On August 4, Rayonier Advanced Materials (NYSE:RYAM) reported second-quarter results for the period ended June 27, and the numbers finally moved in the right direction. Net sales climbed to $376 million, up 18% from the first quarter and 11% higher than a year earlier, while the loss from continuing operations narrowed to $33 million from $81 million just three months prior. New CEO Daniel Krawczyk used the results to reinforce a promise: the strategic review that has hung over the stock will reach a conclusion in the fourth quarter of 2026.
Pricing Power Finally Shows Up
The clearest bright spot sits inside the High Purity Cellulose segment, where Cellulose Specialties pricing rose 21% year over year and 8% sequentially, the product of newly negotiated 2026 supply agreements. That pricing strength, paired with lower wood costs, reduced discretionary spending and improved operating rates, pushed High Purity Cellulose operating income up 45% year over year to $29 million. Adjusted EBITDA from continuing operations followed the same path, climbing to $40 million from just $8 million in the first quarter and up 43% from the prior-year period.
Management says the full-year outlook, including a 2026 target for positive free cash flow, remains intact. Krawczyk has staked his case on the idea that Rayonier Advanced Materials’ Cellulose Specialties franchise carries leading market positions and difficult-to-replicate assets that the market has yet to fully credit. He also pointed to the Altamaha Green Energy project, where Rayonier Advanced Materials holds a capital-light interest through its land and prior investments, as upside that requires no additional cash from the company.
The Volume Trade-Off Bites Back
That pricing gain came with a trade-off. Cellulose Specialties sales volume fell 23% year over year as the company executed what it calls its CS leadership initiatives, and Rayonier Advanced Materials leaned harder on cellulose commodities production instead, where volume jumped 94% even as average pricing there fell 11%. The Paperboard & High Yield Pulp segment moved in the opposite direction entirely. Its operating loss widened 286% year over year, weighed down by a $13 million non-cash impairment on high yield pulp assets, a planned maintenance outage, and price declines of 9% in paperboard and 4% in high yield pulp.
New paperboard capacity that started up in the US in mid-2025 has intensified competition, and Asia’s domestic high-yield pulp market remains oversupplied. None of this sits on a clean balance sheet. Rayonier Advanced Materials ended the quarter with a consolidated net secured leverage ratio of 4.2 times covenant EBITDA and $145 million of total liquidity, only $57 million of which was cash on hand. The strategic review meant to resolve much of this uncertainty still has no announced outcome, with the company now targeting the fourth quarter of 2026 to communicate a path forward.
What The Market Sees Now
Hedge fund ownership rose to 33 funds from 27 in the prior quarter, a sign institutional conviction is building even before the strategic review concludes. Short interest sits at 6.62% of float, pointing to a real but not overwhelming bear camp. The stock trades at a forward P/E of just 7.41 as of September 10, a multiple that assumes little of the turnaround management is describing. That combination sets up outsized stock moves once the review outcome is known.
Waiting On The Fourth Quarter
Rayonier Advanced Materials’ second quarter shows pricing discipline working in Cellulose Specialties while the paperboard and pulp businesses still fight softer demand and heavier competition. The fourth-quarter target for concluding the strategic review is the event most likely to decide which of those forces ends up defining the stock. Cellulose Specialties pricing gains would need to hold even with volumes running lower and leverage still elevated at 4.2 times covenant EBITDA.
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