|
|
$ |
(0.05 |
) |
|
|
$ |
(0.12 |
) |
|
|
$ |
(0.34 |
) |
|
Income (loss) from discontinued operations |
1.79 |
|
|
|
(0.17 |
) |
|
|
(0.15 |
) |
|
|
1.62 |
|
|
|
(0.25 |
) |
|
|||||
Net income (loss) per common share - Basic |
$ |
1.92 |
|
|
|
$ |
(0.43 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
1.50 |
|
|
|
$ |
(0.59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Diluted Earnings Per Common Share: |
|
|
|
|
|
|
|
|
||||||||||||||||
Income (loss) from continuing operations |
$ |
0.13 |
|
|
|
$ |
(0.26 |
) |
|
|
$ |
(0.05 |
) |
|
|
$ |
(0.12 |
) |
|
|
$ |
(0.34 |
) |
|
Income (loss) from discontinued operations |
1.76 |
|
|
|
(0.17 |
) |
|
|
(0.15 |
) |
|
|
1.62 |
|
|
|
(0.25 |
) |
|
|||||
Net income (loss) per common share - Diluted |
$ |
1.89 |
|
|
|
$ |
(0.43 |
) |
|
|
$ |
(0.20 |
) |
|
|
$ |
1.50 |
|
|
|
$ |
(0.59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Shares Used for Determining: |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Basic EPS |
63,654,278 |
|
|
|
63,430,601 |
|
|
|
63,235,151 |
|
|
|
63,545,599 |
|
|
|
63,111,058 |
|
|
|||||
Diluted EPS |
64,814,013 |
|
|
|
63,430,601 |
|
|
|
63,235,151 |
|
|
|
63,545,599 |
|
|
|
63,111,058 |
|
|
|||||
A |
Condensed Consolidated Balance Sheets
(millions of dollars) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
215 |
|
|
$ |
94 |
|
Assets of discontinued operations-held for sale, current |
246 |
|
|
73 |
|
||
Other current assets |
500 |
|
|
467 |
|
||
Property, plant and equipment, net |
1,161 |
|
|
1,178 |
|
||
Assets of discontinued operations-held for sale, non-current |
— |
|
|
141 |
|
||
Other assets |
526 |
|
|
577 |
|
||
|
$ |
2,648 |
|
|
$ |
2,530 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Debt due within one year |
$ |
17 |
|
|
$ |
17 |
|
Liabilities of discontinued operations-held for sale, current |
14 |
|
|
1 |
|
||
Other current liabilities |
303 |
|
|
275 |
|
||
Long-term debt and finance lease obligations |
1,064 |
|
|
1,067 |
|
||
Non-current environmental liabilities |
162 |
|
|
163 |
|
||
Liabilities of discontinued operations-held for sale, non-current |
— |
|
|
12 |
|
||
Other non-current liabilities |
301 |
|
|
300 |
|
||
Total stockholders’ equity |
787 |
|
|
695 |
|
||
|
$ |
2,648 |
|
|
$ |
2,530 |
|
B |
Condensed Consolidated Statements of Cash Flows
(millions of dollars) |
|||||||||
|
Six Months Ended |
||||||||
|
|
|
|
||||||
Operating Activities: |
|
|
|
||||||
Net income (loss) |
$ |
95 |
|
|
|
$ |
(37 |
) |
|
Loss (income) from discontinued operations |
(103 |
) |
|
|
16 |
|
|
||
Adjustments: |
|
|
|
||||||
Depreciation and amortization |
66 |
|
|
|
67 |
|
|
||
Other items to reconcile net income to cash provided by operating activities |
(14 |
) |
|
|
13 |
|
|
||
Changes in working capital and other assets and liabilities |
2 |
|
|
|
(36 |
) |
|
||
Cash provided by operating activities- continuing operations |
46 |
|
|
|
23 |
|
|
||
Cash provided by (used for) operating activities- discontinued operations |
140 |
|
|
|
(12 |
) |
|
||
Cash Provided by Operating Activities |
186 |
|
|
|
11 |
|
|
||
|
|
|
|
||||||
Investing Activities: |
|
|
|
||||||
Capital expenditures, net |
(47 |
) |
|
|
(19 |
) |
|
||
Investment in equity method investment |
(4 |
) |
|
|
— |
|
|
||
Cash provided by (used for) investing activities-continuing operations |
(51 |
) |
|
|
(19 |
) |
|
||
Cash provided by (used for) investing activities-discontinued operations |
(6 |
) |
|
|
(4 |
) |
|
||
Cash Provided by (Used for) Investing Activities |
(57 |
) |
|
|
(23 |
) |
|
||
|
|
|
|
||||||
Financing Activities: |
|
|
|
||||||
Changes in debt |
(6 |
) |
|
|
— |
|
|
||
Common stock repurchased, net of issuances |
(1 |
) |
|
|
— |
|
|
||
Debt issuance costs |
(1 |
) |
|
|
(4 |
) |
|
||
Cash Provided by (Used for) Financing Activities |
(8 |
) |
|
|
(4 |
) |
|
||
|
|
|
|
||||||
Cash and Cash Equivalents: |
|
|
|
||||||
Change in cash and cash equivalents |
121 |
|
|
|
(15 |
) |
|
||
Net effect of foreign exchange on cash and cash equivalents |
— |
|
|
|
— |
|
|
||
Balance, beginning of year |
94 |
|
|
|
64 |
|
|
||
Balance, end of period |
$ |
215 |
|
|
|
$ |
49 |
|
|
C |
Sales Volumes and Average Prices
|
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Sales Prices: |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose ($ per metric ton): |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose |
$ |
1,128 |
|
|
$ |
1,046 |
|
|
$ |
966 |
|
|
$ |
1,086 |
|
|
$ |
965 |
|
Paperboard ($ per metric ton): |
|
|
|
|
|
|
|
|
|
||||||||||
Paperboard |
$ |
1,150 |
|
|
$ |
1,111 |
|
|
$ |
1,091 |
|
|
$ |
1,132 |
|
|
$ |
1,100 |
|
High-Yield Pulp ($ per metric ton): |
|
|
|
|
|
|
|
|
|
||||||||||
Pulp (external sales) |
$ |
539 |
|
|
$ |
474 |
|
|
$ |
493 |
|
|
$ |
510 |
|
|
$ |
478 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales Volumes: |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose (thousands of metric tons): |
|
|
|
|
|
|
|
|
|
||||||||||
High Purity Cellulose |
204 |
|
|
217 |
|
|
245 |
|
|
421 |
|
|
480 |
|
|||||
Paperboard (thousands of metric tons): |
|
|
|
|
|
|
|
|
|
||||||||||
Paperboard |
49 |
|
|
43 |
|
|
40 |
|
|
92 |
|
|
85 |
|
|||||
High-Yield Pulp (thousands of metric tons): |
|
|
|
|
|
|
|
|
|
||||||||||
Pulp (external sales) |
55 |
|
|
44 |
|
|
53 |
|
|
99 |
|
|
105 |
|
|||||
D |
Reconciliation of Non-GAAP Measures
|
||||||||||||||||||||
Total EBITDA |
Three Months Ended |
|
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net Income (Loss) |
$ |
122 |
|
|
|
$ |
(13 |
) |
|
|
|
$ |
95 |
|
|
|
$ |
(37 |
) |
|
Depreciation and amortization-continuing operations |
33 |
|
|
|
32 |
|
|
|
|
66 |
|
|
|
67 |
|
|
||||
Depreciation and amortization-discontinued operations |
— |
|
|
|
3 |
|
|
|
|
3 |
|
|
|
6 |
|
|
||||
Interest expense, net-continuing operations |
16 |
|
|
|
14 |
|
|
|
|
32 |
|
|
|
27 |
|
|
||||
Interest expense, net-discontinued operations |
3 |
|
|
|
2 |
|
|
|
|
5 |
|
|
|
4 |
|
|
||||
Income tax expense (benefit) continuing operations |
(25 |
) |
|
|
(17 |
) |
|
|
|
(25 |
) |
|
|
(19 |
) |
|
||||
Income tax expense (benefit)-discontinued operations |
(1 |
) |
|
|
(1 |
) |
|
|
|
63 |
|
|
|
(2 |
) |
|
||||
EBITDA |
$ |
148 |
|
|
|
$ |
20 |
|
|
|
|
$ |
239 |
|
|
|
$ |
46 |
|
|
Pension settlement (gain) loss |
1 |
|
|
|
— |
|
|
|
|
1 |
|
|
|
— |
|
|
||||
Adjusted EBITDA |
$ |
149 |
|
|
|
$ |
20 |
|
|
|
|
$ |
240 |
|
|
|
$ |
46 |
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted Free Cash Flow Reconciliation |
|||||||||
|
|
|
|
||||||
|
Six Months Ended |
||||||||
Adjusted Free Cash Flows (a): |
|
|
|
||||||
Cash provided by operating activities |
$ |
186 |
|
|
|
$ |
11 |
|
|
Capital expenditures, net |
(45 |
) |
|
|
(17 |
) |
|
||
Adjusted Free Cash Flows from Total Operations |
$ |
141 |
|
|
|
$ |
(6 |
) |
|
(a) |
Adjusted free cash flows is defined as cash provided by (used for) operating activities adjusted for capital expenditures, net of proceeds from sale of assets, 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. |
|
E |
EBITDA by Segment (a): |
Three Months Ended |
||||||||||||||||||||
High Purity Cellulose |
|
Paperboard |
|
High-Yield Pulp |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from continuing operations |
$ |
11 |
|
|
$ |
3 |
|
|
$ |
1 |
|
|
$ |
(7 |
) |
|
|
$ |
8 |
|
|
Depreciation and amortization |
27 |
|
|
4 |
|
|
1 |
|
|
1 |
|
|
|
33 |
|
|
|||||
Interest expense, net |
— |
|
|
— |
|
|
— |
|
|
16 |
|
|
|
16 |
|
|
|||||
Income tax expense (benefit) |
— |
|
|
— |
|
|
— |
|
|
(25 |
) |
|
|
(25 |
) |
|
|||||
EBITDA-continuing operations |
$ |
38 |
|
|
$ |
7 |
|
|
$ |
2 |
|
|
$ |
(15 |
) |
|
|
$ |
32 |
|
|
Pension settlement (gain) loss |
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
|
1 |
|
|
|||||
Adjusted EBITDA-continuing operations |
$ |
38 |
|
|
$ |
7 |
|
|
$ |
2 |
|
|
$ |
(14 |
) |
|
|
$ |
33 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA by Segment (a): |
Three Months Ended |
||||||||||||||||||||
High Purity Cellulose |
|
Paperboard |
|
High-Yield Pulp |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from continuing operations |
$ |
7 |
|
|
$ |
6 |
|
|
$ |
— |
|
|
$ |
(29 |
) |
|
|
$ |
(16 |
) |
|
Depreciation and amortization |
28 |
|
|
4 |
|
|
— |
|
|
1 |
|
|
|
33 |
|
|
|||||
Interest expense, net |
— |
|
|
— |
|
|
— |
|
|
15 |
|
|
|
15 |
|
|
|||||
Income tax expense (benefit) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|||||
EBITDA-continuing operations |
$ |
35 |
|
|
$ |
10 |
|
|
$ |
— |
|
|
$ |
(13 |
) |
|
|
$ |
32 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended |
||||||||||||||||||||
|
High Purity Cellulose |
|
Paperboard |
|
High-Yield Pulp |
|
Corporate & Other |
|
Total |
||||||||||||
Income (loss) from continuing operations |
$ |
5 |
|
|
$ |
6 |
|
|
$ |
1 |
|
|
$ |
(16 |
) |
|
|
$ |
(4 |
) |
|
Depreciation and amortization |
26 |
|
|
4 |
|
|
1 |
|
|
1 |
|
|
|
32 |
|
|
|||||
Interest expense, net |
— |
|
|
— |
|
|
— |
|
|
14 |
|
|
|
14 |
|
|
|||||
Income tax expense (benefit) |
— |
|
|
— |
|
|
— |
|
|
(17 |
) |
|
|
(17 |
) |
|
|||||
EBITDA-continuing operations |
$ |
31 |
|
|
$ |
10 |
|
|
$ |
2 |
|
|
$ |
(18 |
) |
|
|
$ |
25 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA by Segment (a): |
Six Months Ended |
||||||||||||||||||||
High Purity Cellulose |
|
Paperboard |
|
High-Yield Pulp |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from continuing operations |
$ |
18 |
|
|
$ |
9 |
|
|
$ |
1 |
|
|
$ |
(36 |
) |
|
|
$ |
(8 |
) |
|
Depreciation and amortization |
55 |
|
|
8 |
|
|
1 |
|
|
2 |
|
|
|
66 |
|
|
|||||
Interest expense, net |
— |
|
|
— |
|
|
— |
|
|
32 |
|
|
|
32 |
|
|
|||||
Income tax expense (benefit) |
— |
|
|
— |
|
|
— |
|
|
(25 |
) |
|
|
(25 |
) |
|
|||||
EBITDA-continuing operations |
$ |
73 |
|
|
$ |
17 |
|
|
$ |
2 |
|
|
$ |
(27 |
) |
|
|
$ |
65 |
|
|
Pension settlement (gain) loss |
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
|
1 |
|
|
|||||
Adjusted EBITDA-continuing operations |
$ |
73 |
|
|
$ |
17 |
|
|
$ |
2 |
|
|
$ |
(26 |
) |
|
|
$ |
66 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended |
||||||||||||||||||||
|
High Purity Cellulose |
|
Paperboard |
|
High-Yield Pulp |
|
Corporate & Other |
|
Total |
||||||||||||
Income (loss) from continuing operations |
$ |
— |
|
|
$ |
11 |
|
|
$ |
— |
|
|
$ |
(32 |
) |
|
|
$ |
(21 |
) |
|
Depreciation and amortization |
57 |
|
|
8 |
|
|
1 |
|
|
1 |
|
|
|
67 |
|
|
|||||
Interest expense, net |
— |
|
|
— |
|
|
— |
|
|
27 |
|
|
|
27 |
|
|
|||||
Income tax expense (benefit) |
— |
|
|
— |
|
|
— |
|
|
(19 |
) |
|
|
(19 |
) |
|
|||||
EBITDA-continuing operations |
$ |
57 |
|
|
$ |
19 |
|
|
$ |
1 |
|
|
$ |
(23 |
) |
|
|
$ |
54 |
|
|
(a) |
EBITDA- continuing operations 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. |
|
G |
Reconciliation of Non-GAAP Measures (Continued)
(millions of dollars, except per share information) |
|||||||||
|
Six Months Ended |
||||||||
Adjusted Free Cash Flows - continuing operations (a): |
|
|
|
||||||
Cash provided by operating activities of continuing operations |
$ |
46 |
|
|
|
$ |
23 |
|
|
Capital expenditures, net |
(43 |
) |
|
|
(15 |
) |
|
||
Adjusted Free Cash Flows-continuing operations |
$ |
3 |
|
|
|
$ |
8 |
|
|
(a) |
Adjusted free cash flows-continuing operations is defined as cash provided by (used for) operating activities from continuing operations adjusted for capital expenditures, net of proceeds from sale of assets, 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): |
|
|
|
||||||
Debt due within one year |
$ |
17 |
|
|
|
$ |
17 |
|
|
Long-term debt & finance lease obligation |
1,064 |
|
|
|
1,067 |
|
|
||
Total debt |
1,081 |
|
|
|
1,084 |
|
|
||
Original issue discount, premiums and debt issuance costs |
11 |
|
|
|
11 |
|
|
||
Cash and cash equivalents |
(215 |
) |
|
|
(94 |
) |
|
||
Adjusted Net Debt |
$ |
877 |
|
|
|
$ |
1,001 |
|
|
(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. |
|
H |
Reconciliation of Non-GAAP Measures (Continued)
(millions of dollars, except per share information) |
|||||||||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||
Adjusted Income (Loss) from Continuing Operations (a): |
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
|
$ |
|
Per Diluted Share |
||||||||||||||||||||||||||||
Income (Loss) from Continuing Operations |
$ |
8 |
|
|
$ |
0.13 |
|
|
$ |
(16 |
) |
|
|
$ |
(0.26 |
) |
|
|
$ |
(4 |
) |
|
|
$ |
(0.05 |
) |
|
|
$ |
(8 |
) |
|
|
$ |
(0.12 |
) |
|
|
$ |
(21 |
) |
|
|
$ |
(0.34 |
) |
|
Pension settlement loss |
1 |
|
|
0.01 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
||||||||||
Tax effects of adjustments |
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
$ |
— |
|
|
|||||||||
Adjusted Income (Loss) from Continuing Operations |
$ |
9 |
|
|
$ |
0.14 |
|
|
$ |
(16 |
) |
|
|
$ |
(0.26 |
) |
|
|
$ |
(4 |
) |
|
|
$ |
(0.05 |
) |
|
|
$ |
(7 |
) |
|
|
$ |
(0.11 |
) |
|
|
$ |
(21 |
) |
|
|
$ |
(0.34 |
) |
|
(a) |
Adjusted income (loss) from Continuing Operations is defined as net income (loss) from Continuing Operations adjusted net of tax for a settlement of certain pension plans. Adjusted net income (loss) is not necessarily indicative of results that may be generated in future periods. |
|
I |
Discontinued Operations EBITDA Reconciliation - Forest Products and Newsprint |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA by Discontinued Segment: |
Three Months Ended |
|||||||||||||||||||
|
Forest Products |
|
Newsprint |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from discontinued operations |
|
$ |
118 |
|
|
|
$ |
(1 |
) |
|
|
$ |
(3 |
) |
|
|
$ |
114 |
|
|
Depreciation and amortization |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
||||
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
3 |
|
|
||||
Income tax expense (benefit) |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
||||
EBITDA from discontinued operations |
|
$ |
118 |
|
|
|
$ |
(1 |
) |
|
|
$ |
(1 |
) |
|
|
$ |
116 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA by Discontinued Segment: |
Three Months Ended |
|||||||||||||||||||
|
Forest Products |
|
Newsprint |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from discontinued operations |
|
$ |
61 |
|
|
|
$ |
(4 |
) |
|
|
$ |
(68 |
) |
|
|
$ |
(11 |
) |
|
Depreciation and amortization |
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
||||
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
|
||||
Income tax expense (benefit) |
|
— |
|
|
|
— |
|
|
|
64 |
|
|
|
64 |
|
|
||||
EBITDA from discontinued operations |
|
$ |
64 |
|
|
|
$ |
(4 |
) |
|
|
$ |
(2 |
) |
|
|
$ |
58 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA by Discontinued Segment: |
Three Months Ended |
|||||||||||||||||||
|
Forest Products |
|
Newsprint |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from discontinued operations |
|
$ |
(3 |
) |
|
|
$ |
(5 |
) |
|
|
$ |
(1 |
) |
|
|
$ |
(9 |
) |
|
Depreciation and amortization |
|
2 |
|
|
|
1 |
|
|
|
— |
|
|
|
3 |
|
|
||||
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
2 |
|
|
|
2 |
|
|
||||
Income tax expense (benefit) |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
||||
EBITDA from discontinued operations |
|
$ |
(1 |
) |
|
|
$ |
(4 |
) |
|
|
$ |
— |
|
|
|
$ |
(5 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA by Discontinued Segment: |
Six Months Ended |
|||||||||||||||||||
|
Forest Products |
|
Newsprint |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from discontinued operations |
|
$ |
179 |
|
|
|
$ |
(5 |
) |
|
|
$ |
(71 |
) |
|
|
$ |
103 |
|
|
Depreciation and amortization |
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
||||
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
5 |
|
|
|
5 |
|
|
||||
Income tax expense (benefit) |
|
— |
|
|
|
— |
|
|
|
63 |
|
|
|
63 |
|
|
||||
EBITDA from discontinued operations |
|
$ |
182 |
|
|
|
$ |
(5 |
) |
|
|
$ |
(3 |
) |
|
|
$ |
174 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA by Discontinued Segment: |
Six Months Ended |
|||||||||||||||||||
|
Forest Products |
|
Newsprint |
|
Corporate & Other |
|
Total |
|||||||||||||
Income (loss) from discontinued operations |
|
$ |
(3 |
) |
|
|
$ |
(9 |
) |
|
|
$ |
(3 |
) |
|
|
$ |
(15 |
) |
|
Depreciation and amortization |
|
5 |
|
|
|
1 |
|
|
|
— |
|
|
|
6 |
|
|
||||
Interest expense, net |
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
4 |
|
|
||||
Income tax expense (benefit) |
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
||||
EBITDA from discontinued operations |
|
$ |
2 |
|
|
|
$ |
(8 |
) |
|
|
$ |
(1 |
) |
|
|
$ |
(7 |
) |
|
J |
Discontinued Operations Adjusted Free Cash Flow Reconciliation |
|||||||||
|
|
|
|
||||||
|
Six Months Ended |
||||||||
Adjusted Free Cash Flows from Discontinued Operations (a): |
|
|
|
||||||
Cash provided by operating activities of discontinued operations |
$ |
140 |
|
|
|
$ |
(12 |
) |
|
Capital expenditures, net, for discontinued operations |
(2 |
) |
|
|
(2 |
) |
|
||
Adjusted Free Cash Flows from Discontinued Operations |
$ |
138 |
|
|
|
$ |
(14 |
) |
|
(a) |
Adjusted free cash flows from discontinued operations is defined as cash provided by (used for) operating activities from discontinued operations adjusted for capital expenditures, net of proceeds from sale of assets, excluding strategic capital, all solely related to discontinued operations. Adjusted free cash flows for discontinued operations 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 for discontinued operations is not necessarily indicative of the adjusted free cash flows that may be generated by these operations in future periods. |
Discontinued Operations - Sales Volumes and Average Prices |
|||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Sales Prices: |
|
|
|
|
|
|
|
|
|
||||||||||
Forest Products ($ per thousand board feet): |
|
|
|
|
|
|
|
|
|
||||||||||
Lumber |
$ |
1,223 |
|
|
$ |
888 |
|
|
$ |
391 |
|
|
$ |
1,062 |
|
|
$ |
399 |
|
Newsprint ($ per metric ton): |
|
|
|
|
|
|
|
|
|
||||||||||
Newsprint |
$ |
529 |
|
|
$ |
468 |
|
|
$ |
412 |
|
|
$ |
499 |
|
|
$ |
415 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales Volumes: |
|
|
|
|
|
|
|
|
|
||||||||||
Forest Products (millions of board feet): |
|
|
|
|
|
|
|
|
|
||||||||||
Lumber |
156 |
|
144 |
|
142 |
|
300 |
|
290 |
||||||||||
Newsprint (thousands of metric tons): |
|
|
|
|
|
|
|
|
|
||||||||||
Newsprint |
25 |
|
25 |
|
27 |
|
50 |
|
67 |
||||||||||
K |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210803006098/en/
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