RYAM: New CEO, Strategic Review, and the Nitrocellulose-Defense Optionality

A mixed quarter with strong pricing momentum, but the balance sheet and strategic outcome loom large.

RYAM · Earnings Call · 2026-08-05

A New Chapter Under a New CEO

Dan Krawczyk stepped into the CEO role in the middle of a strategic review process, and he used his first earnings call to dispel any doubt about the company's commitment to exploring all options.

The comprehensive review of strategic alternatives remains a top priority for RYAM. It's active, it's progressing with urgency and discipline, and it's focused on evaluating the full range of strategic and financial alternatives available to the company to determine the path forward that best maximizes value for the shareholders.
Daniel Krawczyk, President and Chief Executive Officer · 2026-08-05

He emphasized that his appointment does not alter or narrow the process, but rather brings an operational lens and transaction experience to a clear mandate.

Operational Momentum and Pricing Power

The second quarter showed tangible improvement: net sales rose to $376M, up 18% sequentially, and adjusted EBITDA nearly quintupled from Q1 to $40M. The High Purity Cellulose segment was the standout, with “CS pricing increased 8% sequentially and 21% year-over-year” — Marcus Moeltner, Unknown - likely senior executive or CFO based on financial discussion · 2026-08-05 while sales volumes improved 19% from Q1. Marcus Moeltner attributed the gains to a mix of higher-value CS grades, customer mix, and pricing discussions. On the full-year outlook, he noted, “Our line of sight on volumes for the back half, I think is something in the range of 10% to 15% improvement on volumes and continuing to carry a nice customer and product mix.” — Marcus Moeltner, Unknown - likely senior executive or CFO based on financial discussion · 2026-08-05 This momentum is critical for the company's target of generating positive free cash flow in 2026, a goal that would help position RYAM for refinancing its debt in 2027.

Trade Actions as a Catalyst

A major theme this quarter was the evolving trade landscape. The USTR announced final Section 301 actions imposing a 37.5% tariff on Brazilian wood pulp and 12.5% on Norwegian imports, alongside active antidumping and countervailing duty cases. Dan Krawczyk stated, “If sustained, these actions would provide fair, more competitive conditions for qualified U.S. suppliers, including acetate and other Cellulose Specialty applications.” — Daniel Krawczyk, President and Chief Executive Officer · 2026-08-05 However, he also flagged the risk to paperboard from newly announced tariffs on certain Canadian-sourced products, noting that 75% of paperboard volume is sold into the U.S. In the prior quarter, Scott Sutton had discussed the need to recapture value lost to inflation, saying, “since 2014, the inflation has increased 35% more than the average pricing for our CS products.” — De Lyle Bloomquist, President and CEO · 2025-11-05 These trade actions could be the mechanism to close that gap.

Opportunities and Overhangs

Beyond the strategic review, the company is leaning into new growth vectors. Krawczyk highlighted nitrocellulose as a "unique position" as the sole remaining U.S. supplier of dissolving wood pulp for nitrocellulose applications. “It's a mission-critical feedstock for defense and energetics applications... critical to RYAM, critical to U.S. and critical to NATO.” — Daniel Krawczyk, President and Chief Executive Officer · 2026-08-05 New product development in paperboard (freezer board, oil-and-grease-resistant board) and high-yield pulp (softwood rolls) is also expected to contribute in the back half. Meanwhile, the company maintains a capital-light interest in the Altamaha Green Energy project, preserving upside without additional cash equity. Still, the balance sheet remains stretched. As of the end of the quarter, Effective net cash was -$668M, and net secured leverage stood at 4.2x covenant EBITDA, just under the 4.75x test. The company is counting on improved performance and free cash flow to prepare for a refinancing, but end market challenges and cash generation uncertainty temper the optimism. The commercial execution and operational improvements are expected to sustain momentum, but the outcome of the strategic review remains the pivotal event.