Rayonier Advanced Materials (NYSE: RYAM) reported Q3 EPS of ($0.29), $0.11 worse than the analyst estimate of ($0.18). Revenue for the quarter came in at $416 million versus the consensus estimate of $470.57 million.

• Financial improvement from prior quarter due to greater reliability and reduced costs
• Successfully negotiated covenant package in September 2019 to provide flexibility to navigate challenging markets
• Executing Cellulose Specialties Go-to-Market strategy to improve margins; Price increases announced on Cellulose Specialties products in October 2019 or as contracts allow
• Net proceeds of approximately $150 million received from the sale of Matane high-yield manufacturing facility in November 2019

“The increased EBITDA over prior quarters demonstrates the progress we are making on our initiatives to overcome these difficult market conditions. Price declines in commodity segments alone accounted for a $97 million decline in operating income,” said Paul Boynton, Chairman, President and Chief Executive Officer. “With our immediate covenant issue resolved as a result of our loan amendment, we are focused on lowering costs, managing working capital and reducing capital expenditures to generate cash and improve our balance sheet.”

Conclusion

“With our initiatives to lower costs and improve cash flows and liquidity, combined with the completion of our loan amendment and the sale of Matane, we are taking aggressive action to manage the current challenging market conditions,” added Boynton. “We are focused on increasing price and margins through our Go-to-Market strategy, reducing costs with our Strategic Pillars and reducing earnings volatility as we conclude our Portfolio Evaluation process. We believe our short-term efforts and long-term strategy position us for improved profitability and sustained value creation.”

For earnings history and earnings-related data on Rayonier Advanced Materials (RYAM) click here.