What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-06 · 326 added, 373 removed, 316 unchanged (69% of the section changed)

1 unchanged sentence

Rayonier Advanced Materials Inc.

Consolidated Statements of Operations

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

March 29, 2025 March 30, 2024

Net sales $ 355,967 $ 387,656

3 unchanged sentences

Foreign exchange gain (loss) ( 1,108 ) 2,911

Asset impairment (Note 2) ( 25,169 ) — ( 25,169 ) —

Indefinite suspension charges (Note 2) ( 405 ) —

Other operating income (expense), net ( 2,862 ) ( 2,634 ) 3,381 ( 4,939 )

Environmental remediation expense ( 13,147 ) ( 634 )

Other operating expense, net ( 1,228 ) ( 888 )

Operating income (loss) ( 15,093 ) 17,075

1 unchanged sentence

Components of pension and OPEB, excluding service costs (Note 14)

Other income (expense), net ( 173 ) 3,281 1,748 6,894

Loss from continuing operations before income tax ( 36,669 ) ( 31,673 ) ( 30,484 ) ( 50,191 )

Other income, net 892 1,270

Loss before income tax ( 37,172 ) ( 1,590 )

Income tax benefit (Note 15)

Equity in loss of equity method investment ( 372 ) ( 452 )

Loss from continuing operations ( 32,598 ) ( 26,540 ) ( 25,995 ) ( 40,555 )

Income from discontinued operations, net of tax (Note 3) — 1,440 3,217 312

Net loss ( 31,952 ) ( 1,570 )

Net income attributable to redeemable noncontrolling interest (Note 10)

Net loss attributable to RYAM $ ( 31,970 ) $ ( 1,570 )

Basic and Diluted earnings per common share (Note 12)

Loss from continuing operations $ ( 0.49 ) $ ( 0.41 ) $ ( 0.40 ) $ ( 0.62 )

Income from discontinued operations — 0.02 0.05 —

Net loss $ ( 0.49 ) $ ( 0.39 ) $ ( 0.35 ) $ ( 0.62 )

See Notes to Consolidated Financial Statements.

Net loss per common share $ ( 0.49 ) $ ( 0.02 )

See Notes to Condensed Consolidated Financial Statements.

Rayonier Advanced Materials Inc.

Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

March 29, 2025 March 30, 2024

Net loss $ ( 31,952 ) $ ( 1,570 )

2 unchanged sentences

Unrealized gain on derivative instruments 32 41

Net gain (loss) on employee benefit plans ( 14 ) ( 65 ) 2,434 ( 2,432 )

Net loss on employee benefit plans ( 100 ) ( 14 )

Total other comprehensive income (loss) 7,610 ( 4,454 )

Comprehensive loss ( 24,342 ) ( 6,024 )

See Notes to Consolidated Financial Statements.

Comprehensive income attributable to redeemable noncontrolling interest 426 —

Comprehensive loss attributable to RYAM $ ( 24,768 ) $ ( 6,024 )

See Notes to Condensed Consolidated Financial Statements.

Rayonier Advanced Materials Inc.

Consolidated Balance Sheets

Condensed Consolidated Balance Sheets

(in thousands, except share and par value amounts)

September 28, 2024 December 31, 2023

March 29, 2025 December 31, 2024

Current assets

1 unchanged sentence

Accounts receivable, net (Note 3)

167,116 213,972

Inventory (Note 4)

212,037 208,003

Income tax receivable 145 2,637

7 unchanged sentences

Total assets $ 2,117,531 $ 2,129,657

Liabilities and Stockholders’ Equity

Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity

Current liabilities

1 unchanged sentence

Accrued and other current liabilities (Note 6)

166,190 170,785

Debt due within one year (Note 7)

29,022 23,379

Current environmental liabilities (Note 8)

1 unchanged sentence

Long-term debt (Note 7)

707,011 706,444

Non-current environmental liabilities (Note 8)

171,885 160,466

Pension and other postretirement benefits (Note 14)

76,173 77,239

Deferred tax liabilities 13,248 13,685

1 unchanged sentence

Commitments and contingencies (Note 17)

Redeemable noncontrolling interest (Note 10)

11,337 10,503

Stockholders’ Equity

4 unchanged sentences

Accumulated other comprehensive loss (Note 11)

( 38,059 ) ( 45,669 )

Total stockholders’ equity 688,084 713,885

Total liabilities and stockholders’ equity $ 2,159,360 $ 2,182,700

See Notes to Consolidated Financial Statements.

Total liabilities, redeemable noncontrolling interest and stockholders’ equity $ 2,117,531 $ 2,129,657

See Notes to Condensed Consolidated Financial Statements.

Rayonier Advanced Materials Inc.

Consolidated Statements of Stockholders’ Equity

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

1 unchanged sentence

Shares Par Value

Three months ended September 28, 2024

Balance at June 29, 2024

65,890,093 $ 659 $ 421,944 $ 382,408 $ ( 49,877 ) $ 755,134

Net loss — — — ( 32,598 ) — ( 32,598 )

Other comprehensive income, net of tax — — — — 8,575 8,575

Issuance of common stock under incentive stock plans 8,619 — — — — —

Stock-based compensation — — 1,619 — — 1,619

Repurchase of common stock (a)

( 2,711 ) — ( 18 ) — — ( 18 )

Balance at September 28, 2024

65,896,001 $ 659 $ 423,545 $ 349,810 $ ( 41,302 ) $ 732,712

Three months ended September 30, 2023

Balance at July 1, 2023

65,343,418 $ 654 $ 416,042 $ 459,280 $ ( 61,959 ) $ 814,017

Net loss — — — ( 25,100 ) — ( 25,100 )

Other comprehensive loss, net of tax — — — — ( 5,230 ) ( 5,230 )

Stock-based compensation — — 1,990 — — 1,990

Balance at September 30, 2023

65,343,418 $ 654 $ 418,032 $ 434,180 $ ( 67,189 ) $ 785,677

Nine months ended September 28, 2024

Three months ended March 29, 2025

Balance at December 31, 2024

65,966,881 $ 660 $ 425,303 $ 333,591 $ ( 45,669 ) 713,885

Net loss — — — ( 22,778 ) — ( 22,778 )

Net loss attributable to RYAM — — — ( 31,970 ) — ( 31,970 )

Other comprehensive income, net of tax — — — — 7,610 7,610

3 unchanged sentences

( 375,426 ) ( 4 ) ( 2,834 ) — — ( 2,838 )

Balance at September 28, 2024

Redeemable noncontrolling interest adjustment to redemption value — — — ( 408 ) — ( 408 )

Balance at March 29, 2025

66,754,665 $ 668 $ 424,262 $ 301,213 $ ( 38,059 ) $ 688,084

Nine months ended September 30, 2023

Three months ended March 30, 2024

Balance at December 31, 2023

65,393,014 $ 654 $ 419,122 $ 372,588 $ ( 45,917 ) $ 746,447

Net loss — — — ( 40,243 ) — ( 40,243 )

Net loss attributable to RYAM — — — ( 1,570 ) — ( 1,570 )

Other comprehensive loss, net of tax — — — — ( 4,454 ) ( 4,454 )

3 unchanged sentences

( 81,710 ) ( 1 ) ( 452 ) — — ( 453 )

Balance at September 30, 2023

Balance at March 30, 2024

65,554,837 $ 655 $ 420,448 $ 371,018 $ ( 50,371 ) $ 741,750

(a) Repurchased to satisfy tax withholding requirements related to the issuance of stock under the Company’s incentive stock plans.

See Notes to Consolidated Financial Statements.

See Notes to Condensed Consolidated Financial Statements.

Rayonier Advanced Materials Inc.

Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Cash Flows

(in thousands)

Nine Months Ended

September 28, 2024 September 30, 2023

Three Months Ended

March 29, 2025 March 30, 2024

Operating activities

1 unchanged sentence

Adjustments to reconcile net loss to cash provided by operating activities:

Income from discontinued operations ( 3,217 ) ( 312 )

Depreciation and amortization 31,251 33,283

Asset impairment 25,169 —

Stock-based compensation expense 1,805 1,780

Deferred income tax benefit ( 6,016 ) 47

Increase in environmental liabilities 13,021 653

Change in fair value of put option liability 494 —

Net periodic benefit cost of pension and other postretirement plans 648 755

Unrealized (gain) loss on foreign currency 730 ( 1,899 )

(Gain) loss on disposal of property, plant and equipment 1,701 ( 1,085 )

Other 1,514 2,362

1 unchanged sentence

Accounts receivable 47,744 12,792

Income tax receivable 19,723 ( 3,742 )

Inventories ( 26,485 ) 22,301

Inventory ( 3,222 ) ( 21,231 )

Accounts payable 5,857 ( 14,320 )

Accrued and other current liabilities ( 6,531 ) ( 12,476 )

Duty refund rights 40,111 ( 1,946 )

Other ( 13,777 ) 13,353

3 unchanged sentences

Capital expenditures, net of proceeds ( 37,510 ) ( 32,561 )

Investment in equity method investment — ( 415 )

Cash used in investing activities ( 37,510 ) ( 32,561 )

5 unchanged sentences

Repurchase of common stock ( 2,838 ) ( 453 )

Cash used in financing activities ( 9,978 ) ( 111,772 )

Cash provided by (used in) financing activities ( 718 ) 927

Net increase (decrease) in cash and cash equivalents 1,388 ( 20,369 )

4 unchanged sentences

Interest paid $ ( 877 ) $ ( 34,036 )

Income taxes refunded (paid), net 19,608 ( 7,215 )

Income taxes refunded, net 2,119 1,587

Capital assets purchased on account 38,542 23,495

See Notes to Consolidated Financial Statements.

See Notes to Condensed Consolidated Financial Statements.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Nature of Operations and Basis of Presentation

Nature of Operations

RYAM is a global leader in the production of cellulose specialties, a natural polymer used in the manufacturing of various specialty chemical products, including liquid crystal displays, filters, textiles and performance additives for pharmaceutical, food and other industrial applications.

The Company’s specialized assets also produce bioelectricity, biomaterials, including biofuels, lignin and tall oil soap, and commodity fluff, viscose and paper pulp.

Additionally, RYAM produces a unique, lightweight multi-ply paperboard product and a bulky, high-yield pulp product.

The Company’s paperboard is used for production in the commercial printing, lottery ticket and high-end packaging sectors.

The Company’s high-yield pulp is used by paperboard producers as well as in traditional printing, writing and specialty paper manufacturing.

Basis of Presentation

RYAM is a global leader of specialty cellulose materials with a broad offering of high purity cellulose specialties, a natural polymer used in the production of a variety of specialty chemical products, including liquid crystal displays, filters, textiles and performance additives for pharmaceutical, food and other industrial applications.

The Company’s specialized assets are also used to produce biofuels, bioelectricity and other biomaterials such as bioethanol and tall oils.

The Company also produces a unique, lightweight multi-ply paperboard product, which is used for production in the commercial printing, lottery ticket and high-end packaging sectors, and a bulky, high-yield pulp product that is used by paperboard producers, as well as in traditional printing, writing and specialty paper manufacturing.

The unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with GAAP for interim financial information and in accordance with the rules and regulations of the SEC.

In the opinion of management, these consolidated financial statements and notes reflect all adjustments, including all normal recurring adjustments, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented.

The Financial Statements and notes thereto have been prepared in accordance with GAAP for interim financial information and in accordance with the rules and regulations of the SEC.

In the opinion of management, the accompanying Financial Statements and notes reflect all adjustments, including all normal recurring adjustments, necessary for a fair statement of the results of operations, financial position and cash flows for the periods presented.

The December 31, 2024 consolidated balance sheet was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

These statements and notes should be read in conjunction with the consolidated financial statements and supplementary data included in the Company’s 2024 Form 10-K.

As a result of the sale of its lumber and newsprint assets in August 2021, the Company presents the historical results for those operations, and any subsequent directly associated impacts, as discontinued operations.

Unless otherwise stated, information in these notes to consolidated financial statements relates to continuing operations.

See Note 3—Discontinued Operations for further information on the sale.

New Segment Structure

In the first quarter of 2025, the Company reorganized its High Purity Cellulose operating segment as a result of changes in its internal operating model, significant developments in its Biomaterials strategy and a successful launch of an enterprise reporting system that significantly enhances the Company’s financial reporting and costing capabilities.

Specifically, the Company determined, in light of these new developments and capabilities, that the performance and outlook of the High Purity Cellulose business will be better managed as three separate businesses:

Cellulose Specialties, Cellulose Commodities and a new Biomaterials business.

No changes were made to the composition of the Paperboard and High-Yield Pulp operating segments.

As a result of this reorganization, the Company now operates in five operating segments:

Cellulose Specialties, Cellulose Commodities, Biomaterials, Paperboard and High-Yield Pulp.

Prior period segment results have been recast to align with this new segment reporting structure.

See Note 16—Segments for further information.

Recent Accounting Developments

Change in Accounting Policy

On January 1, 2024, the Company changed the method of valuation of its finished goods, work-in-process and raw materials inventories from first-in first-out to average cost.

The Company believes the average cost method is preferable because it provides better matching of revenue and expense trends and is a better reflection of periodic income from operations.

This change was not retrospectively applied to prior periods presented, as the overall effect of the change is not deemed material to the Company’s consolidated financial statements.

Altamaha Green Energy Joint Venture

The Company is involved with AGE, under a preliminary joint venture agreement with Beasley Green Power, LLC.

AGE aims to construct a biomass boiler and turbine to produce and sell green electricity to Georgia Power Company.

AGE is not engaged in any other operating activities and since formation it has only been focused on developing feasibility studies for this project and handling related administrative matters.

AGE expenses to date have been shared evenly by RYAM and Beasley and have not been material for the Company for any of the periods presented.

The amounts expensed by the Company have been recorded as general and administrative expenses.

Once the project evolves from the development stage and the current joint venture agreement between the Company and Beasley is amended to reflect the appropriate terms, the Company will evaluate the accounting and disclosure implications.

Accounting Pronouncements

There have been no new or recently adopted accounting pronouncements impacting the Company’s consolidated interim financial statements.

The Company continues to evaluate the impacts of ASU 2023-05 “Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement,” ASU 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” and ASU 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” as previously disclosed in its 2023 Form 10-K.

Accounting Standards Updates Implemented

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires enhanced annual income tax disclosures, primarily through changes to the rate reconciliation and income taxes paid information.

The Company is adopting ASU 2023-09 for the fiscal year ending December 31, 2025 on a prospective basis.

The adoption of this ASU has no impact on the Company’s interim Financial Statements and related disclosures.

In August 2023, the FASB issued ASU 2023-05 “Business Combinations—Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement,” which provides specific guidance on how a joint venture, upon formation, should recognize and initially measure assets contributed and liabilities assumed.

The Company adopted ASU 2023-05 on January 1, 2025 and it will be applied on a prospective basis to all joint ventures with a formation date on or after January 1, 2025.

The adoption of this ASU had no impact to the Company’s Financial Statements.

Subsequent Events

Debt Issuance and Redemption

In October 2024, the Company raised $ 700 million in aggregate principal amount of secured term loan financing and received net proceeds of $ 683 million after original issue discount, which will be used in the fourth quarter, together with cash on hand, to redeem the respective $ 453 million and $ 246 million outstanding principal balances of the 2026 Notes and 2027 Term Loan and pay estimated fees and expenses related to the transaction of approximately $ 30 million.

Events and transactions subsequent to the consolidated balance sheets date have been evaluated for potential recognition and disclosure through the date of issuance of these consolidated financial statements.

No subsequent events were identified.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

The 2029 Term Loan matures in October 2029, bears interest at an annual rate equal to three-month Term SOFR plus an initial spread of 7 percent and requires quarterly principal payments of $ 1.75 million.

The initial spread may fluctuate by one half percent based on the Company’s net secured leverage ratio.

If net secured leverage is below 2.5 times covenant EBITDA, the spread decreases to 6.5 percent.

If net secured leverage exceeds 3.5 times covenant EBITDA, the spread increases to 7.5 percent.

The Company may voluntarily make prepayments at any time, subject to customary breakage costs and, if within the first three anniversaries of closing, an additional premium.

For the first 18 months, prepayment of the loan is subject to a make-whole premium.

For the following six months, prepayment is subject to a 2 percent premium.

In the third year, prepayment is subject to a 1 percent premium.

After 3 years, the loan is prepayable at par .

The Company will also have the ability to make prepayment using the proceeds from the sale of its Paperboard and High-Yield Pulp businesses at a 2 percent premium during the first year, a 1 percent premium in year two, and par in year three.

The Company will be required to maintain a consolidated net secured leverage ratio, based on covenant EBITDA, as follows:

• 5.00 to 1.00 for the fourth quarter of 2024 through fiscal year 2025;

• 4.75 to 1.00 for fiscal year 2026;

• 4.50 to 1.00 for each fiscal year thereafter.

The agreement governing the 2029 Term Loan contains various other customary covenants that limit the ability of the Company and its restricted subsidiaries, as defined by the term loan agreement, to take certain specified actions, subject to certain exceptions, including:

incurring debt or liens, making investments, entering into mergers, consolidations, and acquisitions, paying dividends and making other restricted payments.

Additionally, the 2029 Term Loan contains customary affirmative covenants and customary events of default (subject, in certain cases, to customary grace or cure periods), including, without limitation, late payment, breach of covenant, bankruptcy, judgment and defaults under certain other indebtedness and changes in control.

In conjunction with the above refinancing, the Company secured commitments for a five-year $ 175 million ABL credit facility.

The facility is initially priced at Term SOFR plus a spread of 2 percent.

The Company expects to record a net loss on debt extinguishment in the fourth quarter of approximately $ 19 million related to these transactions, driven by the write off of deferred financing costs of the 2026 Notes, 2027 Term Loan and ABL Credit Facility.

Jesup Plant Fire

In October 2024, an isolated fire occurred at the Company’s Jesup plant during planned maintenance activity.

There were no injuries to employees or contractors and no risk to the surrounding community.

The plant’s C line operations resumed within two days and the A and B lines’ operations resu med within a two-week period.

While the Company continues to assess the financial impact of the incident, the unfavorable impact to EBITDA in 2024 is expected to approximate $ 10 million, with an additional required $ 3 million of maintenance capital .

Additional capital expenditures will be required over the next couple of years to complete repairs.

The Company carries insurance for property and business interruption loss with a $ 15 million combined deductible.

Indefinite Suspension of Operations

As previously announced, the Company began its indefinite suspension of operations at its Temiscaming High Purity Cellulose plant in July 2024.

The suspension does not affect the Temiscaming paperboard and high-yield pulp plants that support the Company’s High-Yield Pulp and Paperboard operating segments, which will continue to operate at full capacity while remaining part of an ongoing sales process.

The suspension of operations timeline allows enough lead time for the Company to properly execute the shutdown prior to the arrival of winter in the region.

The High Purity Cellulose plant will be idled in a safe and environmentally sound manner.

The Company will assess on an annual basis the possibility of restarting the Temiscaming High Purity Cellulose plant.

The suspension of operations began on July 16, 2024 and is expected to conclude in the fourth quarter.

In connection with the suspension of operations, the Company has incurred total one-time operating charges of $ 14 million.

Potential remaining one-time charges to be incurred in the fourth quarter are estimated at $ 2 million to $ 3 million.

While most cash costs associated with the suspension of operations will be paid in the third and fourth quarters, severance and other suspension costs are expected to be paid over a period of time.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

In the third quarter of 2024, in conjunction with the indefinite suspension of operations, the Company recognized a non-cash asset impairment of $ 25 million, as it was determined that the Temiscaming High Purity Cellulose plant’s net carrying value exceeded its estimated fair value.

Determining the fair value of an asset group is judgmental in nature and involves the use of significant estimates and assumptions.

The Company determined the fair value of the Temiscaming High Purity Cellulose plant asset group using discounted cash flows under the income approach, which required the use of key assumptions and significant estimates.

See Note 10—Fair Value Measurements for further information on the fair value measurement of the Temiscaming plant asset group.

The following table presents the accrued liability balance activity related to the suspension during the nine months ended September 28, 2024:

In July 2024, the Company indefinitely suspended operations at its Temiscaming cellulose plant.

The Temiscaming paperboard and high-yield pulp plants that support the Company’s Paperboard and High-Yield Pulp operating segments will continue to operate at full capacity while remaining part of an ongoing sales process.

The Temiscaming cellulose plant was idled in a safe and environmentally sound manner, and the Company will assess, on at least an annual basis, the possibility of restarting the Temiscaming cellulose plant.

Indefinite suspension of operations activities began in July 2024 and were mostly completed in the prior year.

Since the start of the indefinite suspension in 2024, the Company has incurred total one-time operating charges of $ 17 million, including $ 6 million of mothballing costs, $ 6 million of severance and other employee costs and $ 5 million of other costs.

While most cash costs associated with the indefinite suspension of operations were paid in the third and fourth quarters of 2024, severance and other indefinite suspension costs are expected to be paid over a period of time.

Remaining one-time charges to be incurred are not expected to be material.

The following table presents the accrued liability balance activity and one-time charges incurred related to the indefinite suspension during the three months ended March 29, 2025:

Mothballing Costs Severance and Other Employee Costs Total

Balance at December 31, 2024

Charges incurred (a)

$ 977 $ 5,010 $ 5,987

Charges incurred 490 ( 85 ) 405

Payments ( 1,407 ) ( 2,176 ) ( 3,583 )

Balance at September 28, 2024

$ 488 $ 5,316 $ 5,804

(a) Excludes non-cash items.

The following table presents total suspension charges incurred by cost type:

Three Months Ended September 28, 2024

Nine Months Ended September 28, 2024

Mothballing costs $ 3,036 $ 3,456

Severance and other employee costs — 6,206

Loss on asset disposal 995 995

Other suspension costs 3,794 3,794

Indefinite suspension charges (a)

Balance at March 29, 2025

$ 60 $ 2,749 $ 2,809

(a) Includes non-cash charges of (i) a $ 2 million write-off of deferred shutdown costs, (ii) $ 2 million for potential contract penalties, (iii) a loss on asset disposal of $ 1 million and (iv) a $ 1 million loss on pension curtailment charges associated with early retirements driven by the suspension of operations.

See Note 14—Employee Benefit Plans for further information regarding the loss on pension curtailment charges.

The above costs incurred were charged to the High Purity Cellulose segment in “indefinite suspension charges” in the consolidated statements of operations.

Discontinued Operations

In August 2021, the Company completed the sale of its lumber and newsprint facilities and certain related assets located in Canada.

As part of the sale of the lumber assets, the Company retained all refund rights and obligations, including interest, to softwood duties generated or incurred through the closing date of the sale.

In total, the Company paid $ 112 million in softwood lumber duties from 2017 through 2021, and as of December 31, 2023, the Company had a $ 40 million long-term receivable related to USDOC administrative reviews completed to date.

In June 2024, the Company executed on the sale of these refund rights (inclusive of the receivable), including all accrued interest, for $ 39 million, with the opportunity for additional sale proceeds in the future contingent upon the timing and terms of the ultimate outcome of the trade dispute between the USDOC and Canada.

The Company recorded a $ 1 million loss on the sale, included in pre-tax income from discontinued operations.

Also during the nine months ended September 28, 2024, the Company recognized $ 5 million in pre-tax income from discontinued operations related to CEWS benefit claims deferred since 2021.

See Note 7—Accrued and Other Current Liabilities for further information.

During the quarter and nine months ended September 30, 2023, the USDOC completed its administrative review of duties applied to Canada softwood lumber exports to the U.S.

during 2021 and reduced rates applicable to the Company, for which the Company recorded a pre-tax gain of $ 2 million.

Also during the nine months ended September 30, 2023, the Company incurred a $ 2 million loss related to the settlement of a claim pursuant to the representations and warranties in the asset purchase agreement.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Income from discontinued operations was comprised of the following:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Loss on sale of duty refund rights $ — $ — $ ( 890 ) $ —

Selling, general and administrative and other operating income, net — 1,957 5,267 424

Operating income — 1,957 4,377 424

Income from discontinued operations before income tax — 1,957 4,377 424

Income tax expense — ( 517 ) ( 1,160 ) ( 112 )

Income from discontinued operations, net of tax $ — $ 1,440 $ 3,217 $ 312

Charges incurred during the period were recorded to the Cellulose Commodities segment in “indefinite suspension charges” in the condensed consolidated statements of operations.

Accounts Receivable, Net

Accounts receivable, net included the following:

September 28, 2024 December 31, 2023

March 29, 2025 December 31, 2024

Accounts receivable, trade $ 148,303 $ 191,091

5 unchanged sentences

Inventory included the following:

September 28, 2024 December 31, 2023

March 29, 2025 December 31, 2024

Finished goods $ 158,788 $ 156,407

3 unchanged sentences

Inventory $ 212,037 $ 208,003

The Company’s operating and finance leases are primarily for corporate offices, warehouse space, rail cars and equipment.

As of September 28, 2024, the Company’s leases have remaining lease terms of less than one year to 12.1 years with standard renewal and termination options available at the Company’s discretion.

Certain equipment leases have purchase options at the end of the term of the lease, which are not included in the ROU assets, as it is not reasonably certain that the Company will exercise such options.

The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants.

The Company uses its incremental borrowing rate in determining the present value of lease payments unless the lease provides an implicit or explicit interest rate.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

The Company’s operating and finance leases are primarily for corporate offices, warehouse space, rail cars and equipment.

As of March 29, 2025, the Company’s leases have remaining lease terms of less than one year to 11.6 years, with standard renewal and termination options available at the Company’s discretion.

Certain equipment leases have purchase options at the end of the lease term, which are not included in the ROU assets, as it is not reasonably certain that the Company will exercise such options.

Short-term leases with an initial term of 12 months or less are not recorded in the condensed consolidated balance sheets.

The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants.

The Company uses its incremental borrowing rate to determine the present value of lease payments unless the lease provides an implicit or explicit interest rate.

Financial and other information related to the Company’s operating and finance leases follow:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Three Months Ended

March 29, 2025 March 30, 2024

Operating lease cost $ 2,532 $ 1,710

3 unchanged sentences

Total lease cost $ 2,661 $ 1,839

Balance Sheet Location September 28, 2024 December 31, 2023

Operating leases (a)

Balance Sheet Location March 29, 2025 December 31, 2024

Operating leases

ROU assets Other assets $ 29,867 $ 31,112

4 unchanged sentences

Lease liabilities Long-term debt 808 921

(a) During the second quarter of 2024, the Company recorded an ROU asset and corresponding lease liability of $ 14 million related to a new warehouse lease agreement in Canada.

Nine Months Ended

September 28, 2024 September 30, 2023

Three Months Ended

March 29, 2025 March 30, 2024

Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities $ 2,500 $ 1,675

Operating lease ROU assets obtained in exchange for lease liabilities 198 1,194

Finance lease cash flows were immaterial during each of the nine months ended September 28, 2024 and September 30, 2023.

September 28, 2024 December 31, 2023

Finance lease cash flows were immaterial during each of the three months ended March 29, 2025 and March 30, 2024.

March 29, 2025 December 31, 2024

Operating leases

5 unchanged sentences

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Operating lease maturities as of September 28, 2024 were as follows:

Operating lease maturities as of March 29, 2025 were as follows:

Remainder of 2025 $ 7,587

5 unchanged sentences

Accrued and other current liabilities included the following:

September 28, 2024 December 31, 2023

March 29, 2025 December 31, 2024

Accrued customer incentives $ 41,512 $ 52,153

7 unchanged sentences

Accrued and other current liabilities $ 166,190 $ 170,785

(a) Included at September 28, 2024 and December 31, 2023 was $ 4 million and $ 19 million (CAD $ 5 million and $ 25 million), respectively, associated with funds received in 2021 for CEWS.

In the second quarter of 2024, the Company recognized in income $ 15 million of the $ 19 million accrued at December 31, 2023, including $ 10 million in “other operating income (expense), net” and $ 5 million in “income from discontinued operations, net of tax.” The remaining amount will be recognized at the earlier of the conclusion of the final outstanding audit and the expiration of the statute of limitations in July 2025.

(b) Included at September 28, 2024 and December 31, 2023 were $ 18 million and $ 13 million, respectively, of energy-related payables associated with Tartas facility operations.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

(a) Included at both March 29, 2025 and December 31, 2024 was $ 3 million (CAD 5 million) associated with funds received in 2021 for CEWS.

The Company will recognize this amount in income at the time there is sufficient evidence that it will not be required to repay such amounts, which is the earlier of the conclusion of the final outstanding audit and the expiration of the statute of limitations in July 2025.

(b) Included at March 29, 2025 and December 31, 2024 were $ 18 million and $ 17 million, respectively, of energy-related payables associated with Tartas facility operations.

Debt and Finance Leases

Debt and finance leases included the following:

September 28, 2024 December 31, 2023

ABL Credit Facility due December 2025:

$ 135 million net availability, bearing interest of 6.94 % ( 4.94 % adjusted SOFR plus 2.00 % margin) at September 28, 2024

Term Loan due July 2027:

bearing interest of 12.59 % ( 4.59 % three-month Term SOFR plus 8.00 % margin) at September 28, 2024

246,250 250,000

7.625 % Senior Secured Notes due January 2026

March 29, 2025 December 31, 2024

ABL Credit Facility due November 2029:

$ 131 million net availability, bearing interest of 6.42 % ( 4.42 % adjusted SOFR plus 2.00 % margin) at March 29, 2025

2029 Term Loan due October 2029:

bearing interest of 11.52 % ( 4.52 % three-month Term SOFR plus 7.00 % margin) at March 29, 2025

700,000 700,000

1 unchanged sentence

20,244 21,184

Other loans (a)

BioNova debt (a)

21,538 21,120

Other loans (b)

33,197 32,536

Short-term factoring facility 6,764 2,304

5 unchanged sentences

Long-term debt $ 707,011 $ 706,444

(a) Consist of low-interest green loans for energy projects and other loans intended for use in biomaterials projects in France.

In January 2024, the Company amended the 2027 Term Loan to increase the maximum consolidated net secured leverage ratio that it must maintain in the fourth quarter of 2023 and through its 2024 fiscal year (see below).

In addition, should the Company exceed the 4.50 to 1.00 maximum ratio established by the original agreement in any of these quarters, it will incur a fee of 0.25 % of the principal balance outstanding at the end of the applicable quarter.

The Company incurred total fees of $ 3 million related to this amendment, including $ 1 million in legal and advisory fees recorded to “selling, general and administrative expense” in the consolidated statements of operations in the fourth quarter of 2023, and $ 2 million in lender fees recorded as deferred financing costs in the first quarter of 2024 that will be amortized to “interest expense” over the remaining term of the loan.

The Company is required to maintain various financial covenants, including a consolidated net secured leverage ratio, based on covenant EBITDA, as follows:

• 5.25 to 1.00 for the fourth quarter of 2023 through the second quarter of 2024;

• 5.00 to 1.00 for the third fiscal quarter of 2024;

• 4.75 to 1.00 for the fourth fiscal quarter of 2024;

• 4.50 to 1.00 for each fiscal quarter thereafter.

In September 2024, the Company repurchased $ 12 million principal of its 2026 Notes through open-market transactions for $ 12 million cash and recorded an immaterial gain on extinguishment to “other income (expense), net” in the consolidated statements of operations.

In April 2023, the Company repurchased $ 10 million principal of its 2026 Notes through open-market transactions and recorded a gain on extinguishment of $ 1 million to “other income (expense), net” in the consolidated statements of operations.

In August 2023, the Company fully redeemed its 2024 Notes through open-market transactions and recorded a loss on extinguishment of $ 1 million to “other income (expense), net” in the consolidated statements of operations.

(a) Consists of green loans associated with the France bioethanol plant, part of the net assets contributed by the Company to its new subsidiary, BioNova.

(b) Consist of loans for energy projects in France.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

As of March 29, 2025, there were no borrowings outstanding under the BioNova Term Loan.

Covenants and Debt Maturity

As of September 28, 2024, the Company was in compliance with all covenants under its debt agreements.

As of September 28, 2024, the Company’s debt principal payments, excluding finance lease obligations, were due as follows:

Remainder of 2024 (a)

As of March 29, 2025, the Company was in compliance with all covenants under its debt agreements and the Company’s debt principal payments, excluding finance lease obligations, were due as follows:

Remainder of 2025 $ 25,603

Thereafter 16,978

Total debt principal payments $ 781,743

(a) Includes $ 3 million of the $ 246 million outstanding principal balance of the 2027 Term Loan.

The 2027 Term Loan and 2026 Notes will be fully redeemed with the proceeds of the 2029 Term Loan in the fourth quarter of 2024.

The 2029 Term Loan will mature in October 2029.

See Note 1—Basis of Presentation for further information regarding the 2029 Term Loan issuance and the refinancing of the 2026 Notes and 2027 Term Loan.

(b) Includes $ 5 million principal of the 2027 Term Loan.

(c) Includes the $ 453 million outstanding principal balance of the 2026 Notes and $ 5 million principal of the 2027 Term Loan.

(d) Includes the remaining $ 234 million principal balance of the 2027 Term Loan.

Environmental Liabilities

The Company’s environmental liabilities balance changed as follows during the nine months ended September 28, 2024:

The Company’s environmental liabilities balance changed as follows during the three months ended March 29, 2025:

Balance at December 31, 2024

2 unchanged sentences

Foreign currency adjustments ( 50 )

Balance at September 28, 2024

Balance at March 29, 2025

current portion ( 9,747 )

Non-current environmental liabilities $ 171,885

In addition to these estimated liabilities, the Company is subject to the risk of reasonably possible additional liabilities in excess of the established liabilities due to potential changes in circumstances and future events, including, without limitation, changes to current laws and regulations;

Port Angeles, Washington

The Company operated a pulp mill at this site from 1930 until 1997.

Since 2000, the Company has been evaluating remediation of the pulp mill site and adjacent marine areas (a portion of Port Angeles harbor) pursuant to an agreed order with the Washington DOE under the Washington MTCA.

During this period, the Company has performed several voluntary interim soil cleanup actions.

As the next step in collaboration with the Washington DOE, the parties are negotiating a consent order that will formalize approved remedial actions, which include more stringent cleanup standards and an expanded scope.

Consequently, in the first quarter of 2025, the Company increased its estimated remediation liability and recorded an expense of $ 10 million.

The associated cash expenditures are not expected to commence before 2028, with outflows anticipated over the subsequent three to five years .

Augusta, Georgia

The Company operated this site as a wood treatment plant from 1928 to 1988.

This site operates under a 10 -year RCRA hazardous waste facility permit managed by the Georgia EPD.

The most recent permit was issued in 2015, and it must be renewed.

In connection with the Company’s submittal of its permit renewal application, Georgia EPD notified the Company that a revised corrective action plan for the site would be required to capture results of a decade long extended investigation performed pursuant to the current permit.

The revised corrective action plan is being drafted.

It expands the remedial areas for the site and includes an additional off-site area, which were both identified through the investigative studies.

To reflect the additional remedial activities in these expanded areas, in the first quarter of 2025, the Company increased the estimated remediation liability and recorded an expense of $ 2 million.

The cash impact associated with this charge is expected in early 2027.

Rayonier Advanced Materials Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

In addition to the estimated liabilities for the above remediation sites, the Company is subject to the risk of reasonably possible additional liabilities in excess of the established liabilities due to potential changes in circumstances and future events, including, without limitation, changes to current laws and regulations;

changes in governmental agency personnel, direction, philosophy or enforcement policies;

4 unchanged sentences

and changes in accounting rules or interpretations.

Based on information available as of September 28, 2024, the Company estimates this exposure could range up to approximately $ 87 million, although no assurances can be given that this amount will not be exceeded given the factors described above.

Based on information available as of March 29, 2025, the Company estimates this exposure could range up to approximately $ 77 million.

However, no assurances can be given that this amount will not be exceeded given the factors described above.

These potential additional costs are attributable to several sites and other applicable liabilities.

2 unchanged sentences

However, no assurance is given that these estimates will be sufficient for the reasons described above, and additional liabilities could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

Fair Value Measurements

Liabilities Measured at Fair Value on a Recurring Basis

Redeemable Noncontrolling Interest - Put Option

In November 2024, BioNova issued 111,111 preferred shares to SWEN in return for a redeemable noncontrolling interest of approximately 14 percent.

The preferred shares contain an embedded put option that was determined should be bifurcated and recognized separately at fair value, with subsequent changes in fair value recorded in earnings.

SWEN’s put option was initially measured at a fair value of $ 4 million and will be remeasured at the end of each reporting period.

The fair value of the put option is estimated using a Monte Carlo simulation model, which is a Level 3 measurement, with changes in fair value recorded in “other income, net” in the condensed consolidated statements of operations.

The SWEN put option’s liability balance and activity was as follows:

Financial Statement Line Item

Balance at December 31, 2024

Other liabilities $ 4,196

Fair value measurement adjustment Other income, net 494

Foreign currency translation adjustment Foreign currency translation adjustment 165

Balance at March 29, 2025

Other liabilities $ 4,855

There is inherent uncertainty of the fair value measurement of Level 3 securities due to the use of unobservable inputs, including timing and amounts of expected cash flows.

A material change in the unobservable inputs used may result in a higher or lower fair value measurement.

K ey inputs into the Monte Carlo simulation model used to determine the fair value of the SWEN put option at the fair value measurement date were as follows:

March 29, 2025 December 31, 2024

Free cash flow to equity volatility (a)

51.0 % 52.0 %

Risk-free interest rate Term structure of U.S.

Treasury and Euro Government Bond securities Term structure of U.S.

Treasury and Euro Government Bond securities

Weighted average cost of capital 11.6 % 12.1 %

(a) Based on a peer group of companies in a similar or the same industry.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Fair Value Measurements

Assets Measured at Fair Value on a Nonrecurring Basis

Asset Impairment

In the third quarter of 2024, the Company recorded a $ 25 million non-cash impairment related to the Temiscaming High Purity Cellulose plant asset group.

The fair value of the Temiscaming High Purity Cellulose plant assets was determined using discounted cash flows under the income approach from the perspective of a market participant assuming the highest and best use of the asset group.

Discounted cash flows were estimated using key assumptions regarding production levels, price levels, profit margins, capital expenditures and discount rate, which are Level 3 measurements.

See Note 2—Indefinite Suspension of Operations for further information on this impairment.

Financial Instruments

The carrying amounts of the Company’s cash, receivables and payables approximate fair value due to the short-term nature of those instruments.

The carrying amount of borrowings outstanding under the ABL Credit Facility, 2027 Term Loan and short-term factoring facility approximate fair value due to their variable interest rates.

The carrying amounts of the Company’s cash and cash equivalents, receivables and payables approximate fair value due to the short-term nature of those instruments.

The carrying amount of borrowings outstanding under the ABL Credit Facility, 2029 Term Loan and short-term factoring facility approximate fair value due to their variable interest rates and no significant changes in the Company's credit risk.

The fair value of the Company’s fixed rate debt is estimated using quoted market prices for debt with similar terms and maturities, which are Level 2 inputs, and was as follows:

September 28, 2024 December 31, 2023

March 29, 2025 December 31, 2024

Carrying amount of fixed rate debt (a)

2 unchanged sentences

(a) Excludes finance lease obligations.

Redeemable Noncontrolling Interest

In November 2024, the Company and one of its subsidiaries entered into a shareholder agreement with SWEN, pursuant to which SWEN will fund up to € 30 million in exchange for up to 222,222 preferred shares, representing an expected 20 percent total noncontrolling equity interest in BioNova.

Of this commitment, € 15 million was funded at the closing of the shareholder agreement in exchange for 111,111 preferred shares, which currently represents an equity interest in BioNova of approximately 14 percent.

Subsequent funding is contingent on the achievement of project milestones expected during 2025.

The value of SWEN’s redeemable noncontrolling interest is reflected in temporary equity and is accreted to its estimated redemption value at each period end using the interest method.

The redeemable noncontrolling interest balance changed as follows during the three months ended March 29, 2025:

Redeemable Noncontrolling Interest

Balance at December 31, 2024

Adjustment to redemption value 408

Net income attributable to redeemable noncontrolling interest 18

Comprehensive income adjustments:

Foreign currency translation adjustment on redemption value 408

Balance at March 29, 2025

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Accumulated Other Comprehensive Loss

Nine Months Ended

September 28, 2024 September 30, 2023

Three Months Ended

March 29, 2025 March 30, 2024

Unrecognized components of employee benefit plans, net of tax

Balance, beginning of period $ ( 21,060 ) $ ( 33,537 )

Other comprehensive income (loss) before reclassifications 3,371 ( 3,034 )

Income tax on other comprehensive gain (loss) ( 901 ) 804

Reclassifications to earnings (a)

2 unchanged sentences

Income tax on reclassifications 26 1

Net comprehensive income (loss) on employee benefit plans, net of tax 2,434 ( 2,432 )

Net comprehensive loss on employee benefit plans, net of tax ( 100 ) ( 14 )

Balance, end of period ( 21,160 ) ( 33,551 )

13 unchanged sentences

See Note 14—Employee Benefit Plans for further information.

(b) Reclassifications of foreign currency exchange contracts are recorded in “cost of sales,” “other operating income (expense), net” or “other income (expense), net,” as appropriate.

(b) Reclassifications of foreign currency exchange contracts are recorded in “cost of sales,” “other operating expense, net” or “other income, net,” as appropriate.

(c) Foreign currency translation is net of tax effects of $ 0 for all periods presented, as the French operations are taxed on the foreign functional currency, not the translated reporting currency.

Earnings Per Common Share

Basic earnings per share is calculated by dividing net income available for common stockholders by the weighted average number of shares of common stock outstanding during the year.

Diluted earnings per share is calculated by dividing net income available for common stockholders by the weighted average number of shares of common stock outstanding, adjusted for the potentially dilutive effect of outstanding performance-based stock and restricted stock.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Earnings Per Common Share

The following table provides the inputs to the calculations of basic and diluted earnings per common share (share amounts not in thousands):

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Loss from continuing operations $ ( 32,598 ) $ ( 26,540 ) $ ( 25,995 ) $ ( 40,555 )

Income from discontinued operations — 1,440 3,217 312

Net loss available for common stockholders $ ( 32,598 ) $ ( 25,100 ) $ ( 22,778 ) $ ( 40,243 )

Weighted average shares used for determining basic earnings per share of common stock 65,892,750 65,343,418 65,686,397 65,024,654

Dilutive effect of:

Stock options — — — —

Performance and restricted stock — — — —

Weighted average shares used for determining diluted earnings per share of common stock 65,892,750 65,343,418 65,686,397 65,024,654

Three Months Ended

March 29, 2025 March 30, 2024

Net loss $ ( 31,952 ) $ ( 1,570 )

Net income attributable to redeemable noncontrolling interest 18 —

Net loss attributable to RYAM ( 31,970 ) ( 1,570 )

Redeemable noncontrolling interest adjustment to redemption value ( 408 ) —

Net loss attributable to RYAM common stockholders $ ( 32,378 ) $ ( 1,570 )

Weighted average shares used for determining earnings per share of common stock - basic and diluted 66,216,983 65,447,454

Anti-dilutive instruments excluded from the computation of diluted earnings per share included (not in thousands):

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Stock options — 46,798 — 46,798

Three Months Ended

March 29, 2025 March 30, 2024

Performance and restricted stock 2,847,462 3,635,379

Total anti-dilutive instruments 3,419,691 3,349,130 3,419,691 3,349,130

Incentive Stock Plans

Stock-based compensation expense was as follows:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Stock-based compensation expense

Incentive stock plan compensation expense was as follows:

Three Months Ended

March 29, 2025 March 30, 2024

Stock plan compensation expense

$ 2,161 $ 2,091

(a) Included equity award expense of $ 2 million during each of the quarters ended September 28, 2024 and September 30, 2023, and $ 5 million during each of the nine months ended September 28, 2024 and September 30, 2023.

The Company made new grants of restricted stock units, performance-based stock units and performance-based cash awards during the first and second quarters of 2024.

The 2024 restricted stock unit awards cliff vest after three years , except for director awards, which vest after one year .

(a) Included equity award expense of $ 2 million during each of the quarters ended March 29, 2025 and March 30, 2024.

The Company made new grants of restricted stock units, performance-based stock units and performance-based cash awards during the first quarter of 2025.

The 2025 restricted stock unit awards cliff vest after three years .

The 2025 performance-based awards cliff vest after three years and are based equally on TSR relative to peers and three-year cumulative adjusted EBITDA.

Participants can earn between 0 percent and 200 percent of the target award for each of the TSR and adjusted EBITDA metrics.

Performance below threshold for either metric would result in zero payout for that metric.

Performance below the threshold for either metric would result in zero payout for that metric.

The performance-based cash award is paid in cash and is classified as a liability and remeasured to fair value at the end of each reporting period until settlement.

In March 2024, the performance-based awards granted in 2021 vested without meeting the performance thresholds, resulting in no stock units or cash being awarded.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

In March 2025, the performance-based awards granted in 2022 were settled with an issuance of 654,995 shares of common stock for the stock unit awards, including incremental shares of 165,061 , and cash of $ 2 million for the cash awards.

The following table summarizes the 2025 activity of the Company’s incentive stock awards:

Stock Options Restricted Stock Units Performance-Based Stock Units

Options Weighted Average Exercise Price Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value

Restricted Stock Units Performance-Based Stock Units

Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value

Outstanding at December 31, 2024

3 unchanged sentences

Exercised or settled ( 508,215 ) $ 5.31 ( 654,995 ) $ 6.92

Expired or cancelled ( 46,798 ) 29.52 — — — —

Outstanding at September 28, 2024

Outstanding at March 29, 2025

1,611,883 $ 5.68 1,235,579 $ 7.59

Rayonier Advanced Materials Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Employee Benefit Plans

4 unchanged sentences

These estimates are based on historical information and certain assumptions about future events.

During the nine months ended September 28, 2024, the Company recorded a $ 1 million loss on pension curtailment charges associated with early retirements driven by the indefinite suspension of operations at the Temiscaming High Purity Cellulose plant.

The loss on curtailment was recognized in “indefinite suspension charges” in the Company’s consolidated statements of operations.

Additionally, the Company decreased its pension liability by $ 3 million.

See Note 2—Indefinite Suspension of Operations for further information.

During the nine months ended September 30, 2023, the Company recorded a $ 2 million loss related to the final asset surplus distribution to the plan participants of certain wound-up Canadian pension plans.

The settlement was recognized in “components of pension and OPEB, excluding service costs” in the Company’s consolidated statements of operations.

The following tables present the components of net periodic benefit costs of these plans:

The following table presents the components of net periodic benefit costs of these plans:

Pension Postretirement

Three Months Ended Three Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Service cost $ 1,440 $ 1,223 $ 138 $ 293

Interest cost 6,972 7,204 247 352

Expected return on plan assets ( 7,987 ) ( 7,967 ) — —

Amortization of prior service cost (credit) 205 111 ( 24 ) ( 24 )

Amortization of gain ( 11 ) ( 123 ) ( 185 ) ( 54 )

Net periodic benefit cost $ 619 $ 448 $ 176 $ 567

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Pension Postretirement

Nine Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Service cost $ 1,170 $ 1,537 $ 110 $ 138

3 unchanged sentences

Amortization of gain 57 ( 11 ) ( 243 ) ( 185 )

Pension settlement loss — 2,317 — —

Curtailment 736 — — —

Net periodic benefit cost $ 587 $ 578 $ 61 $ 177

Service cost is included in “cost of sales” or “selling, general and administrative expense” in the consolidated statements of operations, as appropriate.

Interest cost, expected return on plan assets, amortization of prior service cost (credit) and amortization of (gain) loss are included in “components of pension and OPEB, excluding service costs” in the consolidated statements of operations.

Service cost is included in “cost of sales” or “selling, general and administrative expense” in the condensed consolidated statements of operations, as appropriate.

Interest cost, expected return on plan assets, amortization of prior service cost (credit) and amortization of gain are included in “components of pension and OPEB, excluding service costs” in the condensed consolidated statements of operations.

Effective Tax Rate

The Company utilized the discrete effective rate method for the three months ended March 29, 2025.

The discrete method is applied when the application of the estimated AETR is impractical because it is not possible to reliably estimate the AETR.

The discrete method treats the year-to-date period as if it was the annual period and calculates the income tax expense or benefit on a discrete basis, rather than forecasting the full year AETR and applying it against current period book earnings.

The Company believes the use of the discrete method represents the best estimate of its AETR in the current period.

The Company’s effective tax rates were as follows:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Loss from continuing operations before income tax

Three Months Ended

March 29, 2025 March 30, 2024

Loss before income tax

$ ( 37,172 ) $ ( 1,590 )

Effective tax rate 15.0 % 29.7 %

The effective tax rates for the quarter and nine months ended September 28, 2024 differed from the federal statutory rate of 21 percent primarily due to changes in the valuation allowance on disallowed interest deductions, the release of certain tax reserves, different statutory tax rates in foreign jurisdictions, U.S.

tax credits, excess deficit on vested stock compensation and return-to-accrual adjustments.

The effective tax rates for the quarter and nine months ended September 30, 2023 differed from the federal statutory rate of 21 percent primarily due to disallowed interest deductions in the U.S.

and nondeductible executive compensation, offset by U.S.

tax credits, return-to-accrual adjustments related to previously filed tax returns, changes in the valuation allowance on disallowed interest deductions and interest received on overpayments of tax from prior years .

The effective tax rate for the nine-month period was also impa cted by an excess tax benefit on vested stock compensation.

The effective tax rate for the three months ended March 29, 2025 differed from the federal statutory rate of 21 percent primarily due to changes in the valuation allowance on disallowed interest deductions, different statutory tax rates in foreign jurisdictions, U.S.

tax credits and nondeductible executive compensation.

The effective tax rate for the three months ended March 30, 2024 differed from the federal statutory rate of 21 percent primarily due to the release of certain tax reserves, partially offset by return-to-accrual adjustments, excess deficit on vested stock compensation and changes in the valuation allowance on disallowed interest deductions.

Rayonier Advanced Materials Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Deferred Taxes

As of September 28, 2024 and December 31, 2023, the Company’s net DTA included $ 14 million and $ 15 million, respectively, of disallowed U.S.

As of March 29, 2025 and December 31, 2024, the Company’s net DTA included $ 16 million and $ 15 million, respectively, of disallowed U.S.

interest deductions that the Company does not believe will be realized.

The asset decreased $ 1 million as a result of a tax expense recognized in the current year.

This asset increased $ 1 million as a result of a tax benefit recognized in the current year.

In strict compliance with the American Institute of Certified Public Accountants’ Technical Questions and Answers 3300.01-02, which asserts that certain material evidence regarding the realizability of disallowed U.S.

interest deductions should be ignored when assessing the need for a valuation allowance, the Company has not recognized a valuation allowance on this portion of the net DTA generated from disallowed interest.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

The Company operates in the following business segments:

High Purity Cellulose, Paperboard and High-Yield Pulp.

As discussed in Note 1—Nature of Operations and Basis of Presentation, beginning in the first quarter of 2025, the Company reorganized its segment structure and now operates in five operating segments:

Cellulose Specialties, Cellulose Commodities, Biomaterials, Paperboard and High-Yield Pulp.

Corporate consists primarily of senior management, accounting, information systems, human resources, treasury, tax and legal administrative functions that provide support services to the operating business units.

The Company allocates a portion of the cost of maintaining these support functions to its operating units.

The Company evaluates the performance of its segments based on operating income (loss).

Intersegment sales consist primarily of High-Yield Pulp sales to Paperboard.

Prior period segment results have been recast to align with this new segment reporting structure.

The Company uses operating income (loss) as a measure of profitability to evaluate segment performance.

Intersegment sales consist primarily of High-Yield Pulp sales to Paperboard, which are eliminated in consolidation.

Additionally, there are intersegment sales of chemicals, sugars and energy from the cellulose plants to Biomaterials, also eliminated in consolidation.

Intersegment sales prices are at rates that approximate market for the respective operating area.

Net sales, disaggregated by product line, was comprised of the following:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

High Purity Cellulose

Cellulose Specialties $ 220,820 $ 164,654 $ 638,382 $ 570,584

Commodity Products 78,129 98,834 253,683 321,548

Other sales (a)

Net sales, significant operating expenses, operating income (loss) and other financial information by segment were as follows:

Three Months Ended March 29, 2025

Cellulose Specialties Cellulose Commodities Biomaterials Paperboard High-Yield Pulp Corporate (a) and Eliminations

Net sales $ 201,108 $ 75,055 $ 6,921 $ 49,193 $ 31,489 $ ( 7,799 ) $ 355,967

Cost of sales

Key input costs (wood, chemicals, energy) 76,966 38,443 1,136 35,624 19,709 ( 8,269 ) 163,609

Freight 9,288 6,330 528 4,848 6,256 — 27,250

Depreciation and amortization 14,693 9,600 481 3,499 575 5 28,853

Fixed and other general costs (b)

64,626 30,257 1,658 3,523 11,480 657 112,201

Total High Purity Cellulose 324,814 292,016 964,174 965,579

Paperboard 54,809 57,212 168,068 164,300

High-Yield Pulp 27,822 25,393 94,981 111,397

Eliminations ( 6,342 ) ( 5,951 ) ( 19,419 ) ( 20,432 )

Total cost of sales 165,573 84,630 3,803 47,494 38,020 ( 7,607 ) 331,913

Selling, general and administrative expense 4,019 2,385 1,360 2,878 614 12,003 23,259

Indefinite suspension charges — 405 — — — — 405

Other operating expense, net (c)

240 360 14 471 — 14,398 15,483

Operating income (loss) $ 31,276 $ ( 12,725 ) $ 1,744 $ ( 1,650 ) $ ( 7,145 ) $ ( 26,593 ) $ ( 15,093 )

Total depreciation and amortization $ 14,852 $ 9,750 $ 481 $ 5,252 $ 575 $ 341 $ 31,251

Rayonier Advanced Materials Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

Three Months Ended March 30, 2024

Cellulose Specialties Cellulose Commodities Biomaterials Paperboard High-Yield Pulp Corporate (a) and Eliminations

Net sales $ 206,359 $ 94,266 $ 6,787 $ 52,960 $ 34,326 $ ( 7,042 ) $ 387,656

(a) Includes sales of bioelectricity, lignosulfonates and other by-products to third parties.

Operating income (loss) by segment was comprised of the following:

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

High Purity Cellulose $ ( 5,688 ) $ ( 5,547 ) $ 45,215 $ 6,965

Paperboard 6,890 13,088 26,999 28,680

High-Yield Pulp 294 ( 6,062 ) 436 2,030

Corporate ( 18,296 ) ( 15,919 ) ( 44,178 ) ( 41,977 )

Cost of sales

Key input costs (wood, chemicals, energy) 87,190 50,418 1,097 27,113 18,759 ( 6,594 ) 177,983

Freight 9,783 7,438 877 4,605 6,017 — 28,720

Depreciation and amortization 17,048 11,506 94 1,406 582 — 30,636

Fixed and other general costs (b)

51,475 41,748 2,731 9,509 8,831 ( 738 ) 113,556

Total cost of sales 165,496 111,110 4,799 42,633 34,189 ( 7,332 ) 350,895

Selling, general and administrative expense 2,663 2,285 279 2,418 808 12,622 21,075

Other operating (income) expense, net (c)

52 8 ( 21 ) — — ( 1,428 ) ( 1,389 )

Operating income (loss) $ 38,148 $ ( 19,137 ) $ 1,730 $ 7,909 $ ( 671 ) $ ( 10,904 ) $ 17,075

Total depreciation and amortization $ 17,260 $ 11,694 $ 94 $ 3,230 $ 556 $ 449 $ 33,283

(a) Includes ERP and certain lease expense shared across operating segments.

(b) Includes salaries, wages and benefits, maintenance costs and other costs of sales.

(c) Primarily includes foreign exchange gain (loss), environmental remediation expense, gain (loss) on disposal of property, plant and equipment and income (loss) from equity method investments.

Due to their integrated nature, certain operating and production assets are jointly utilized across the Cellulose Specialties and Cellulose Commodities segments.

These assets are essential for the production processes of both types of products and are not directly attributable to either segment.

As such, direct allocation to a specific segment is not feasible or prudent and they are considered shared assets.

The Company allocates related fixed, maintenance and other costs based on a rational and consistent approach that reflects the segments’ contribution, usage and economic benefit derived from the shared assets in the production process, which varies from period to period between specialties and commodities products.

Identifiable assets by segment were as follows:

September 28, 2024 December 31, 2023

High Purity Cellulose $ 1,501,493 $ 1,510,076

March 29, 2025 December 31, 2024

Cellulose Specialties $ 182,785 $ 214,659

Cellulose Commodities 174,358 187,996

Biomaterials 82,919 78,006

Paperboard 91,170 93,600

High-Yield Pulp 46,811 49,798

Corporate (a)

Shared/Corporate (a)

1,539,488 1,505,597

Total assets $ 2,117,531 $ 2,129,657

(a) Includes ERP and certain lease assets shared across segments.

(a) At March 29, 2025 and December 31, 2024, includes $ 1.1 billion and $ 1.0 billion, respectively, of assets shared by Cellulose Specialties and Cellulose Commodities.

Corporate includes ERP and certain other operating and lease assets shared across segments.

Capital additions by segment were as follows:

Three Months Ended

March 29, 2025 March 30, 2024

Cellulose Specialties $ — $ —

Cellulose Commodities 413 2,687

Biomaterials 587 6,375

Paperboard 1,280 269

High-Yield Pulp 965 613

Shared/Corporate (a)

31,600 11,128

Total capital additions (b)

$ 34,845 $ 21,072

(a) Includes $ 30 million and $ 8 million of asset additions during the three months ended March 29, 2025 and March 30, 2024, respectively, that are shared by Cellulose Specialties and Cellulose Commodities.

Corporate includes capital additions for ERP and certain other operational assets shared across segments.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

(b) Amounts exclude the impact of changes in capital assets purchased on account and government grants.

Commitments and Contingencies

The Company had no material changes to the purchase obligations presented in its 2023 Form 10-K during the nine months ended September 28, 2024.

The Company had no material changes outside the ordinary course of business to the purchase obligations presented in its 2024 Form 10-K during the three months ended March 29, 2025.

The Company’s purchase obligations primarily consist of commitments for the purchase of natural gas, electricity and wood chips.

The Company remains subject to purchase obligations under the 20-year wood chip and residual fiber supply agreement with GreenFirst, under which total required purchase volumes of wood chips and residual fiber are dependent on sawmill production.

In connection with the indefinite suspension of operations at the Temiscaming High Purity Cellulose plant, GreenFirst and the Company have agreed that the Company will purchase the required volumes at market value and sell them to third parties at the same amount for an expected neutral impact.

The Company leases certain buildings, machinery and equipment under various operating and finance leases.

1 unchanged sentence

Litigation and Contingencies

Duties on Canadian Softwood Lumber Sold to the U.S.

The Company previously operated six softwood lumber mills in Ontario and Quebec, Canada, and exported softwood lumber into the U.S.

from Canada .

In connection with these exports, the Company paid approximately $ 112 million of softwood lumber duties between 2017 and August 2021, including $ 1 million of ancillary fees, which were recorded as expense in the periods incurred.

As part of the sale of its lumber assets in 2021, the Company retained all refund rights and obligations to softwood duties generated or incurred through the closing date of the sale.

As of December 31, 2023 , the Company had a $ 40 million long-term receivable associated with USDOC determinations of the revised duty rates for 2017 through 2021.

In addition to the above, the Company is engaged in various legal and regulatory actions and proceedings and has been named as a defendant in various lawsuits and claims arising in the ordinary course of business.

The Company is engaged in various legal and regulatory actions and proceedings and has been named as a defendant in various lawsuits and claims arising in the ordinary course of business.

While the Company has procured reasonable and customary insurance covering risks normally occurring in connection with its business, the Company has, in certain cases, retained some risk through the operation of self-insurance, primarily in the areas of workers’ compensation, property insurance, business interruption and general liability.

2 unchanged sentences

The Company provides financial guarantees as required by creditors, insurance programs and various governmental agencies.

As of September 28, 2024, the Company had net exposure of $ 37 million from various standby letters of credit, primarily for financial assurance relating to environmental remediation, credit support for natural gas and electricity purchases and guarantees related to foreign retirement plan obligations.

As of March 29, 2025, the Company had net exposure of $ 29 million from various standby letters of credit, primarily for financial assurance relating to environmental remediation, credit support for natural gas and electricity purchases and guarantees related to foreign retirement plan obligations.

These standby letters of credit represent a contingent liability;

1 unchanged sentence

The standby letters of credit have various expiration dates and are expected to be renewed as required.

The Company had surety bonds of $ 89 million as of September 28, 2024, primarily to comply with financial assurance requirements relating to environmental remediation and post-closure care, to provide collateral for the Company’s workers’ compensation program and to guarantee taxes and duties for products shipped internationally.

The Company had surety bonds of $ 92 million as of March 29, 2025, primarily to comply with financial assurance requirements relating to environmental remediation and post-closure care, to provide collateral for the Company’s workers’ compensation program and to guarantee taxes and duties for products shipped internationally.

These surety bonds expire at various dates and are expected to be renewed annually as required.

1 unchanged sentence

The Company is a guarantor of LTF’s financing agreements and, in the event of default, expects it would only be liable for its proportional share of any repayment under the agreements.

The Company’s proportion of the LTF financing agreement guarantee was $ 28 million at September 28, 2024.

Rayonier Advanced Materials Inc.

Notes to Consolidated Financial Statements (Unaudited)

(in thousands unless otherwise stated)

The Company has not recorded any liabilities for these financial guarantees in its consolidated balance sheets, either because the Company has recorded the underlying liability associated with the guarantee or the guarantee is dependent on the Company’s own performance and, therefore, is not subject to the measurement requirements or because the Company has calculated the estimated fair value of the guarantee and determined it to be immaterial based upon the current facts and circumstances that would trigger a payment obligation.

The Company’s proportion of the LTF financing agreement guarantee was $ 25 million at March 29, 2025.

The Company has not recorded any liabilities for these financial guarantees in its condensed consolidated balance sheets, either because the Company has recorded the underlying liability associated with the guarantee or the guarantee is dependent on the Company’s own performance and, therefore, is not subject to the measurement requirements or because the Company has calculated the estimated fair value of the guarantee and determined it to be immaterial based upon the current facts and circumstances that would trigger a payment obligation.

It is not possible to determine the maximum potential amount of liability under these potential obligations due to the unique set of facts and circumstances likely to be involved with each provision.

In April 2024, collective bargaining agreements covering approximately 225 unionized employees at the Fernandina plant expired.

The employees continued to work under the terms of the expired contracts until negotiations concluded in the third quarter of 2024 and final agreements with the union were reached.

As of September 28, 2024, all of the Company’s collective bargaining agreements covering its unionized employees were current.

As of March 29, 2025, all of the Company’s collective bargaining agreements covering its unionized employees were current.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements