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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Rayonier Advanced Materials / Equity Bottom-Up

<ul><li>Portfolio strength and market weakness. At a recently held Investor Day, RYAM management highlighted its cellulose product portfolio, the company’s biomaterials initiative, and the current state of the industry in the wake of the G-P closure announcement.</li><li>RYAM also provided an update on 2023 guidance and a look at 2024 and 2027 EBITDA bridges.</li><li>Asset evaluation proceeding to the next round. Following the Investor Day, RYAM announced that it engaged Houlihan Lokey as its financial advisor to explore the potential sale of its paperboard and high-yield pulp (HYP) assets located at its Temiscaming site, as it advances its initiative to expand into higher-growth, higher-margin specialty businesses and reduce its exposure to commodity cellulose markets.</li></ul>

Portfolio strength and market weakness. At a recently held Investor Day, RYAM management highlighted its cellulose product portfolio, the company’s biomaterials initiative, and the current state of the industry in the wake of the G-P closure announcement.RYAM also provided an update on 2023 guidance and a look at 2024 and 2027 EBITDA bridges.Asset evaluation proceeding to the next round. Following the Investor Day, RYAM announced that it engaged Houlihan Lokey as its financial advisor to explore the potential sale of its paperboard and high-yield pulp (HYP) assets located at its Temiscaming site, as it advances its initiative to expand into higher-growth, higher-margin specialty businesses and reduce its exposure to commodity cellulose markets.

Rayonier Advanced Materials, Inc. - Investor Day Highlights "Specialty" In Specialty Cellulose

<div><div><div><div><ul style="list-style-type: disc;"><li><p>We are initiating coverage of Rayonier Advanced Materials, Inc. (RYAM), a leading supplier of wood- derived products and specialty materials, such as specialty cellulosics, paperboard, and high-yield pulp, to the industrial and consumer markets.</p></li><li><p>The company is currently focused on deleveraging the balance sheet and investing in the growth of higher-value biomaterial products, while improving operations and profitability of cash generative, but slower-growing, legacy operations.</p></li><li><p>FCF generation in a weak operating environment. With 2Q23 seeing downward pressure on commodity prices, as they retreat from the post-pandemic spike, and volumes, affected by customer destocking, management raised its free cash flow (FCF) generation goal to $55-70 million from $40-65 million in 2023 in order to accelerate debt paydown, toward the 2.5x net debt to EBITDA target level.</p></li></ul></div></div></div></div>

We are initiating coverage of Rayonier Advanced Materials, Inc. (RYAM), a leading supplier of wood- derived products and specialty materials, such as specialty cellulosics, paperboard, and high-yield pulp, to the industrial and consumer markets.The company is currently focused on deleveraging the balance sheet and investing in the growth of higher-value biomaterial products, while improving operations and profitability of cash generative, but slower-growing, legacy operations.FCF generation in a weak operating environment. With 2Q23 seeing downward pressure on commodity prices, as they retreat from the post-pandemic spike, and volumes, affected by customer destocking, management raised its free cash flow (FCF) generation goal to $55-70 million from $40-65 million in 2023 in order to accelerate debt paydown, toward the 2.5x net debt to EBITDA target level.

Rayonier Advanced Materials, Inc. - Mature Business Growing New Shoots

United States

Rayonier Advanced Materials Inc operates as a performance fibers business. The company produces specialty cellulose fibers using proprietary cellulose chemistry knowledge and manufacturing processes.

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Rayonier Advanced Materials (RYAM US)

Rayonier Advanced Materials, Inc. - Investor Day Highlights "Specialty" In Specialty Cellulose

At a recently held Investor Day, RYAM management highlighted its cellulose product portfolio, the company’s biomaterials initiative

Water Tower Research

Rayonier Advanced Materials, Inc. - Mature Business Growing New Shoots

The company is currently focused on deleveraging the balance sheet and investing in the growth of higher-value biomaterial products, while...

Water Tower Research

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