Rayonier Advanced Materials Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated net sales were $383 million for the quarter, up 8% from $353 million in the prior year quarter and up 2% from $376 million in the prior quarter.
• Loss from continuing operations was $229 million ($3.40 per diluted share), compared to a loss of $4 million ($0.07 per diluted share) in the prior year quarter; this loss included $221 million in non-cash impairments.
• Adjusted EBITDA was $52 million, representing a 30% sequential increase from $40 million in the prior quarter and a 24% increase from $42 million in the prior year quarter.
• High Purity Cellulose (HPC) segment reported operating income of $43 million, up from $38 million in the prior year quarter and $29 million in the prior quarter.
• Paperboard & High Yield Pulp segment reported an operating loss of $224 million, driven by $210 million in non-cash asset impairments, compared to a loss of $14 million in the prior year quarter and $27 million in the prior quarter.
• Year-to-date cash flow from operating activities was $66 million, and Adjusted Free Cash Flow was $2 million.
• Consolidated net secured leverage ratio was 4.0 times as of September 26, 2026.
• Global liquidity ended the quarter at $143 million, including $61 million in cash, $66 million of borrowing capacity under the ABL Credit Facility, and $16 million of availability under the France factoring facility.

Guidance and Future Outlook:

• The Company targets a conclusion to its strategic review in the first quarter of 2027.
• The strategic review process has been slowed by tariff-related uncertainty at the Temiscaming site.
• Estimated site carrying costs for the idled Temiscaming operations are $2 million to $3 million per month.
• Construction is underway on the Altamaha Green Energy project at Jesup.

Business Segments and Product Lines:

• High Purity Cellulose:
  • Net sales increased 6% year-over-year to $313 million, driven by a 10% increase in total cellulose sales volume.
  • Cellulose Specialties (CS) sales volume decreased 18% year-over-year, while Cellulose Commodities (CC) sales volume increased 42%.
  • CS average sales price increased 19% year-over-year to $2,227 per metric ton; CC average sales price decreased 8% to $825 per metric ton.
  • Total cellulose shipments increased 4% sequentially.
  • Operating income drivers included lower wood, logistics, and maintenance costs, plus a $3 million insurance recovery related to the 2024 Jesup plant fire.
• Paperboard & High Yield Pulp:
  • Net sales increased 23% year-over-year to $70 million, driven by a 26% increase in total sales volume.
  • Paperboard (PBD) sales volume increased 29% and High Yield Pulp (HYP) sales volume increased 23% year-over-year.
  • Total average sales price decreased 2% year-over-year due to product mix.
  • Operations at the Temiscaming site were economically idled on October 3, 2026, due to a 50% U.S. tariff on Canadian paperboard effective August 22, 2026.
  • The segment incurred $2 million in tariff-related costs during the quarter.

Market and Competitive Landscape:

• Global commodity pricing for cellulose was softer, impacting CC average sales prices.
• Demand for CS products was weaker in ethers and other end uses.
• HYP demand increased in Asia for maple grade, offset by supply challenges from Indonesia due to forestry practice concerns.
• The Company faces risks from geopolitical instability, trade barriers, and fluctuations in raw material and energy prices.

Risks and Challenges:

• The 50% U.S. tariff on Canadian paperboard rendered Temiscaming production uneconomic, leading to an economic idling of operations.
• Significant non-cash asset impairments of $210 million in the Paperboard & High Yield Pulp segment impacted reported earnings.
• The Company's ten largest customers represented a significant portion of 2025 revenue.
• Risks include potential disruptions at manufacturing plants, unfavorable changes in wood fiber availability and pricing, and foreign currency exchange fluctuations.
• The Company has a net secured leverage ratio of 4.0 times, which could impair its ability to operate if covenants are breached.

Management Commentary and Tone:

• CEO Dan Krawczyk described the quarter as "strong in HPC" with higher earnings and positive cash generation, noting that commodity production mix currently masks the full value of the Cellulose Specialties franchise.
• Management emphasized that shifting production mix toward Cellulose Specialties is a "clear and urgent priority" to capture product value.
• The Company is actively providing information to interested parties regarding the strategic review and discussing alternatives to strengthen the CS franchise.
• Management stated the mandate is to maximize shareholder value while managing site costs at Temiscaming.

Other Key Points:

• The Company reorganized its segment structure in January 2026, combining Cellulose Specialties, Cellulose Commodities, and Biomaterials into the High Purity Cellulose segment, and Paperboard and High Yield Pulp into the Paperboard & High Yield Pulp segment.
• A $3 million insurance recovery was recognized in the HPC segment related to the 2024 Jesup plant fire.
• The Company paid $2 million in tariff-related costs on Canadian paperboard during the third quarter.
• Year-to-date Adjusted Free Cash Flow improved by $10 million from the first-half result.
• The Company has not yet filed its Form 10-Q for the quarter ended September 26, 2026, and results are considered preliminary.