In a letter sent to employees, Appvion said due to a market decline in the carbonless and security markets, it was faced with a need to restructure in “order to survive and prosper.” The restructuring agreement calls for a permanent reduction in the workforce at Spring Mill over the next several months. As part of this agreement, there will be a severance package offering for up to 50 employees based on seniority. The intent is to provide a bridge to those who are approaching retirement or would like to explore other opportunities, according to the letter.
First Quarter Highlights
*First quarter loss from continuing operations was $25 million, comparable to the prior year
*First quarter EBITDA was $27 million, a $17 million improvement from prior year driven by lower costs from improved reliability
*$35 million improvement on Free Cash Flow from prior year
*Maintaining solid liquidity at $145 million; well within financial debt covenant compliance
*Expect second quarter 2020 results to be well above prior year
Rayonier Advanced Materials Inc. (NYSE:RYAM) (the “Company”) provided the following updates on its markets and operations:
“In response to the COVID-19 pandemic, we’ve taken decisive actions to ensure the safety of our employees and to protect our business by minimizing operational disruptions and mitigating the financial impact through prudent cost and capex reductions,” said Paul Boynton, Chairman, President and Chief Executive Officer. “All of our businesses and operations have been deemed essential due to the important role these products play in the food, pharmaceutical, and industrial products supply chains. We are focused on maintaining stable operations and providing security of supply to our customers during these unprecedented times.”
First Quarter 2020 Operating Results
The Company reported a loss from continuing operations for the three months ended March 28, 2020 of $25 million, or $0.39 per diluted common share, compared to a loss of $28 million, or $0.64 per diluted common share for the same prior year period. The decrease in the diluted loss per share was due to the conversion of the Company’s preferred stock into approximately 13 million shares of common stock in August of 2019.
High Purity Cellulose
For the three-month period ended March 28, 2020, operating results declined $2 million compared to the same prior year period. The decline was driven by 18 percent lower cellulose specialties sales volumes, in line with forecasts, and 30 percent lower commodity products sales prices as viscose pricing continued at 2019 year-end low levels. The cellulose specialties sales volumes were significantly stronger in the 2019 quarter due to favorable sales timing in that quarter, as certain shipments made in the fourth quarter of 2018 were not recognized as sales until the first quarter 2019. This sales timing accounted for approximately one-third of the decrease in sales volumes. This was partially offset by slightly higher cellulose specialties sales prices, higher commodity products sales volumes, and lower costs. Costs improvements were driven by lower wood prices, as the prior year prices were negatively impacted by wet weather, lower commodity chemical costs and improved productivity, primarily at the Temiscaming mill which was negatively impacted by an unplanned outage in the previous year.
Compared to the fourth quarter of 2019, operating income declined $1 million as lower cellulose specialties and commodity sales volumes were mostly offset by lower costs.
The operating loss for the three-months ended March 28, 2020 improved $4 million when compared to the same prior year period primarily due to the 5 percent increase in lumber prices partially offset by increased duties for lumber as a result of the increased prices and increase in volumes shipped to the U.S.The Company incurred $6 million and $5 million of duties in the quarter ended March 28, 2020 and March 30, 2019, respectively. The Company reduced or ceased production at its sawmills at the end of the first quarter of 2020 due to the decreased market demand resulting from the COVID-19 outbreak.
Compared to the fourth quarter of 2019, the operating loss improved by $3 million. The improvement was driven by a 6 percent increase in lumber sales prices which was partially offset by a 4 percent decline in lumber sales volumes due to the rail blockades in Canada and the initial impact of the COVID-19 pandemic and increased wood costs.
Operating income improved $7 million for the three months ended March 28, 2020 when compared to the same prior year period primarily due to lower raw material pulp prices.
Compared to the fourth quarter of 2019, operating income improved $2 million primarily due to lower raw material pulp prices.
Pulp & Newsprint
Operating income for the three months ended March 28, 2020 declined $8 million when compared to the same prior year period. The decline was primarily driven by 20 percent and 30 percent decreases in high-yield pulp and newsprint sales prices, respectively, partially offset by 42 percent and 5 percent increases in high-yield pulp and newsprint sales volumes, respectively, and improved freight costs.
Compared to the fourth quarter of 2019, the operating loss was $4 million worse. The decline was driven by lower newsprint sales prices and lower newsprint and high-yield pulp sales volumes partially offset by increased high-yield pulp sales prices.
details at: http://investors.rayonieram.com/news-releases/news-release-details/rayonier-advanced-materials-provides-market-and-operations