Rayonier Advanced Materials Inc. (NYSE:RYAM) Q4 2017 Earnings Conference Call Transcript

Feb 20, 2018 • 10:00 am ET


Rayonier Advanced Materials Inc. (NYSE:RYAM) Q4 2017 Earnings Conference Call Transcript


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Paul Boynton

of delivering $15 million of EBITDA growth by 2020.

Our fourth strategic pillar is focused on delivering a disciplined capital allocation strategy centered on maximizing our risk-adjusted return on capital as outlined on Slide 20. Within this framework, our first priority is to delever our balance sheet in order to reach our target net leverage ratio of 2.5x EBITDA over time. Beyond delevering, we will also allocate capital towards growth CapEx, acquisitions and other investments that complement our core business as well as return capital to shareholders through buybacks and dividends as appropriate.

As outlined on Slide 21, we are currently reviewing approximately $90 million of high-return capital projects, which are focused primarily on our high-purity and forest product segments. We view these projects as relatively low risk with payback periods averaging less than 2 years. As part of our evaluation process, we are focusing on those projects that have the strongest returns and that strengthen our position in our core markets. Given the strong return potential that we see, investment in these projects is the first priority for our excess free cash flow, along with repaying debt.

As part of a disciplined and balanced capital allocation strategy, we remain committed to returning cast our shareholders through our current $0.07 per share quarterly dividend, which we review each quarter. Additionally, our Board of Directors authorized a $100 million share buyback on January 29, as highlighted on Slide 22. While we do not expect to immediately use this authorization, we believe this provides another option to maximize long-term shareholder value as we execute on disciplined and balanced capital allocation strategy. To conclude, our acquisition of Tembec is a transformational event that will provide a significant opportunity to grow the earnings power and cash flow of the company.

Thank you again for your time this morning. Operator, please go ahead and open up the call for questions.