Rayonier Advanced Materials Inc.

Good morning and welcome to the RIAM Fourth Quarter 2025 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open to questions with instructions to follow at that time. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mickey Walsh, Treasurer and Vice President of Investor Relations. Thank you, Mr. Walsh. You may begin.

Thank you and good morning. Welcome again to RIAM's fourth quarter 2025 earnings conference call. Joining me today are Scott Sutton, our president and CEO, and Marcus Moltner, our CFO and senior vice president of finance. Last evening, we released our earnings report and accompanying presentation materials, which are available on our website at RIAM.com. These materials provide key insights into our financial performance and strategic directions. During today's discussion, we may make forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. These risks are outlined in our earnings release, FDC filings, and on slide two of the presentation. We will also reference certain non-GAAP financial measures to offer perspective on our operational performance. Reconciliation to the most comparable GAAP measures can be found in our presentation on slides 21 through 24. We appreciate your participation today and your ongoing interest in RIAM. I'll now turn the call over to Scott.

Yeah, thanks, Mickey. Good morning, everyone, and thank you for joining us. Since stepping into this role, I've interfaced with many RIAM employees and visited every site. And I'll start with three things. First, I mean, what a great team we have. I am quite lucky to have the opportunity to hold hands with the RIAM employees and make us the absolute leader in cellulose and derivatives. Second, we have exceptional capabilities and adaptability to produce the broadest portfolio of cellulose products. Third, we have urgent work to do to get out of the ditch. I'm going to keep my prepared remarks focused on slides number four through number seven. And as you can see on slide number four, Our free cash flow in 2025 was negative 88 million US dollars. And we also carry plenty of high cost debt. That combination is not sustainable. So priority one on slide number five is simple. Deliver positive free cash flow in 2026. Every group in the company is executing on priority one as a mission critical activity. We are not just aiming to get out of the ditch. We are aiming to exit 2026 with significant momentum, with a heavy focus on execution. That brings me to priority two. Assert our leadership and lift our value equation in cellulose specialties. We're making great progress. 85% of the specialties business is now arranged at an average price increase of 18% over 2025 with expected volume loss of about 20% compared with 2025. The other 15% is still in discussion and may not be decided until the back half of this year. If we are successful in those discussions, the remaining 15% will only come at an average price increase significantly higher than the 18% level. A great characteristic of RIAM is that everyone wants to contribute to our success, and that shows up in priority number three. You should expect every business to improve EBITDA in 2026 relative to 2025 through a broad playbook of leadership initiatives, active portfolio management, in other words, leveling up and leveling down market segment categories to maximize contribution profit, and new product commercializations across the portfolio shown on slide number six. Slide number six shows the new product work across the company. The point is that one business does not carry the load. The point is that we have multiple levers and we expect every business to take a step forward. We will execute our way to the outcome shown on slide number seven. The summary is, Every business improves EBITDA over 2025. We bridge a near zero EBITDA first quarter as our leadership initiative kicks in, and we deliver a full year EBITDA substantially better than 2025, along with solid positive free cash flow. And we intend to hit 2027 running hard. That's the plan, and it's what we're executing right now. So operator, please open the call for questions.