Rayonier Advanced Materials Reports 8% Revenue Decline and $31.97 Million Net Loss in Q1 2025

Rayonier Advanced Materials Inc. reported a significant decline in financial performance for the first quarter of 2025, with net sales totaling $355.97 million, down 8% from $387.66 million in the same period last year. The company experienced a net loss of $31.97 million, or $0.49 per share, compared to a loss of $1.57 million, or $0.02 per share, in the prior year. The decrease in revenue was attributed to lower sales prices in the Paperboard and High-Yield Pulp segments, as well as reduced sales volumes across all segments, despite some price increases in Cellulose Specialties and Cellulose Commodities.

The company's gross margin also contracted, falling to $24.05 million from $36.76 million a year earlier, reflecting a gross margin percentage of 6.7%, down from 9.5%. Operating income turned negative, with a loss of $15.09 million compared to an operating income of $17.08 million in the previous year. Contributing factors to this decline included higher input costs, operational challenges, and non-cash environmental reserve charges of $12 million related to remediation efforts at various sites.

In terms of strategic developments, Rayonier Advanced Materials reorganized its High Purity Cellulose operating segment into three distinct businesses: Cellulose Specialties, Cellulose Commodities, and Biomaterials. This restructuring aims to enhance management and operational efficiency. The company also continues to explore the potential sale of its Paperboard and High-Yield Pulp assets at the Temiscaming site, although the process is currently on hold due to global trade uncertainties.

Operationally, Rayonier reported a total of 66,774,538 shares of common stock outstanding as of May 5, 2025. The company’s cash and cash equivalents increased slightly to $129.86 million from $125.22 million at the end of the previous fiscal year. The company’s total debt rose to $736.03 million, up from $730 million, while stockholders' equity decreased to $688.08 million from $713.89 million. The company remains focused on managing its liquidity and capital resources, with cash flows from operations being a primary source of funding.

Looking ahead, Rayonier anticipates that average sales prices for Cellulose Specialties will increase by a mid-single-digit percentage in 2025, although sales volumes are expected to decline due to the absence of bridge volumes following the indefinite suspension of operations at the Temiscaming plant. The company is also evaluating investments in new green energy and renewable products to diversify its market offerings and enhance profitability. Overall, the company is navigating a challenging market environment while implementing strategic changes to improve its operational framework.