o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
|
|
|
PAGE
|
|
Item 2.02.
|
|
|
1
|
|
|
Item 9.01.
|
|
|
1
|
|
|
|
|
|
2
|
|
|
|
|
|
3
|
|
ITEM 2.02.
|
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|
ITEM 9.01.
|
FINANCIAL STATEMENTS AND EXHIBITS
|
(d)
|
Exhibits.
|
99.1
|
|
|
Press release dated October 29, 2014.
|
|
|
RAYONIER ADVANCED MATERIALS INC. (Registrant)
|
|
|
|
BY:
|
|
/s/ BENSON K. WOO
|
|
|
Benson K. Woo
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
EXHIBIT NO.
|
|
DESCRIPTION
|
|
LOCATION
|
99.1
|
|
Press release dated October 29, 2014.
|
|
Furnished herewith
|
Contacts:
|
|
|
Media
|
Russell Schweiss
|
904-357-9158
|
Investors
|
Beth Johnson
|
904-357-9136
|
•
|
Reaffirms Full Year Guidance
|
•
|
Extends Significant Customer Contract
|
•
|
Focuses on Initiatives that Drive Growth and Profitability
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
September 27,
|
|
June 28,
|
|
September 30,
|
|
September 27,
|
|
September 30,
|
||||||||||
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||
NET SALES
|
|
|
|
|
|
|
|
|
|
||||||||||
Cellulose specialties
|
222.6
|
|
|
200.7
|
|
|
200.1
|
|
|
629.7
|
|
|
680.1
|
|
|||||
Absorbent materials
|
18.5
|
|
|
0.2
|
|
|
9.0
|
|
|
28.9
|
|
|
66.2
|
|
|||||
Commodity viscose and other
|
12.6
|
|
|
11.6
|
|
|
16.4
|
|
|
51.1
|
|
|
18.6
|
|
|||||
Total net sales
|
$
|
253.7
|
|
|
$
|
212.5
|
|
|
$
|
225.5
|
|
|
$
|
709.7
|
|
|
$
|
764.9
|
|
COST OF SALES
|
198.0
|
|
|
160.2
|
|
|
158.1
|
|
|
546.9
|
|
|
515.8
|
|
|||||
GROSS MARGIN
|
55.7
|
|
|
52.3
|
|
|
67.4
|
|
|
162.8
|
|
|
249.1
|
|
|||||
Selling and general expenses
|
9.5
|
|
|
9.0
|
|
|
8.1
|
|
|
26.7
|
|
|
26.9
|
|
|||||
Other operating expense (income), net (a)
|
4.5
|
|
|
37.1
|
|
|
(0.1
|
)
|
|
44.8
|
|
|
3.8
|
|
|||||
OPERATING INCOME
|
41.7
|
|
|
6.2
|
|
|
59.4
|
|
|
91.3
|
|
|
218.4
|
|
|||||
Interest (expense) income, net
|
(9.6
|
)
|
|
(3.2
|
)
|
|
0.3
|
|
|
(12.8
|
)
|
|
0.3
|
|
|||||
INCOME BEFORE INCOME TAXES
|
32.1
|
|
|
3.0
|
|
|
59.7
|
|
|
78.5
|
|
|
218.7
|
|
|||||
Income tax (expense) benefit (b)
|
(12.7
|
)
|
|
1.6
|
|
|
(19.7
|
)
|
|
(23.6
|
)
|
|
(49.7
|
)
|
|||||
NET INCOME
|
19.4
|
|
|
4.6
|
|
|
40.0
|
|
|
54.9
|
|
|
169.0
|
|
|||||
EARNINGS PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
||||||||||
BASIC EARNINGS PER SHARE
|
$
|
0.46
|
|
|
$
|
0.11
|
|
|
$
|
0.95
|
|
|
$
|
1.30
|
|
|
$
|
4.01
|
|
DILUTED EARNINGS PER SHARE
|
$
|
0.46
|
|
|
$
|
0.11
|
|
|
$
|
0.95
|
|
|
$
|
1.30
|
|
|
$
|
4.01
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pro forma net income per share (c)
|
$
|
0.53
|
|
|
$
|
0.59
|
|
|
$
|
0.95
|
|
|
$
|
1.90
|
|
|
$
|
3.61
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted Average Common
|
|
|
|
|
|
|
|
|
|
||||||||||
Shares used for determining
(d)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic EPS
|
42,167,014
|
|
|
42,176,565
|
|
|
42,176,565
|
|
|
42,160,559
|
|
|
42,176,565
|
|
|||||
Diluted EPS
|
42,247,970
|
|
|
42,178,462
|
|
|
42,176,565
|
|
|
42,240,448
|
|
|
42,176,565
|
|
(d)
|
On June 27, 2014, 42,176,565 shares of our common stock were distributed to Rayonier Inc. stockholders in conjunction with the separation. For comparative purposes, we have assumed this amount to be outstanding as of the beginning of each period prior to the separation in the calculation of Basic Earnings Per Share.
|
|
|
|||||||
|
|
September 27,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
28.2
|
|
|
$
|
—
|
|
Other current assets
|
|
270.4
|
|
|
246.1
|
|
||
Property, plant and equipment, net
|
|
844.4
|
|
|
846.3
|
|
||
Other assets
|
|
103.3
|
|
|
27.9
|
|
||
|
|
$
|
1,246.3
|
|
|
$
|
1,120.3
|
|
Liabilities and Stockholders' (Deficit) Equity
|
|
|
|
|
||||
Current maturities of long-term debt
|
|
$
|
8.4
|
|
|
$
|
—
|
|
Other current liabilities
|
|
122.9
|
|
|
79.8
|
|
||
Long-term debt
|
|
938.5
|
|
|
—
|
|
||
Non-current liabilities for disposed operations
|
|
84.2
|
|
|
—
|
|
||
Other non-current liabilities
|
|
105.7
|
|
|
72.2
|
|
||
Total stockholders' (deficit) equity
|
|
(13.4
|
)
|
|
968.3
|
|
||
|
|
$
|
1,246.3
|
|
|
$
|
1,120.3
|
|
|
|
|
||||||
|
|
Nine Months Ended
|
||||||
|
|
September 27, 2014
|
|
September 30, 2013
|
||||
Cash provided by operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
54.9
|
|
|
$
|
169.0
|
|
Depreciation and amortization
|
|
62.1
|
|
|
51.1
|
|
||
Other items to reconcile net income to cash provided by operating activities
|
|
33.6
|
|
|
(0.2
|
)
|
||
Changes in working capital and other assets and liabilities
|
|
(22.9
|
)
|
|
(31.1
|
)
|
||
|
|
127.7
|
|
|
188.8
|
|
||
Cash used for investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(60.2
|
)
|
|
(81.5
|
)
|
||
Jesup plant cellulose specialties expansion
|
|
—
|
|
|
(137.4
|
)
|
||
Other
|
|
(15.6
|
)
|
|
(1.4
|
)
|
||
|
|
(75.8
|
)
|
|
(220.3
|
)
|
||
Cash (used for) provided by financing activities:
|
|
|
|
|
||||
Changes in debt, net of issuance costs
|
|
932.5
|
|
|
—
|
|
||
Proceeds from the issuance of common stock
|
|
0.5
|
|
|
—
|
|
||
Common stock repurchased
|
|
(0.1
|
)
|
|
—
|
|
||
Net payments from (to) Parent
|
|
(956.6
|
)
|
|
31.5
|
|
||
|
|
(23.7
|
)
|
|
31.5
|
|
||
Cash and cash equivalents:
|
|
|
|
|
||||
Change in cash and cash equivalents
|
|
28.2
|
|
|
—
|
|
||
Balance, beginning of year
|
|
—
|
|
|
—
|
|
||
Balance, end of period
|
|
$
|
28.2
|
|
|
$
|
—
|
|
EBITDA (a):
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 27, 2014
|
|
September 30, 2013
|
|
September 27, 2014
|
|
September 30, 2013
|
||||||||
Net income
|
|
$
|
19.4
|
|
|
$
|
40.0
|
|
|
$
|
54.9
|
|
|
$
|
169.0
|
|
Depreciation and amortization
|
|
23.9
|
|
|
22.3
|
|
|
62.1
|
|
|
51.1
|
|
||||
Interest, net
|
|
9.6
|
|
|
(0.3
|
)
|
|
12.8
|
|
|
(0.3
|
)
|
||||
Income tax expense
|
|
12.7
|
|
|
19.7
|
|
|
23.6
|
|
|
49.7
|
|
||||
EBITDA
|
|
$
|
65.6
|
|
|
$
|
81.7
|
|
|
$
|
153.4
|
|
|
$
|
269.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
One-time separation and legal costs
|
|
2.8
|
|
|
(0.2
|
)
|
|
41.9
|
|
|
2.8
|
|
||||
Environmental reserve adjustment
|
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||
Pro forma EBITDA
|
|
$
|
69.9
|
|
|
$
|
81.5
|
|
|
$
|
196.8
|
|
|
$
|
272.3
|
|
Corporate costs
|
|
6.1
|
|
|
3.5
|
|
|
14.0
|
|
|
12.5
|
|
||||
Segment EBITDA
|
|
$
|
76.0
|
|
|
$
|
85.0
|
|
|
$
|
210.8
|
|
|
$
|
284.8
|
|
ADJUSTED FREE CASH FLOW (b):
|
|
Nine Months Ended
|
||||||
|
|
September 27, 2014
|
|
September 30, 2013
|
||||
Cash provided by operating activities
|
|
$
|
127.7
|
|
|
$
|
188.8
|
|
Capital expenditures (c)
|
|
(60.2
|
)
|
|
(81.5
|
)
|
||
Tax benefit due to exchange of AFMC for CBPC
|
|
—
|
|
|
(19.0
|
)
|
||
Adjusted Free Cash Flow
|
|
$
|
67.5
|
|
|
$
|
88.3
|
|
PRO FORMA OPERATING INCOME AND NET INCOME (d):
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||||||||||
|
September 27, 2014
|
|
June 28, 2014
|
|
September 30, 2013
|
|
September 27, 2014
|
|
September 30, 2013
|
||||||||||||||||||||||||||||||
|
$
|
|
Per Diluted Share
|
|
$
|
|
Per Diluted Share
|
|
$
|
|
Per Diluted Share
|
|
$
|
|
Per Diluted Share
|
|
$
|
|
Per Diluted Share
|
||||||||||||||||||||
Operating income
|
$
|
41.7
|
|
|
|
|
|
$
|
6.2
|
|
|
|
|
$
|
59.4
|
|
|
|
|
$
|
91.3
|
|
|
|
|
$
|
218.4
|
|
|
|
|||||||||
One-time separation and legal costs
|
2.8
|
|
|
|
|
|
36.3
|
|
|
|
|
(0.2
|
)
|
|
|
|
41.9
|
|
|
|
|
2.8
|
|
|
|
||||||||||||||
Environmental reserve adjustment
|
1.5
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1.5
|
|
|
|
|
—
|
|
|
|
|||||||||||||||
Pro forma operating income
|
$
|
46.0
|
|
|
|
|
|
$
|
42.5
|
|
|
|
|
$
|
59.2
|
|
|
|
|
$
|
134.7
|
|
|
|
|
$
|
221.2
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net income
|
$
|
19.4
|
|
|
$
|
0.46
|
|
|
$
|
4.6
|
|
|
$
|
0.11
|
|
|
$
|
40.0
|
|
|
$
|
0.95
|
|
|
$
|
54.9
|
|
|
$
|
1.30
|
|
|
$
|
169.0
|
|
|
$
|
4.01
|
|
One-time separation and legal costs, net of tax
|
2.0
|
|
|
0.04
|
|
|
25.0
|
|
|
0.59
|
|
|
—
|
|
|
—
|
|
|
29.0
|
|
|
0.68
|
|
|
1.9
|
|
|
0.05
|
|
||||||||||
Environmental reserve adjustment, net of tax
|
1.0
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
||||||||||
Reversal of reserve related to the taxability of the CBPC
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
(0.11
|
)
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
(0.11
|
)
|
|
—
|
|
|
—
|
|
||||||||||
Tax benefit due to exchange of AFMC for CBPC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19.0
|
)
|
|
(0.45
|
)
|
||||||||||
Pro forma net income
|
$
|
22.4
|
|
|
$
|
0.53
|
|
|
$
|
24.8
|
|
|
$
|
0.59
|
|
|
$
|
40.0
|
|
|
$
|
0.95
|
|
|
$
|
80.1
|
|
|
$
|
1.90
|
|
|
$
|
151.9
|
|
|
$
|
3.61
|
|