Rayonier Advanced Materials Inc. recently reported a net loss for the fourth quarter ended December 31, 2014 of $23 million, or $(0.55) per share. Excluding environmental, separation and legal costs, fourth quarter pro forma net income was $26 million, or $0.61 per share, compared to $53 million, or $1.25 per share, in the prior year period (see Environmental Reserves Adjustment section below).
For the full year, the Company reported net income of $32 million, or $0.75 per share. Excluding environmental, separation and legal costs, full year pro forma net income was $106 million, or $2.51 per share, compared to $205 million, or $4.86 per share, in 2013.
“As expected, market conditions remained challenging in the fourth quarter of 2014,” said Paul Boynton, Chairman, President and Chief Executive Officer. “Throughout the year, cellulose specialties markets were oversupplied and global demand decelerated. To offset some of the impact from the resulting lower prices, we focused our efforts on reducing costs and improving our operating efficiencies. Consequently, in spite of experiencing higher than anticipated costs in the second half of the year, we were able to achieve the full year guidance provided in July.”
In the fourth quarter of 2014, sales were $248 million compared to $282 million in the prior year period. The $34 million decline was primarily due to lower cellulose specialties sales prices.
The Company incurred an operating loss of $28 million for the fourth quarter. Excluding environmental, separation and legal costs, pro forma operating income was $47 million, $26 million below fourth quarter 2013 pro forma results of $73 million, largely due to lower cellulose specialties prices.
For the full year, sales were $958 million in 2014 and $1,047 million in 2013. The $89 million decrease is primarily due to an 8 percent decline in cellulose specialties prices. Cellulose specialties volumes of 479,000 tons were comparable to 2013 volumes of 486,000 with the difference due to the timing of customer receipt of shipments.
Full year operating income was $63 million and $289 million for 2014 and 2013, respectively. Excluding environmental, separation and legal costs, pro forma operating income was $181 million and $295 million for 2014 and 2013, respectively. The decline was primarily due to lower cellulose specialties prices and higher input costs.