Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with our Financial Statements, the notes thereto, and the financial information appearing elsewhere in this 2025 Form 10-K. The following discussion includes forward-looking statements that involve certain risks and uncertainties. See Forward-Looking Statements and Item 1A—Risk Factors in this 2025 Form 10-K.
This section primarily discusses 2025 and 2024 items and comparisons between these years, with the exception of our “Operating Results by Segment,” which has been recast in line with our new segment reporting structure for all periods presented. For a discussion of all other year-over-year comparisons between 2024 and 2023 and other financial information related to 2023 that is not included in this 2025 Form 10-K, refer to Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 6, 2025.
Overview of Operations
We are a diversified global leader of cellulose-based technologies, operating in the following segments:
• Cellulose Specialties
• Biomaterials
• Cellulose Commodities
• Paperboard
• High-Yield Pulp
Prior to 2025, the Cellulose Specialties, Biomaterials and Cellulose Commodities operating segments were reported as a single segment, High Purity Cellulose. In the first quarter of 2025, we determined that the performance and outlook of the High Purity Cellulose business would be better managed as three separate businesses. Prior period segment results have been recast to align with this new segment reporting structure. No changes were made to the composition of the Paperboard and High-Yield Pulp operating segments. See Note 22—Segment and Geographical Information to our Financial Statements for further information.
In January 2026, we appointed a new CEO who also assumed the role of CODM. Operating segments are determined based on how the CODM reviews and evaluates company operations for purposes of assessing performance and allocating resources. As a result of this leadership transition, we will evaluate whether any changes to our reportable segment structure are required in 2026.
Cellulose Specialties
We are the leading global producer of cellulose specialties, which are primarily used in dissolving chemical applications that require a highly purified form of cellulose, including liquid crystal displays, filters, textiles and performance additives for pharmaceutical, food and other industrial applications. Pricing for our cellulose specialties products is typically set by contract for at least one year, based on negotiations with customers. Key input costs — wood, chemicals and energy — represent approximately 45 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
Biomaterials
Our specialized assets also produce biomaterials, including biofuels, lignosulfonates, tall oil soap, HCE and turpentine. Sales of lignin, a by-product of our manufacturing process, are also included in the Biomaterials operating segment. Commercial sales of our wood-based 2G bioethanol fuel are in accordance with a long-term offtake agreement with a large international petrochemicals company. Pricing for the other biomaterials that we currently produce is based on the market dynamics of supply and demand. Key input costs — chemicals and energy — represent approximately 30 percent of our cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
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Cellulose Commodities
Our Cellulose Commodities products are primarily used for absorbent materials and viscose applications. Absorbent materials, typically referred to as fluff, are used as an absorbent medium in consumer products. Commodity viscose is a raw material required for the manufacture of viscose staple fibers, which are used in woven and non-woven applications. Pricing for commodity products is typically referenced to published indices or based on publicly available spot market prices. Key input costs — wood, chemicals and energy — represent approximately 40 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
Cellulose Production Facilities
Our three operating production facilities, located in the U.S., Canada and France, have a combined annual production capacity of 885,000 MTs of cellulose specialties and commodities products, excluding the 140,000 MTs capacity of the Temiscaming cellulose plant whose operations were indefinitely suspended in July 2024 and permanently ceased DWP production in the first quarter of 2026. Of our total annual capacity, we dedicate 270,000 MTs of annual production to commodities products, primarily fluff. We can shift our cellulose manufacturing assets from cellulose specialties production to cellulose commodity fluff and viscose production. Our operating lines fluctuate the production of cellulose specialties and commodities products based on market conditions and to generate the most attractive margins. Our Tartas cellulose plant and Temiscaming cellulose plant (when operating) also produce bio-generated electricity utilizing renewable biomass. See Note 3—Indefinite Suspension of Operations to our Financial Statements for further information regarding the indefinite suspension of Temiscaming cellulose operations.
Paperboard
We manufacture Kallima ® Coated Cover Paperboard that is used for packaging, printing documents, brochures, promotional materials, paperback book and catalog covers, file folders, tags and lottery tickets. Pricing for paperboard is typically referenced to published indices and marketed through our internal sales team. Our production facility, located in Canada, has an annual production capacity of 180,000 MTs of paperboard. Key input costs — wood pulp, chemicals and energy — represent approximately 50 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
High-Yield Pulp
We manufacture high-yield pulp, which paper manufacturers use to produce paperboard, packaging, coated and uncoated printing and writing paper, specialty papers and various other paper products. Pricing for high-yield pulp is typically referenced to published indices marketed through our internal sales team. Our production facility in Temiscaming has an annual production capacity of 290,000 MTs of high-yield pulp. Key input costs — wood, chemicals and energy — represent approximately 35 percent of our per MT cost of sales. Transportation, depreciation, labor, maintenance and other manufacturing fixed costs represent our remaining cost of sales.
Recent Business Developments
• In August 2025, RYAM and USW jointly filed petitions with the USITC and the USDOC alleging that Brazilian and Norwegian producers of HPDP are selling into the U.S. market at unfairly low prices or with the benefit of government subsidies, causing material injury to the U.S. HPDP industry and its workers. In September 2025, the USITC issued an affirmative injury determination, advancing the case to the USDOC, where preliminary determinations are expected in the first half of 2026. The USITC’s decision represents an important step toward restoring fair competition in the U.S. market and promoting greater pricing stability going forward.
• In October 2025, we expanded our Kallima® portfolio with the introduction of an enhanced freezer application for folding carton board. This innovation comes as the frozen food market continues to grow worldwide, driven by consumer demand for convenience and extended shelf life. With the Enhanced Freezer Application, RYAM provides packaging manufacturers with a solution that safeguards product integrity while delivering on sustainability and operational efficiency.
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Business Outlook
2025 was a challenging year for RYAM, with results impacted by various disruptions and a difficult demand environment. As we enter 2026, our message is simple: restore positive free cash flow and sharpen the organization’s focus on disciplined execution.
In 2026, our priorities are clear:
• Deliver positive free cash flow and exit 2026 with building momentum
• Assert our leadership in Cellulose Specialties
• Drive year-over-year EBITDA improvement across every business
Our outlook is directional and centered on execution, cash discipline and measurable improvement across the portfolio.
Cellulose Specialties
We expect improvement to be driven by disciplined commercial execution, including pricing actions that reflect the value of our products. Volumes are expected to be pressured early in 2026 as customers adjust ordering and inventory positions, with improvement building as the year progresses. The focus remains on execution, service and cash conversion.
Biomaterials
Our near-term focus is operational execution to support improved feedstock availability and stable performance at our existing bioethanol operations. We will continue to evaluate additional Biomaterials projects with a disciplined lens on returns and execution risk.
Cellulose Commodities
Market conditions remain challenging, particularly in fluff, with continued weakness tied to China dynamics. We will continue to run the business with a focus on reliability, cost control and disciplined working capital, while navigating demand variability across commodity grades. We will also look to drive incremental value where we have the ability to do so, including through pricing, mix and commercial actions across the commodity portfolio.
Paperboard
We expect year-over-year improvement to be supported by new product commercialization and volume increases, with pricing stabilizing as supply and demand dynamics improve, alongside continued operational and cost discipline.
High-Yield Pulp
We expect year-over-year improvement to be supported by new product commercialization, with these products carrying premium pricing as we expand into higher-value end markets.
Corporate / Other
We will maintain strict control of discretionary spending and continue driving structural efficiencies, with a focus on supporting cash generation and execution across the businesses.
Capital allocation
We remain committed to disciplined capital allocation and liquidity management. We will prioritize and reduce capital expenditures with a focus on near-term cash generation and deleveraging and will continue to evaluate capital return options within our capital allocation framework as performance and financial flexibility improve.
See Performance and Liquidity Indicators below for a discussion of non-GAAP financial measures.
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Results of Operations
Year Ended December 31,
(in millions, except percentages)
Net sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Foreign exchange gain (loss)
Asset impairment
Indefinite suspension charges
Other operating income (expense), net
Operating income (loss)
Interest expense
Components of pension and OPEB, excluding service costs
Debt refinancing charges
Other income (expense), net
Loss from continuing operations before income tax
Income tax (expense) benefit
Equity in loss of equity method investments
Loss from continuing operations
Income from discontinued operations, net of tax
Net loss
Net income attributable to redeemable noncontrolling interest
Net loss attributable to RYAM
Gross margin %
Operating margin %
Effective tax rate
Net Sales
Year Ended December 31,
(in millions)
Cellulose Specialties
Biomaterials
Cellulose Commodities
Paperboard
High-Yield Pulp
Eliminations
Net sales
2025 versus 2024
Net sales decreased $164 million, or 10 percent, in 2025 compared to 2024 driven by lower average sales prices in our Paperboard and High-Yield Pulp operating segments and lower sales volumes across all segments that were largely a response to imposed tariffs, lower Temiscaming sales in 2025 due to the indefinite suspension of cellulose operations, increased competitive activity, operational challenges in 2025 and labor strikes at the Tartas cellulose plant in 2025. These decreases were partially offset by higher average sales prices in our Cellulose Specialties and Cellulose Commodities operating segments that were driven by negotiated price increases and sales mix.
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2024 versus 2023
Net sales decreased $13 million, or 1 percent, in 2024 compared to 2023 driven by lower average sales prices in our Cellulose Commodities, Paperboard and High-Yield Pulp operating segments and lower sales volumes in our Cellulose Commodities operating segment, partially offset by higher average sales price and sales volumes in our Cellulose Specialties operating segment and higher sales volumes in our Paperboard operating segment. See Operating Results by Segment below for further discussion.
See Operating Results by Segment below for further discussion.
Operating Income (Loss)
Year Ended December 31,
(in millions)
Cellulose Specialties
Biomaterials
Cellulose Commodities
Paperboard
High-Yield Pulp
Corporate
Operating income (loss)
2025 versus 2024
Operating income declined $35 million, or 90 percent, in 2025 compared to 2024 driven by the decrease in net sales, higher operating costs due to lower production efficiency that resulted from operational challenges at several of our plants, national labor strikes at the Tartas cellulose plant and significant market-driven downtime, a $12 million non-cash environmental reserves charge in the first quarter of 2025, unfavorable foreign exchange rates and the 2024 recognition of $10 million in CEWS benefit claims. Partially offsetting these declines were the 2024 non-cash asset impairment of $25 million and one-time charges of $17 million related to the indefinite suspension of Temiscaming cellulose operations, lower costs due to the indefinite suspension, lower variable compensation costs and 2024 repair costs related to the fire at our Jesup plant.
2024 versus 2023
Operating results improved $104 million, or 160 percent, in 2024 compared to 2023 driven by the 2023 non-cash impairment of $62 million recorded as a result of the optimization and realignment of our cellulose plant assets, lower costs due to the indefinite suspension of Temiscaming cellulose operations, cost benefit from strategic capital investment, favorable foreign exchange rates in 2024 compared to unfavorable rates in 2023 and the 2024 recognition of $10 million in CEWS benefit claims. Partially offsetting these improvements were the decrease in net sales, the 2024 non-cash impairment of $25 million and one-time charges of $17 million related to the indefinite suspension of Temiscaming cellulose operations, higher variable and other compensation expense, the 2023 recognition of a $3 million benefit from payroll tax credit carryforwards and 2024 repair costs related to the fire at our Jesup plant.
See Operating Results by Segment below for further discussion.
Non-Operating Income & Expense
Interest ex pense increased $12 million in 2025 compared to 2024 primarily driven by an increase in the average effective interest rate on debt.
Foreign exchange rate fluctuations resulted in a $4 million unfavorable impact in 2025 compared to 2024.
Also included in our non-operating results were 2025 charges of $3 million related to our discontinued involvement in the AGE project, a $3 million increase to our liability related to SWEN’s put option fair value remeasurement from 2024 to 2025 and a $2 million pension settlement loss in 2025.
In 2024, we recorded charges of $10 million related to the refinancing of our 2026 Notes and 2027 Term Loan.
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Income Taxes
The effective tax rate on the loss from continuing operations for 2025 was not meaningful as a result of the valuation allowance placed on our Canadian DTAs in the second quarter, which resulted in a $337 million income tax expense recognition. Also driving the difference between the effective tax rate and the federal statutory rate of 21 percent were different statutory tax rates in foreign jurisdictions, valuation allowances on nondeductible U.S. interest expense and U.S. tax credits.
The effective tax rate on the loss from continuing operations for 2024 was a benefit of 18 percent. The 2024 effective tax rate differed from the federal statutory rate of 21 percent primarily due to changes in the valuation allowance on disallowed interest deductions, the release of certain tax reserves, different statutory tax rates in foreign jurisdictions, U.S. tax credits, excess deficit on vested stock compensation and nondeductible executive compensation.
See Note 21—Income Taxes to our Financial Statements for further information.
Discontinued Operations
In 2025, we recorded pre-tax income from discontinued operations of $4 million related to the remaining CEWS benefit claims deferred since 2021.
In 2024, we recorded pre-tax income from discontinued operations of $5 million related to CEWS benefit claims and a pre-tax loss of $1 million on the sale of our softwood lumber duty refund rights.
See Note 4—Discontinued Operations to our Financial Statements for further information.
Operating Results by Segment
Following the indefinite suspension of Temiscaming cellulose operations in the third quarter of 2024, certain infrastructure assets of the site’s cellulose plant continue to run in support of the ongoing energy needs of the Paperboard and High-Yield Pulp operations. As such, beginning in the fourth quarter of 2024, the net impact of the custodial site costs being incurred and the sales of any electricity generated by the running of the cellulose plant assets are reflected within the operating results of the Paperboard and High-Yield Pulp businesses.
Cellulose Specialties
Year Ended December 31,
(in millions, unless otherwise stated)
Net sales
Operating income
Average sales prices ($ per MT)
Sales volumes (thousands of MTs)
Net Sales - 2025 versus 2024
Year Ended December 31, 2024
Changes Attributable to:
Year Ended December 31, 2025
(in millions)
Price
Volume/Mix/Other
Net sales
Net sales of our Cellulose Specialties segment decreased $59 million, or 6 percent, in 2025 compared to 2024 driven by a 10 percent decrease in sales volumes due to larger customer orders in 2024 in advance of the indefinite suspension of Temiscaming cellulose operations. Partially offsetting the sales volume decrease was a 5 percent increase in average sales price, driven by negotiated price increases and sales mix.
Net Sales - 2024 versus 2023
Year Ended December 31, 2023
Changes Attributable to:
Year Ended December 31, 2024
(in millions)
Price
Volume/Mix/Other
Net sales
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Net sales of our Cellulose Specialties segment increased $96 million, or 12 percent, in 2024 compared to 2023 driven by 2 percent and 8 percent increases in average sales price and sales volumes, respectively. The increase in sales volumes was driven by the closure of a competitor’s plant in late 2023, accelerated volumes due to the indefinite suspension of Temiscaming cellulose operations and an uptick in ethers sales volumes, partially offset by a one-time favorable impact in 2023 from a change in customer contract terms.
Operating Income - 2025 versus 2024
Year Ended December 31, 2024
Gross Margin Changes Attributable to:
Year Ended December 31, 2025
(in millions, except percentages)
Sales Price
Sales Volume/Mix/Other (a)
Cost
SG&A and other
Operating income
Operating margin %
(a) Computed based on contribution margin.
Operating income of our Cellulose Specialties segment decreased $23 million, or 13 percent, in 2025 compared to 2024 driven by the lower sales volumes, higher energy and logistics costs, the impact of the timing of planned maintenance outages compared to the prior year, higher operating costs from lower production efficiency resulting from operational challenges and labor strikes at the Tartas cellulose plant and the 2024 recognition of $3 million in CEWS benefit claims. Partially offsetting these decreases were the increase in average sales price and lower costs due to the indefinite suspension of Temiscaming cellulose operations.
Operating Income - 2024 versus 2023
Year Ended December 31, 2023
Gross Margin Changes Attributable to:
Year Ended December 31, 2024
(in millions, except percentages)
Sales Price
Sales Volume/Mix/Other (a)
Cost
SG&A and other
Operating income
Operating margin %
(a) Computed based on contribution margin.
Operating income of our Cellulose Specialties segment increased $75 million, or 69 percent, in 2024 compared to 2023 driven by the higher average sales price and sales volumes, lower costs due to the indefinite suspension of Temiscaming cellulose operations and the 2024 recognition of $3 million in CEWS benefit claims in 2024.
Biomaterials
Year Ended December 31,
(in millions)
Net sales
Operating income
Net Sales
Net sales of our Biomaterials segment increased $1 million, or 3 percent, in 2025 compared to 2024 driven by higher bioethanol sales volumes due to fewer quarters of sales in 2024 following the commencement of production in March 2024, as well as higher sales of turpentine, partially offset by lower lignosulfonates sales volumes due to the indefinite suspension of Temiscaming cellulose operations.
Net sales of our Biomaterials segment increased $1 million, or 3 percent, in 2024 compared to 2023 driven by new bioethanol sales volumes in 2024 following the commencement of production in March 2024 and higher HCE sales, partially offset by lower lignosulfonates sales volumes due to the indefinite suspension of Temiscaming cellulose operations and lower turpentine sales.
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Operating Income
Operating income of our Biomaterials segment was flat comparing 2025 to 2024 as the higher sales were offset by a higher cost mix resulting from a full year of bioethanol production in 2025, the restart of the lignosulfonates powder plant in the first quarter of 2025 and the suspension of Temiscaming lignosulfonates production in the second half of 2024.
Operating income of our Biomaterials segment decreased $4 million, or 40 percent, in 2024 compared to 2023 driven by higher production costs from the startup of the Tartas bioethanol facility, partially offset by the higher sales.
Cellulose Commodities
Year Ended December 31,
(in millions, unless otherwise stated)
Net sales
Operating loss
Average sales prices ($ per MT)
Sales volumes (thousands of MTs)
Net Sales - 2025 versus 2024
Year Ended December 31, 2024
Changes Attributable to:
Year Ended December 31, 2025
(in millions)
Price
Volume/Mix
Net sales
Net sales of our Cellulose Commodities operating segment decreased $42 million, or 12 percent, in 2025 compared to 2024 driven by a 13 percent decrease in sales volumes due to the reduction of Temiscaming sales as a result of the prior year indefinite suspension of operations and lower production levels due to operational challenges, including labor strikes at our Tartas cellulose plant. The lower sales volumes were partially offset by a 4 percent increase in average sales price, driven by higher fluff pricing and sales mix.
Net Sales - 2024 versus 2023
Year Ended December 31, 2023
Changes Attributable to:
Year Ended December 31, 2024
(in millions)
Price
Volume/Mix
Net sales
Net sales of our Cellulose Commodities operating segment decreased $107 million, or 23 percent, in 2024 compared to 2023 driven by 4 percent and 17 percent decreases in average sales price and sales volumes, respectively. The decrease in sales volumes was primarily due to a higher mix of cellulose specialties production and the indefinite suspension of Temiscaming cellulose operations.
Operating Loss - 2025 versus 2024
Year Ended December 31, 2024
Gross Margin Changes Attributable to:
Year Ended December 31, 2025
(in millions, except percentages)
Sales Price
Sales Volume/ Mix (a)
Cost
SG&A and other
Operating loss
Operating margin %
(a) Computed based on contribution margin.
Operating loss of our Cellulose Commodities operating segment improved $58 million, or 51 percent, in 2025 compared to 2024 driven by a $25 million non-cash asset impairment and $17 million in one-time charges recorded in 2024 related to the indefinite suspension of Temiscaming cellulose operations. Also contributing to the improvement were the higher average sales price, lower wood and chemicals costs and lower costs due to the indefinite suspension of Temiscaming cellulose operations. Partially offsetting these improvements were lower sales volumes, higher energy and logistics costs, higher operating costs from lower production efficiency resulting from operational challenges and labor strikes at the Tartas cellulose plant and the 2024 recognition of $2 million in CEWS benefit claims.
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Operating Loss - 2024 versus 2023
Year Ended December 31, 2023
Gross Margin Changes Attributable to:
Year Ended December 31, 2024
(in millions, except percentages)
Sales Price
Sales Volume/ Mix (a)
Cost
SG&A and other
Operating loss
Operating margin %
(a) Computed based on contribution margin.
Operating loss of our Cellulose Commodities operating segment improved $47 million, or 29 percent, in 2024 compared to 2023 driven by the $62 million non-cash impairment recorded in 2023 as a result of the optimization and realignment of our cellulose plant assets, lower costs due to the indefinite suspension of Temiscaming cellulose operations in 2024 and the 2024 recognition of $2 million in CEWS benefit claims. Partially offsetting these improvements were the $25 million non-cash impairment and $17 million in one-time charges recorded in 2024 related to the indefinite suspension of Temiscaming cellulose operations and the lower average sales price and sales volumes.
Paperboard
Year Ended December 31,
(in millions, unless otherwise stated)
Net sales
Operating income (loss)
Average sales prices ($ per MT)
Sales volumes (thousands of MTs)
Net Sales - 2025 versus 2024
Year Ended December 31, 2024
Changes Attributable to:
Year Ended December 31, 2025
(in millions)
Price
Volume/Mix
Net sales
Net sales of our Paperboard operating segment decreased $49 million, or 21 percent, in 2025 compared to 2024. Average sales price and sales volumes decreased 6 percent and 16 percent, respectively, driven by mix, shifting customer dynamics associated with tariff uncertainty and increased competitive activity due to higher European Union imports and the mid-year startup of new U.S. capacity. Partially offsetting these decreases were higher sales of folding packaging grades as we increased focus on this market segment.
Net Sales - 2024 versus 2023
Year Ended December 31, 2023
Changes Attributable to:
Year Ended December 31, 2024
(in millions)
Price
Volume/Mix
Net sales
Net sales of our Paperboard operating segment increased $9 million, or 4 percent, in 2024 compared to 2023. Sales volumes increased 12 percent driven by the easing of prior year customer destocking in 2024, partially offset by a 7 percent decrease in average sales price driven by mix and increased competitive activity from European imports.
Operating Income (Loss) - 2025 versus 2024
Year Ended December 31, 2024
Gross Margin Changes Attributable to:
Year Ended December 31, 2025
(in millions, except percentages)
Sales Price
Sales Volume/ Mix (a)
Cost
SG&A and other
Operating income (loss)
Operating margin %
(a) Computed based on contribution margin.
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Operating results of our Paperboard operating segment declined $38 million, or 123 percent, in 2025 compared to 2024 driven by the lower average sales price and sales volumes, higher costs due to significant market-driven downtime in the second half of 2025, higher Temiscaming net custodial site costs due to a partial year of costs in 2024, the impact of the timing of planned maintenance outages compared to the prior year, higher logistics costs and the 2024 recognition of $2 million in CEWS benefit claims. These declines were partially offset by lower purchased pulp and energy costs.
Operating Income - 2024 versus 2023
Year Ended December 31, 2023
Gross Margin Changes Attributable to:
Year Ended December 31, 2024
(in millions, except percentages)
Sales Price
Sales Volume/ Mix (a)
Cost
SG&A and other
Operating income
Operating margin %
(a) Computed based on contribution margin.
Operating income of our Paperboard operating segment decreased $6 million, or 16 percent, in 2024 compared to 2023 driven by the lower average sales price, higher labor costs and $3 million of net custodial site costs for Temiscaming site operations, partially offset by the higher sales volumes, higher productivity and the 2024 recognition of $2 million in CEWS benefit claims.
High-Yield Pulp
Year Ended December 31,
(in millions, unless otherwise stated)
Net sales
Operating loss
Average sales prices ($ per MT) (a)
Sales volumes (thousands of MTs) (a)
(a) Average sales prices and sales volumes for external sales only. During the years ended December 31, 2025, 2024 and 2023, the High-Yield Pulp operating segment sold 61,000 MTs, 61,000 MTs and 60,000 MTs of high-yield pulp for $26 million, $27 million and $25 million, respectively, to the Paperboard operating segment.
Net Sales - 2025 versus 2024
Year Ended December 31, 2024
Changes Attributable to:
Year Ended December 31, 2025
(in millions)
Price
Volume/Mix
Net sales
Net sales of our High-Yield Pulp operating segment decreased $15 million, or 12 percent, in 2025 compared to 2024. Average sales price and sales volumes decreased 9 percent and 5 percent, respectively, driven by lower demand, including in China where demand for all grades of market pulp were down, continued oversupply of domestic high-yield pulp in China, increased competitive activity due to the startup of new Indonesian capacity late in 2024 and the timing of shipments, primarily related to shipping challenges to customers in India.
Net Sales - 2024 versus 2023
Year Ended December 31, 2023
Changes Attributable to:
Year Ended December 31, 2024
(in millions)
Price
Volume/Mix
Net sales
Net sales of our High-Yield Pulp operating segment decreased $9 million, or 7 percent, in 2024 compared to 2023 driven by a 9 percent decrease in average sales price and flat sales volumes driven by over-supply in China, lower demand and timing of shipments.
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Operating Loss - 2025 versus 2024
Year Ended December 31, 2024
Gross Margin Changes Attributable to:
Year Ended December 31, 2025
(in millions, except percentages)
Sales Price
Sales Volume/Mix (a)
Cost
SG&A and other
Operating loss
Operating margin %
(a) Computed based on contribution margin.
Operating loss of our High-Yield Pulp operating segment increased $22 million, or 275 percent, in 2025 compared to 2024 driven by the lower average sales price and sales volumes, higher costs due to significant market-driven downtime in the second half of 2025, higher logistics and chemicals costs, higher Temiscaming net custodial site costs due to a partial year of costs in 2024 and the 2024 recognition of $2 million in CEWS benefit claims. These negative impacts were partially offset by lower wood costs.
Operating Loss - 2024 versus 2023
Year Ended December 31, 2023
Gross Margin Changes Attributable to:
Year Ended December 31, 2024
(in millions, except percentages)
Sales Price
Sales Volume/Mix (a)
Cost
SG&A and other
Operating loss
Operating margin %
(a) Computed based on contribution margin.
Operating loss of our High-Yield Pulp operating segment increased $5 million, or 167 percent, in 2024 compared to 2023 driven by the lower sales prices, flat sales volumes, higher labor costs and $4 million of net custodial site costs for Temiscaming site operations, partially offset by lower logistics and key input costs, higher productivity and the 2024 recognition of $2 million in CEWS benefit claims.
Corporate
Year Ended December 31,
(in millions)
Operating loss
Our Corporate operating loss increased $10 million, or 17 percent, in 2025 compared to 2024 driven by first quarter non-cash environmental reserves charges of $12 million and unfavorable foreign exchange rates in 2025 compared to favorable rates in 2024, partially offset by lower variable compensation costs.
Our Corporate operating loss increased $3 million, or 5 percent, in 2024 compared to 2023 driven by higher variable and other compensation costs, higher discounting and financing fees and higher costs related to our ERP transformation project, partially offset by favorable foreign exchange rates in 2024 compared to unfavorable rates in 2023.
Liquidity and Capital Resources
Overview
Cash flows from operations, primarily driven by operating results, have historically been our primary source of liquidity and capital resources. As operating cash flows can be negatively impacted by fluctuations in market prices for our Cellulose Commodities products and changes in demand for our products, we maintain a key focus on cash, managing working capital closely and optimizing the timing and level of our capital expenditures. We believe our future cash flows from operations, availability under our ABL Credit Facility and our ability to access the capital markets, if necessary or desirable, will be adequate to fund our operations and anticipated long-term funding requirements, including capital expenditures, defined benefit plan contributions and repayment of debt maturities.
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Our Board of Directors suspended our quarterly common stock dividend in September 2019. No dividends have been declared since. The declaration and payment of future common stock dividends, if any, will be at the discretion of our Board of Directors and dependent upon our financial condition, results of operations, capital requirements and other factors that the Board of Directors deems relevant. In addition, our debt facilities place limitations on the declaration and payment of future dividends.
In January 2018, our Board of Directors authorized a $100 million common stock share buyback program. We have not repurchased any shares under this program since 2018 and do not expect to utilize any of the remaining $60 million in unused authorization in the future.
Our liquidity and capital resources are summarized below:
December 31,
(in millions, except ratio)
Cash and cash equivalents
Availability under the ABL Credit Facility (a)(b)
Availability under the short-term factoring facility (b)
Total debt (b)
Stockholders’ equity
Total capitalization (total debt plus stockholders’ equity)
Debt to capital ratio
(a) Amounts available under the ABL Credit Facility fluctuate based on eligible accounts receivable and inventory levels. At December 31, 2025, we had $175 million of gross availability and net available borrowings of $72 million after taking into account the facility’s year end balance of $50 million, outstanding letters of credit of $27 million and required availability of $26 million to avoid triggering the facility’s fixed charge coverage ratio covenant.
(b) See Note 10—Debt and Finance Leases to our Financial Statements for further information.
Other Sources of Cash
SWEN Investment
In November 2024, we secured €30 million to be provided by SWEN in return for a 20 percent preferred equity interest in BioNova. We received €15 million from SWEN in 2024. Subsequent funding is contingent on the achievement of certain project milestones. See Note 14—Redeemable Noncontrolling Interest to our Financial Statements for further information.
BioNova Term Loan
In November 2024, we entered into a credit agreement that authorizes up to €37 million in seven- and eight-year secured term loan tranches. As of December 31, 2025, no amounts were yet outstanding on the BioNova Term Loan. See Note 10—Debt and Finance Leases to our Financial Statements for further information.
Cash Requirements
Contractual Commitments
Our principal contractual commitments include standby letters of credit, surety bonds, guarantees, purchase obligations and leases. We utilize arrangements such as standby letters of credit and surety bonds to provide credit support for certain suppliers and vendors in case of their default on critical obligations, collateral for certain of our self-insurance programs and guarantees for the completion of our remediation of environmental liabilities. As part of our ongoing operations, we also periodically issue guarantees to third parties. Our primary purchase obligation payments relate to natural gas, steam energy and wood chips purchase contracts. As of December 31, 2025, our noncancellable unconditional purchase obligations totaled $557 million.
We remain subject to purchase obligations under the 20-year wood chip and residual fiber supply agreement with GreenFirst, under which total required purchase volumes of wood chips and residual fiber are dependent on sawmill production. In connection with the indefinite suspension of operations at the Temiscaming cellulose plant, we have agreed with GreenFirst that we will purchase the required volumes at market value and sell them to third parties at the same amount for an expected neutral impact.
See Note 23—Commitments and Contingencies to our Financial Statements for further information.
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Redeemable Noncontrolling Interest
As mentioned in Other Sources of Cash above, the SWEN investment is a redeemable noncontrolling interest, which may require the use of cash to pay dividends and/or in the event SWEN exercises its put option. The timing and amount of dividend payments or a put payment is dependent on certain terms and conditions and would not occur prior to 2027. See Note 14—Redeemable Noncontrolling Interest to our Financial Statements for further information on the circumstances under which the put may be exercised.
Debt
At December 31, 2025, we had outstanding principal debt of $820 million, $21 million of which is current and $749 million of which does not come due until 2029 or after. S ee Note 10—Debt and Finance Leases to our Financial Statements for a schedule of our debt maturities.
As of December 31, 2025, we were in compliance with all financial and other covenants under our debt agreements.
Cash Flows
Year Ended December 31,
(in millions)
Cash flows provided by (used in):
Operating activities
Investing activities
Financing activities
Cash provided by operating activities decreased $179 million primarily due to the decline in operating results, one-time proceeds of $39 million from the sale of our softwood lumber duty refund rights in 2024 and $19 million in income tax net refunds in 2024 compared to $1 million in net payments in 2025. These outflows were partially offset by positive working capital in 2025 compared to working capital outflows in 2024.
Cash used in investing activities increased $6 million as higher custodial capital spend was partially offset by decreased strategic capital spend and the 2025 proceeds from our insurance claim related to the 2024 fire at our Jesup plant.
Cash inflows from financing activities increased $72 million due to net borrowings of long-term debt in 2025 compared to net repayments in 2024 and 2024 debt issuance costs of $24 million, partially offset by SWEN’s €15 million investment in BioNova in 2024 and higher repurchases of common stock to satisfy tax withholding requirements related to stock-based compensation.
Performance and Liquidity Indicators
The discussion below is presented to enhance the reader’s understanding of our operating performance, liquidity and ability to generate cash and satisfy rating agency and creditor requirements. This information includes the non-GAAP financial measures of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow. These measures are not defined by GAAP and our discussion of them is not intended to conflict with or change any of our GAAP disclosures provided in this Annual Report on Form 10-K.
We believe these non-GAAP financial measures provide useful information to our Board of Directors, management and investors regarding our financial condition and results of operations. Our management uses these non-GAAP financial measures to compare our performance to that of prior periods for trend analyses, to determine management incentive compensation and for budgeting, forecasting and planning purposes. Our management considers these non-GAAP financial measures, in addition to operating income, to be important in estimating our enterprise and stockholder values and for making strategic and operating decisions. In addition, analysts, investors and creditors use these non-GAAP financial measures when analyzing our operating performance, financial condition and cash-generating ability. We use EBITDA and Adjusted EBITDA as performance measures and Adjusted Free Cash Flow as a liquidity measure.
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We do not consider non-GAAP financial measures an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they may exclude significant expense and income items that are required by GAAP to be recognized in our Financial Statements. In addition, they reflect the exercise of management’s judgment about which expense and income items are excluded or included in determining these non-GAAP financial measures. To compensate for these limitations, reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures are provided below. Non-GAAP financial measures are not necessarily indicative of results that may be generated in future periods and should not be relied upon, in whole or part, in evaluating our financial condition, results of operations or future prospects.
EBITDA and Adjusted EBITDA
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for items that management believes are not representative of our core operations.
Income (loss) from continuing operations is reconciled to EBITDA and Adjusted EBITDA from continuing operations by segment, as follows:
(in millions)
Cellulose Specialties
Biomaterials
Cellulose Commodities
Paperboard
High-Yield Pulp
Corporate
Total
Year Ended December 31, 2025
Income (loss) from continuing operations
Income from continuing operations attributable to redeemable noncontrolling interest
Income (loss) from continuing operations attributable to RYAM
Depreciation and amortization
Interest expense, net
Income tax expense
EBITDA-continuing operations attributable to RYAM
Pension settlement loss
Indefinite suspension charges
Adjusted EBITDA-continuing operations attributable to RYAM
(in millions)
Cellulose Specialties
Biomaterials
Cellulose Commodities
Paperboard
High-Yield Pulp
Corporate
Total
Year Ended December 31, 2024
Income (loss) from continuing operations
Income from continuing operations attributable to redeemable noncontrolling interest
Income (loss) from continuing operations attributable to RYAM
Depreciation and amortization
Interest expense, net
Income tax benefit
EBITDA-continuing operations attributable to RYAM
Asset impairment
Indefinite suspension charges
Debt refinancing charges
Adjusted EBITDA-continuing operations attributable to RYAM
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(in millions)
Cellulose Specialties
Biomaterials
Cellulose Commodities
Paperboard
High-Yield Pulp
Corporate
Total
Year Ended December 31, 2023
Income (loss) from continuing operations
Income from continuing operations attributable to redeemable noncontrolling interest
Income (loss) from continuing operations attributable to RYAM
Depreciation and amortization
Interest expense, net
Income tax benefit
EBITDA-continuing operations attributable to RYAM
Asset impairment
Pension settlement loss
Adjusted EBITDA-continuing operations attributable to RYAM
Adjusted Free Cash Flow
Adjusted Free Cash Flow is a non-GAAP financial measure of cash generated during a period that is available for debt reduction, acquisitions and repurchases of our common stock. Adjusted Free Cash Flow is not necessarily indicative of the Adjusted Free Cash Flow that may be generated in future periods.
Beginning in the fourth quarter of 2025, Adjusted Free Cash Flow is defined as cash provided by operating activities adjusted for capital expenditures, net of proceeds from the sale of property, plant and equipment and insurance claims. Adjusted Free Cash Flow for the year ended December 31, 2024 has been recalculated according to this new definition.
Cash provided by operating activities is reconciled to Adjusted Free Cash Flow as follows:
Year Ended December 31,
(in millions)
Cash provided by operating activities
Capital expenditures, net (a)
Adjusted Free Cash Flow
(a) Net of proceeds from the sale of property, plant and equipment and insurance claims. Included in capital expenditures, net were strategic capital expenditures of $25 million, $33 million and $45 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Critical Accounting Estimates
The preparation of financial statements requires us to make estimates, assumptions and judgments that affect our assets, liabilities, revenues and expenses, and to disclose contingent assets and liabilities in our Financial Statements. We base these estimates and assumptions on historical data and trends, current fact patterns, expectations and other sources of information we believe are reasonable. Actual results may differ from these estimates.
Revenue Recognition and Measurement
Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The majority of our contracts have a single performance obligation to transfer products. Accordingly, we recognize revenue when control has been transferred to the customer. Generally, control transfers upon delivery to a location in accordance with the terms and conditions of the sale. Changes in customer contract terms and conditions, as well as the timing of orders and shipments, may impact the timing of revenue recognition.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring our products and is generally based upon contractual arrangements with customers or published indices. We sell our products both directly to customers and through distributors and agents typically under agreements with payment terms less than 90 days.
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The nature of our contracts may give rise to variable consideration, which may be constrained, including sales volume-based rebates to customers. We estimate the level of volumes based on anticipated purchases at the beginning of the period and record a rebate accrual for each purchase toward the requisite rebate volume. These estimated rebates are included in the transaction price as a reduction to net sales.
Property, Plant & Equipmen t
Depreciation
Depreciation expense is computed using the units-of-production method for our Cellulose Specialties, Biomaterials, Cellulose Commodities, Paperboard and High-Yield Pulp production-related plant and equipment, and for all other property, plant and equipment, the straight-line method over the useful economic life of the respective asset. The total units of production used to calculate depreciation expense is determined by factoring annual production days, based on normal production conditions, by the economic useful life of the asset involved. Our estimate of useful lives and salvage values are based on assumptions and judgments that reflect both historical experience and expectations regarding the future use of our assets, including wear and tear, obsolescence, technical standards, market demand and geographic location. The use of different assumptions and judgments in the calculation of depreciation, especially those involving useful lives, would likely result in significantly different net book values and results of operations.
Asset Impairment
Long-lived assets are reviewed annually for impairment or when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets that are held and used is measured by net undiscounted cash flows expected to be generated by the asset. An impairment loss may exist when the estimated recovery value is less than the carrying amount. Should a review for impairment be required, determining whether the carrying amount of an asset is recoverable requires judgments regarding long-term forecasts of future revenue and costs related to the asset subject to review. These forecasts are uncertain, as they require significant assumptions about future market conditions. Significant and unanticipated changes to these assumptions could require a provision for impairment in a future period. Property, plant and equipment are primarily grouped for purposes of evaluating recoverability at the combined plant level, the lowest level for which independent cash flows are identifiable.
In 2024, we indefinitely suspended operations at our Temiscaming cellulose plant. The indefinite suspension does not affect the Temiscaming paperboard and high-yield pulp plants that support our Paperboard and High-Yield Pulp operating segments, which continue to operate at full capacity, subject to market conditions. In the third quarter of 2024, in conjunction with the indefinite suspension of operations, we recognized a non-cash asset impairment of $25 million, as it was determined that the Temiscaming cellulose plant’s net carrying value exceeded its estimated fair value. In the first quarter of 2026, we determined that we will permanently cease DWP production at the site. The accounting impact of this decision is currently being assessed and may result in a non-cash asset impairment in the first quarter.
In the fourth quarter of 2023, we began efforts towards the optimization and realignment of our Cellulose Commodities assets that included the consolidation of commodity viscose production into our Temiscaming plant and fluff production into our Jesup plant’s C Line. This realignment materially impacted the way we have managed and will manage the underlying assets and ultimately led to the recognition of a $62 million impairment.
Our impairment analyses involved various assumptions and estimates in the determination of fair value, the most significant being our estimates of future cash flows, including key assumptions regarding production levels, price levels, profit margins, capital expenditures and discount rate. While the results of the impairment analyses are highly sensitive to these assumptions, we believe the assumptions are reasonable and appropriately supported; however, our operating results could be adversely affected if actual results are not consistent with our estimates and assumptions. See Note 3—Indefinite Suspension of Operations and Note 7—Property, Plant and Equipment, Net to our Financial Statements for further information regarding these impairments.
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Environmental Liabilities
At December 31, 2025, we had $184 million of accrued liabilities for environmental costs relating to disposed operations. Numerous price, quantity, cost and probability assumptions are used in estimating these obligations. Factors affecting these estimates include changes in the nature or extent of contamination, changes in the content or volume of the material discharged or treated in connection with one or more impacted sites, requirements to perform additional or different assessment or remediation, changes in technology that may lead to additional or different environmental remediation strategies, approaches and workplans, discovery of additional or unanticipated contaminated soil, groundwater or sediment on or off-site, changes in remedy selection, changes in law or interpretation of existing law and the outcome of negotiations with governmental agencies or non-governmental parties. We periodically review our environmental liabilities and also engage third-party consultants to assess our ongoing remediation of contaminated sites. We review our environmental liabilities related to assessment activities and remediation costs quarterly and adjust them as necessary. Liabilities for financial assurance, monitoring and maintenance activities and other activities are assessed annually. A significant change in any of these estimates could have a material effect on our results of operations and financial condition. See Note 11—Environmental Liabilities to our Financial Statements for further information.
Pension and Other Postretirement Benefit Assets and Liabilities
Our defined benefit pension and postretirement plans for employees in the U.S. and Canada require numerous estimates and assumptions to determine the proper amount of pension and postretirement liabilities and annual expense to record in our Financial Statements. The key assumptions include discount rate, return on assets, salary increases, health care cost trends, mortality rates, longevity and service lives of employees. Although authoritative guidance on how to select most of these assumptions exists, we exercise judgment when selecting these assumptions based on input from our actuary and other advisors. Different assumptions, as well as actual versus expected results, would change the periodic benefit cost and funded status of the benefit plans recognized in the financial statements.
Our assumed long-term return on plan assets was established based on historical long-term rates of return on broad equity and bond indices, discussions with our actuary and investment advisors and consideration of the actual historical annualized rate of returns. In determining future pension obligations, we select a discount rate based on information supplied by our actuary. The actuarial rates are developed by models which incorporate high-quality (AA rated), long-term corporate bond rates into their calculations. The weighted average discount rate decreased from 5.16 percent at December 31, 2024 to 5.11 percent at December 31, 2025.
Our defined pension plans were underfunded by $62 million at December 31, 2025. The underfunded status increased by $1 million in 2025, primarily due to actuarial losses because of decreased discount rates, partially offset by increased returns on plan assets. In 2026, pension expense is expected to decrease compared to 2025. Many factors will impact future pension expense, including actual investment performance, changes in discount rates, timing of contributions and other employee related matters. See Note 19—Employee Benefit Plans to our Financial Statements for further information.
In 2025, we made mandatory contributions and benefit payments to plan participants of $8 million. During 2026, we expect to make mandatory contributions and benefit payments to plan participants of $8 million. Future mandatory contribution requirements will vary depending on actual investment performance, changes in valuation assumptions, interest rates and legal requirements to maintain a certain funding status.
The sensitivity of pension expense and projected benefit obligation related to our pension plans to changes in economic assumptions is presented below:
(in millions)
Increase (Decrease)
in 2026 Pension Expense
Increase (Decrease)
in December 31, 2025
Projected Benefit Obligation
Change in Assumption
50 bp decrease in discount rate
50 bp increase in discount rate
50 bp decrease in long-term return on assets
50 bp increase in long-term return on assets
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Realizability of Recorded and Unrecorded Tax Assets and Liabilities
Our income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required to determine consolidated income tax expense.
Realizability of Deferred Tax Assets
We have recorded certain DTAs that we believe will be realized in future periods. The recognition of these DTAs is based on our analysis of both positive and negative evidence regarding the future realization of the tax benefit of each existing deductible temporary difference or carryforward. Future realization is based on the existence of sufficient taxable income, of the appropriate character, within the appropriate taxing jurisdiction (for example country, state or province) and within the carryback and carryforward periods available under applicable tax laws. In projecting future taxable income, we evaluate historical earnings, adjusted for certain items, including the results from discontinued operations, along with future earnings forecasts, the reversal of temporary differences and the implementation of feasible and prudent tax-planning strategies. Tax assets are reviewed periodically for realizability. This review requires management to make assumptions and estimates about future profitability that affect the realization of these DTAs. If the review indicates the realizability may be less than likely, a valuation allowance is recorded.
The vast majority of our DTAs are in Canada, where we incurred a cumulative adjusted pre-tax loss over the three most recent fiscal years ending in 2025. We expected to incur this cumulative loss in Canada based on projections in the second quarter of 2025 and, as a result of the significant weight of this negative evidence, we believed it was more likely than not that our Canadian DTAs would not be fully realizable and recorded a full valuation allowance against these assets in that quarter. The result was the recognition of a $337 million tax expense. Barring positive evidence that changes this conclusion, future Canadian earnings will not result in tax expense or benefit on our financial statements.
Evaluation of all available evidence in other jurisdictions supports the realizability of most recorded DTAs, except for recorded DTAs for suspended U.S. interest deductions, which do not have a full valuation allowance in accordance with specific AICPA guidance. See Note 21—Income Taxes to our Financial Statements for further information.
Unrecognized Tax Benefits
Our income tax returns are subject to examination by U.S. federal and state taxing authorities as well as foreign jurisdictions, including Canada and France. In evaluating the tax benefits associated with various tax filing positions, we record a tax benefit for an uncertain tax position if it is more-likely-than-not to be realized upon ultimate settlement of the issue. We record a liability or an offset to the corresponding DTAs for any uncertain tax position that does not meet this criterion. The liabilities for unrecognized tax benefits are adjusted in the period in which it is determined the issue is settled with the taxing authorities, the statute of limitations expires for the relevant taxing authority to examine the tax position or when new facts or information become available. See Note 21—Income Taxes to our Financial Statements for further information.
