Rayonier Advanced Materials (RYAM) Q2 FY26 earnings call: guidance and Q&A

What about RYAM and your experience gives you confidence in unlocking shareholder value, whether through strategic review or stand-alone operation?

CEO Dan Krawczyk stated he was hired to maximize shareholder value by supporting the strategic review and strengthening the business. He joined due to strong end markets, the differentiated Cellulose Specialties platform, tangible operational improvement opportunities, and upside from byproducts (biomaterials). His background aligns with growth, restructuring, and strategic evaluations.

“Why I was hired was to maximize shareholder value by supporting the rigorous strategic review process and continuing to strengthen the business during that process. That ultimately will give us the best flexibility to maximize value for our shareholders.”

asked by Daniel Harriman · answered by Daniel Krawczyk

What should we expect for CS volumes in H2, what does that imply for full-year FCF, and how important is delivering FCF for positioning the company to refinance the 2027 debt?

Marcus Moeltner expects 10-15% improvement in HPC volumes in the back half, carrying good pricing and mix. Positive FCF for the year depends on HPC momentum, paperboard/high-yield pulp performance (new product pipeline), working capital management, and discretionary spending. Delivering FCF is crucial for positioning the business for refinancing the 2027 debt, aiming to drive LTM EBITDA to a level that allows access to public and private markets.

“Our line of sight on volumes for the back half, I think is something in the range of 10% to 15% improvement on volumes and continuing to carry a nice customer and product mix.”

asked by Daniel Harriman · answered by Marcus Moeltner

How do the significant new U.S. tariffs on Brazil and Norway (37.5% on Brazilian DWP, 12.5% on Norwegian DWP) impact the CS market, specifically U.S. acetates, through 2026 and into 2027, and how do they affect RYAM's strategy?

Dan Krawczyk stated that if sustained, these tariffs would provide fairer, more competitive conditions for qualified U.S. suppliers in acetate and other CS applications. The ultimate impact depends on other downstream trade programs and regulatory mechanisms. RYAM believes it will improve the competitiveness of its assets and provide a level playing field.

“If sustained, these actions would provide fair, more competitive conditions for qualified U.S. suppliers, including acetate and other Cellulose Specialty applications.”

asked by Matthew McKellar · answered by Daniel Krawczyk

How are you thinking about potential for churn in CS volumes into the next contract year (2027), given the pricing strategy, and do you expect customers to evaluate alternative supply?

Dan Krawczyk noted that customers always evaluate alternatives, but RYAM offers the broadest range of products and technical expertise. He believes the opportunity is to provide additional stability and certainty through long-range contracts and partnerships. Despite pricing being a focus this year, relationships remain intact, and RYAM aims to solidify them with longer-term agreements.

“While pricing has been a main focus of the discussions this year, we believe that those relationships remain intact. They're decades old in terms of relationships with our primary customers. And we'll -- ultimately, we believe we can solidify those with longer-term agreements.”

asked by Matthew McKellar · answered by Daniel Krawczyk

Can you disclose your share of shipments into the U.S. for paperboard and provide color on options to adapt if the Canadian tariffs take effect?

Dan Krawczyk stated that roughly 75% of RYAM's paperboard volume is sold into the U.S., and these tariffs have the potential to materially impact the business. RYAM is working with policymakers to assess the scope and timing, and developing commercial and operational actions to mitigate negative effects.

“think about roughly about 75% of our volume of paperboard is sold into the U.S.”

asked by Matthew McKellar · answered by Daniel Krawczyk

What is the magnitude of the nitrocellulose opportunity, what products are qualified, and what are you doing to grow in that market?

Dan Krawczyk highlighted RYAM as the sole remaining U.S. supplier of dissolving wood pulp for nitrocellulose, a mission-critical feedstock for defense and energetics. It requires exact purity and performance. RYAM is actively qualifying other grades across facilities to provide supply security and flexibility for the Department of War and NATO.

“RYAM is in a unique position. We remain as the sole remaining U.S. supplier of dissolving wood pulp nitrocellulose applications.”

asked by Dmitry Silversteyn · answered by Daniel Krawczyk

Despite higher production/volumes, the Paperboard and high-yield pulp division has negative EBITDA. What needs to happen to achieve modest profitability?

Dan Krawczyk expects a meaningful step-up in H2, dependent on execution. Key levers are commercializing new high-value products (freezer board, oil/grease resistant board, high-yield wrappers, rolled softwood high-yield pulp). Tighter paperboard market conditions are also providing some lift. The focus is on tracking qualifications and recurring orders for these new products.

“we're looking at a meaningful step-up in the second half of this year. So it's really dependent on execution. And the primary levers of our execution are commercializing our new high-value products and freezer board, oil and grease resistant board as well as the high-yield wrappers and rolled softwood high-yield pulp for absorbent applications.”

asked by Dmitry Silversteyn · answered by Daniel Krawczyk

Was the sequential CS price increase due to mix or higher-priced contracts, and what is the direction for pricing in H2?

Marcus Moeltner stated it was a combination of a greater proportion of higher-value CS products (product mix), some customer mix, and benefits from pricing discussions. He feels good about the H2 outlook with 10-15% volume improvement, good pricing, and nice mix, likely weighted to other CS grades. Dan Krawczyk added that producing more CS grades pushes out more commoditized cellulose commodities, which has a positive effect.

“It was a combination of a couple of things. There's both a greater proportion of our higher-value Cellulose Specialties, so there's definitely that product mix, but there was also some customer mix and then the benefits of the pricing discussions.”

asked by Dmitry Silversteyn · answered by Marcus Moeltner