Rayonier Advanced Materials Inc 8-K, filed Sep 2, 2021
Rayonier Advanced Materials Inc. (RYAM)
8-K
2021-09-02
For: 2021-08-28
View Original
Added on
April 11, 2026
About this 8-K
Rayonier Advanced Materials Inc filed this 8-K on September 2, 2021, reporting on events of August 28, 2021.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
COMMISSION FILE NUMBER 001-36285
Incorporated in the State of Delaware
I.R.S. Employer Identification Number 46-4559529
(Principal Executive Office)
Telephone Number: (904 ) 357-4600
Check the appropriate box below if the form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Rayonier Advanced Materials Inc.
Table of Contents
| Page | |||||||||||
| Item 2.01 | |||||||||||
| Item 8.01 | |||||||||||
| Item 9.01 | |||||||||||
| Item 2.01 | Completion of Acquisition or Disposition of Assets | ||||
On August 28, 2021, Rayonier Advanced Materials Inc. (the “Company”) completed its previously announced sale of the lumber and newsprint assets to GreenFirst Forest Products, a Canadian lumber company, for a total purchase price of US$235 million. There is no material relationship, other than in respect of the transaction, between GreenFirst Forest Products or any of its affiliates and the Company, or any director or officer of the Company, or any associate of any such director or officer.
| Item 8.01 | Other Events | ||||
A copy of the Company’s press release in respect of the completion of the sale of the lumber and newsprint assets is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.
The press release referenced in this Item 8.01 shall not be deemed “filed” for purposes of Section 18 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits | ||||
(b) Pro forma financial information
As a result of the sale of the lumber and newsprint assets, beginning in the second quarter of 2021, the historical financial results of the lumber and newsprint assets, for periods prior to the sale, have been reflected in the Company’s consolidated financial statements as discontinued operations. Attached as Exhibit 99.2 are the unaudited pro forma financial statements which are based on the historical financial statements of the Company, prepared to reflect the sale of the lumber and newsprint assets.
These statements are intended for information purposes only, and the information provided therein is not intended to represent or be indicative of what the Company’s results of operations or financial position would have been if the sale had occurred on the dates indicated. The unaudited pro forma condensed consolidated financial statements should be read with the Company’s historical financial statements, which are included in the Company’s latest annual report on Form 10-K and quarterly report on Form 10-Q. The unaudited pro forma financial statements should not be considered representative of the Company’s future results or financial position.
| (d) | Exhibits. | ||||
The following exhibit is furnished herewith:
Press release entitled “Rayonier Advanced Materials Completes Sale Of Lumber And Newsprint Assets” issued August 30, 2021 | ||||||||
| Unaudited Pro Forma Financial Information | ||||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. | |||||||
1
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| Rayonier Advanced Materials Inc. (Registrant) | |||||||||||
| BY: | /s/ Richard Colby Slaughter | ||||||||||
| Richard Colby Slaughter | |||||||||||
| Vice President, General Counsel and Corporate Secretary | |||||||||||
September 2, 2021
2
Exhibit 99.1
Contacts: | ||||||||
| RYAM Media | Ryan Houck | 904-357-9134 | ||||||
RYAM Investors | Mickey Walsh | 904-357-9162 | ||||||
Rayonier Advanced Materials Completes Sale of Lumber and Newsprint Assets
JACKSONVILLE, Fla., August 30, 2021 – Rayonier Advanced Materials Inc. (NYSE: RYAM) (the “Company”) announced today that it has completed its previously announced sale of its lumber and newsprint assets (the “Purchased Assets”) to GreenFirst Forest Products Inc. (“GreenFirst”), a Canadian lumber company, for a total purchase price of approximately US$235 million, subject to final adjustments. The total purchase price is payable approximately 85 percent in cash and 15 percent of common shares in GreenFirst (the “Green First Shares”), which is subject to a six-month holding period. Notably, RYAM retained all the cash generated by the Purchased Assets prior to closing plus rights and obligations related to all softwood lumber duties, including any potential interest on the duties, previously paid to the U.S. Department of Commerce of approximately $110 million. As previously disclosed, the proceeds will be used to repay debt and make strategic capital investments focused on the High Purity Cellulose segment.
As mentioned above, Rayonier A.M. Canada G.P., a wholly-owned subsidiary of the company, was issued 28,684,433 GreenFirst Shares at a deemed price of approximately $1.19 per share representing an aggregate amount of approximately $34,134,475. Prior to the transaction, Rayonier A.M. Canada G.P., did not own or have control or direction over any GreenFirst Shares. Following the transaction, Rayonier A.M. Canada G.P., beneficially owns 28,684,433 GreenFirst Shares representing approximately 16.2% of the issued and outstanding common shares of GreenFirst. Neither Rayonier A.M. Canada G.P. nor the Company does not have any current plans or future intentions to buy or sell further GreenFirst Shares, to solicit proxies or to otherwise participate in any significant transaction involving GreenFirst. Rayonier A.M. Canada G.P. intends to review its investment on a continuing basis and may in the future purchase or sell securities or otherwise engage in activities related to GreenFirst.
An early warning report will be filed by the Company in accordance with applicable securities laws and will be available on SEDAR at www.sedar.com or directly from RYAM upon request at the telephone number above.
The head office of GreenFirst is located at 1800 - 510 West Georgia Street, Vancouver, British Columbia, V6B 0M3.
About Rayonier Advanced Materials
Rayonier Advanced Materials is a global leader of cellulose-based technologies, including high purity cellulose specialties, a natural polymer commonly found in filters, food, pharmaceuticals and other industrial applications. The Company also manufactures products for paperboard and high-yield pulp markets. With manufacturing operations in the U.S., Canada and France, Rayonier Advanced Materials generated approximately $1.3 billion of revenues during 2020 and currently employs approximately 2,500 people. More information is available at www.rayonieram.com.
CORPORATE HEADQUARTERS
1301 Riverplace Boulevard Suite 2300 Jacksonville, FL 32207
904.357.4600 fax 904.357.9101 www.RayonierAM.com
Exhibit 99.1
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, business, legal or other outcomes including business and market conditions, outlook and other similar statements relating to Rayonier Advanced Materials’ or future or expected events, developments or financial or operational performance or results, are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as "may," "will," "should," "expect," "estimate," "believe," "intend," "anticipate" and other similar language. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. While we believe these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties.
Other important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements that may have been made in this document are described or will be described in our filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Rayonier Advanced Materials assumes no obligation to update these statements except as is required by law.
# # #
CORPORATE HEADQUARTERS
1301 Riverplace Boulevard Suite 2300 Jacksonville, FL 32207
904.357.4600 fax 904.357.9101 www.RayonierAM.com
Exhibit 99.2
Pro Forma Consolidated Financial Statements
(Unaudited)
On April 12, 2021, Rayonier Advanced Materials Inc. (the "Company") announced the sale of its lumber and newsprint assets located in Ontario and Québec, Canada (the “Transaction”) to GreenFirst Forest Products, Inc. (“GreenFirst”). Beginning in the second quarter of 2021, the financial results of the lumber and newsprint operations for periods prior to the sale were reflected in the Company's consolidated financial statements as discontinued operations. The transaction was completed on August 28, 2021, subject to final adjustments.
The following unaudited pro forma consolidated financial statements are based on the historical financial statements of the Company and have been prepared to reflect the Transaction. The unaudited Pro Forma Consolidated Statements of Income (Loss) for the three years ended December 31, 2020, 2019 and 2018 are presented as if the Transaction occurred on January 1, 2018. The unaudited Pro Forma Consolidated Balance Sheet as of June 26, 2021 gives effect to the Transaction as if it occurred on June 26, 2021. All amounts are presented in thousands of United States dollars, unless otherwise indicated.
These statements are intended for information purposes only, the information is not intended to represent or be indicative of what the Company's results of operations or financial position would have been had the sale occurred on the dates indicated. The unaudited pro forma consolidated financial statements should be read in conjunction with the Company's historical financial statements, which are included in the Company’s latest annual report on Form 10-K and quarterly report on Form 10-Q. The unaudited pro forma financial statements should not be considered representative of the Company's future results or financial position.
The information in the "Historical Company" columns of the unaudited Pro Forma Consolidated Statements of Income (Loss) and Pro Forma Consolidated Balance Sheet was derived from the Company's historical financial statements for the periods presented, as reported, and does not include any adjustments for the Transaction.
The information in the "Lumber and Newsprint Operations" columns of the unaudited Pro Forma Consolidated Statements of Income (Loss) reflects the impact of the operations sold in the Transaction. As permitted by applicable accounting guidance, the Company has also allocated corporate interest expense to the sold operations. Allocated interest expense has been presented in the “Pro Forma Adjustments” column of the unaudited Pro Forma Consolidated Statements of Income (Loss). Eliminations represent sales between the Lumber and Newsprint businesses and the continuing operations of the Company.
The information in the "Lumber and Newsprint Asset Sale" column of the unaudited Pro Forma Consolidated Balance Sheet reflects the impact of the sale of the assets and liabilities included in the Transaction. The information in the “Pro Forma Adjustments” columns of the unaudited Pro Forma Consolidated Balance Sheet reflect additional pro forma adjustments.
Adjustments to the unaudited Pro Forma Consolidated Statements of Income (Loss) and unaudited Pro Forma Consolidated Balance Sheet are described in Note 1.
Exhibit 99.2
Rayonier Advanced Materials Inc.
Pro Forma Consolidated Statement of Income (Loss)
(Unaudited)
(Dollars in thousands, except share and per share amounts)
For the Year Ended December 31, 2020
| Historical Company | Lumber and Newsprint Operations | Pro Forma Adjustments | Eliminations | Pro Forma Company | |||||||||||||||||||||||||
| Net Sales | $ | 1,738,899 | $ | (439,170) | $ | 44,104 | $ | 1,343,833 | |||||||||||||||||||||
| Cost of Sales | (1,601,115) | 364,815 | (44,104) | (1,280,404) | |||||||||||||||||||||||||
| Gross Margin | 137,784 | (74,355) | — | 63,429 | |||||||||||||||||||||||||
| Selling, general and administrative expenses | (85,193) | 7,251 | — | (77,942) | |||||||||||||||||||||||||
| Duties | (10,304) | 10,304 | — | — | |||||||||||||||||||||||||
| Other operating expense, net | (15,213) | (639) | — | (15,852) | |||||||||||||||||||||||||
| Operating Income (Loss) | 27,074 | (57,439) | — | — | (30,365) | ||||||||||||||||||||||||
| Interest expense | (64,214) | 59 | 8,639 | — | (55,516) | ||||||||||||||||||||||||
| Other income (loss), net | (7,265) | 200 | — | (7,065) | |||||||||||||||||||||||||
| Other components of net periodic benefit income (expense) | 6,216 | (3,657) | — | 2,559 | |||||||||||||||||||||||||
| Loss on debt extinguishment | (7,841) | — | — | — | (7,841) | ||||||||||||||||||||||||
| Loss from Continuing Operations Before Income Taxes | (46,030) | (60,837) | 8,639 | — | (98,228) | ||||||||||||||||||||||||
Income tax expense | 46,607 | 14,713 | (430) | — | 60,890 | ||||||||||||||||||||||||
| Equity in loss of equity method investment | (730) | — | — | — | (730) | ||||||||||||||||||||||||
| Income (Loss) from Continuing Operations | (153) | (46,124) | 8,209 | — | (38,068) | ||||||||||||||||||||||||
| Income from discontinued operations | 708 | — | — | — | 708 | ||||||||||||||||||||||||
| Net Income (Loss) Available to the Company's Common Stockholders | $ | 555 | $ | (46,124) | $ | 8,209 | $ | — | $ | (37,360) | |||||||||||||||||||
| Basic Earnings (Loss) Per Share of Common Stock | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | — | $ | (0.60) | |||||||||||||||||||||||||
| Income from discontinued operations | 0.01 | 0.01 | |||||||||||||||||||||||||||
| Net income (loss) per common share-basic | $ | 0.01 | $ | (0.59) | |||||||||||||||||||||||||
| Diluted Earnings (Loss) Per Share of Common Stock | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | — | $ | (0.60) | |||||||||||||||||||||||||
| Income from discontinued operations | 0.01 | 0.01 | |||||||||||||||||||||||||||
| Net income (loss) per common share-diluted | $ | 0.01 | $ | (0.59) | |||||||||||||||||||||||||
| Shares used for determining basic earnings per share of common stock | 63,241,197 | 63,241,197 | |||||||||||||||||||||||||||
| Shares used for determining diluted earnings per share of common stock | 63,241,197 | 63,241,197 | |||||||||||||||||||||||||||
Exhibit 99.2
Rayonier Advanced Materials Inc.
Pro Forma Consolidated Statement of Income (Loss)
(Unaudited)
(Dollars in thousands, except share and per share amounts)
For the Year Ended December 31, 2019
| Historical Company | Lumber and Newsprint Operations | Pro Forma Adjustments | Eliminations | Pro Forma Company | |||||||||||||||||||||||||
| Net Sales | $ | 1,775,392 | $ | (386,300) | $ | 41,856 | $ | 1,430,948 | |||||||||||||||||||||
| Cost of Sales | (1,721,235) | 385,608 | (41,856) | (1,377,483) | |||||||||||||||||||||||||
| Gross Margin | 54,157 | (692) | — | — | 53,465 | ||||||||||||||||||||||||
| Selling, general and administrative expenses | (89,644) | 8,869 | — | (80,775) | |||||||||||||||||||||||||
| Duties | (22,634) | 22,634 | — | — | |||||||||||||||||||||||||
| Other operating expense, net | (24,997) | (176) | — | (25,173) | |||||||||||||||||||||||||
| Operating Loss | (83,118) | 30,635 | — | — | (52,483) | ||||||||||||||||||||||||
| Interest expense | (60,267) | 59 | 8,206 | — | (52,002) | ||||||||||||||||||||||||
| Other income (loss), net | (24) | 200 | — | 176 | |||||||||||||||||||||||||
| Other components of net periodic benefit income (expense) | (4,875) | 4,851 | — | (24) | |||||||||||||||||||||||||
| Loss from Continuing Operations Before Income Taxes | (148,284) | 35,745 | 8,206 | — | (104,333) | ||||||||||||||||||||||||
Income tax expense | 29,676 | (7,485) | (1,805) | — | 20,386 | ||||||||||||||||||||||||
| Loss from Continuing Operations | (118,608) | 28,260 | 6,401 | — | (83,947) | ||||||||||||||||||||||||
| Income (loss) from discontinued operations | 96,158 | — | — | 96,158 | |||||||||||||||||||||||||
| Net Income (Loss) Attributable to the Company | (22,450) | 28,260 | 6,401 | — | 12,211 | ||||||||||||||||||||||||
Mandatory convertible stock dividends | (8,582) | — | — | (8,582) | |||||||||||||||||||||||||
| Net Income (Loss) Available to the Company's Common Stockholders | $ | (31,032) | $ | 28,260 | $ | 6,401 | $ | — | $ | 3,629 | |||||||||||||||||||
| Basic Earnings (Loss) Per Share of Common Stock | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | (2.33) | $ | (1.70) | |||||||||||||||||||||||||
| Income from discontinued operations | 1.76 | 1.76 | |||||||||||||||||||||||||||
| Net income (loss) per common share-basic | $ | (0.57) | $ | 0.06 | |||||||||||||||||||||||||
| Diluted Earnings (Loss) Per Share of Common Stock | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | (2.33) | $ | (1.70) | |||||||||||||||||||||||||
| Income from discontinued operations | 1.76 | 1.76 | |||||||||||||||||||||||||||
| Net income (loss) per common share-diluted | $ | (0.57) | $ | 0.06 | |||||||||||||||||||||||||
| Shares used for determining basic earnings per share of common stock | 54,511,863 | 54,511,863 | |||||||||||||||||||||||||||
| Shares used for determining diluted earnings per share of common stock | 54,511,863 | 54,511,863 | |||||||||||||||||||||||||||
Exhibit 99.2
Rayonier Advanced Materials Inc.
Pro Forma Consolidated Statement of Income (Loss)
(Unaudited)
(Dollars in thousands, except share and per share amounts)
For the Year Ended December 31, 2018
| Historical Company | Lumber and Newsprint Operations | Pro Forma Adjustments | Eliminations | Pro Forma Company | |||||||||||||||||||||||||
| Net Sales | $ | 1,956,994 | $ | (468,935) | $ | 44,482 | $ | 1,532,541 | |||||||||||||||||||||
| Cost of Sales | (1,665,847) | 385,187 | (44,482) | (1,325,142) | |||||||||||||||||||||||||
| Gross Margin | 291,147 | (83,748) | — | — | 207,399 | ||||||||||||||||||||||||
| Selling, general and administrative expenses | (104,989) | 6,612 | — | (98,377) | |||||||||||||||||||||||||
| Duties | (25,921) | 25,921 | — | — | |||||||||||||||||||||||||
| Other operating expense, net | (12,422) | 864 | — | (11,558) | |||||||||||||||||||||||||
| Operating Income | 147,815 | (50,351) | — | — | 97,464 | ||||||||||||||||||||||||
| Interest expense | (55,923) | 58 | 7,470 | — | (48,395) | ||||||||||||||||||||||||
| Other income (loss), net | 5,019 | 237 | — | 5,256 | |||||||||||||||||||||||||
| Other components of net periodic benefit income (expense) | 8,345 | (7,574) | — | 771 | |||||||||||||||||||||||||
| Gain on bargain purchase | 20,449 | — | — | 20,449 | |||||||||||||||||||||||||
| Gain on debt extinguishment | 786 | — | — | 786 | |||||||||||||||||||||||||
| Income from Continuing Operations Before Income Taxes | 126,491 | (57,630) | 7,470 | — | 76,331 | ||||||||||||||||||||||||
Income tax expense | (27,040) | 16,332 | — | — | (10,708) | ||||||||||||||||||||||||
| Income from Continuing Operations | 99,451 | (41,298) | 7,470 | — | 65,623 | ||||||||||||||||||||||||
| Income from discontinued operations | 28,965 | — | — | 28,965 | |||||||||||||||||||||||||
| Net Income Attributable to the Company | 128,416 | (41,298) | 7,470 | — | 94,588 | ||||||||||||||||||||||||
Mandatory convertible stock dividends | (13,800) | — | — | — | (13,800) | ||||||||||||||||||||||||
| Net Income Available to the Company's Common Stockholders | $ | 114,616 | $ | (41,298) | $ | 7,470 | $ | — | $ | 80,788 | |||||||||||||||||||
| Basic Earnings (Loss) Per Share of Common Stock | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 1.70 | $ | 1.03 | |||||||||||||||||||||||||
| Income from discontinued operations | 0.57 | 0.57 | |||||||||||||||||||||||||||
| Net income (loss) per common share-basic | $ | 2.27 | $ | 1.60 | |||||||||||||||||||||||||
| Diluted Earnings (Loss) Per Share of Common Stock | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 1.52 | $ | 0.79 | |||||||||||||||||||||||||
| Income from discontinued operations | 0.44 | 0.44 | |||||||||||||||||||||||||||
| Net income (loss) per common share-diluted | $ | 1.96 | $ | 1.23 | |||||||||||||||||||||||||
| Shares used for determining basic earnings per share of common stock | 50,602,480 | 50,602,480 | |||||||||||||||||||||||||||
| Shares used for determining diluted earnings per share of common stock | 65,397,259 | 65,397,259 | |||||||||||||||||||||||||||
Exhibit 99.2
Rayonier Advanced Materials Inc.
Pro Forma Consolidated Balance Sheet
(Unaudited)
(Dollars in thousands)
As of June 26, 2021
| Historical Company | Lumber and Newsprint Asset Sale | Pro Forma Adjustments | Pro Forma Company | ||||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Current Assets | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 214,739 | $ | 188,453 | $ | (157,289) | (a) | $ | 245,903 | ||||||||||||||||||||||||||
| Accounts receivable, net | 187,882 | 4,759 | — | (b) | 192,641 | ||||||||||||||||||||||||||||||
| Inventory | 195,171 | — | — | 195,171 | |||||||||||||||||||||||||||||||
| Income tax receivable | 48,663 | — | — | 48,663 | |||||||||||||||||||||||||||||||
| Prepaid and other current assets | 68,504 | 50,847 | — | (b) | 119,351 | ||||||||||||||||||||||||||||||
| Assets of discontinued operations-held for sale | 245,643 | (245,643) | — | — | |||||||||||||||||||||||||||||||
| Total current assets | 960,602 | (1,584) | (157,289) | 801,729 | |||||||||||||||||||||||||||||||
Property, Plant and Equipment, net | 1,161,012 | — | 1,161,012 | ||||||||||||||||||||||||||||||||
| Deferred Tax Assets | 342,749 | (645) | 1,610 | (c) | 343,714 | ||||||||||||||||||||||||||||||
| Intangible Assets, net | 34,937 | — | — | 34,937 | |||||||||||||||||||||||||||||||
| Other Assets | 149,002 | 3,498 | — | (b) | 152,500 | ||||||||||||||||||||||||||||||
| Total Assets | $ | 2,648,302 | $ | 1,269 | $ | (155,679) | $ | 2,493,892 | |||||||||||||||||||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||||||||||||||||||||||
| Current Liabilities | |||||||||||||||||||||||||||||||||||
| Accounts payable | $ | 157,166 | $ | — | $ | — | $ | 157,166 | |||||||||||||||||||||||||||
| Accrued and other current liabilities | 137,489 | — | (2,789) | (a) | 134,700 | ||||||||||||||||||||||||||||||
| Debt due within one year | 17,013 | — | — | 17,013 | |||||||||||||||||||||||||||||||
| Current environmental liabilities | 8,712 | — | — | 8,712 | |||||||||||||||||||||||||||||||
| Current liabilities for disposed operations | 13,913 | (13,913) | — | — | |||||||||||||||||||||||||||||||
| Total current liabilities | 334,293 | (13,913) | (2,789) | 317,591 | |||||||||||||||||||||||||||||||
| Long-Term Debt | 1,063,739 | — | (147,183) | (a) | 916,556 | ||||||||||||||||||||||||||||||
| Long-Term Environmental Liabilities | 162,384 | — | — | 162,384 | |||||||||||||||||||||||||||||||
| Pension and Other Postretirement Benefits | 246,681 | — | — | 246,681 | |||||||||||||||||||||||||||||||
| Deferred Tax Liabilities | 23,822 | — | — | 23,822 | |||||||||||||||||||||||||||||||
| Other Long-Term Liabilities | 30,542 | — | — | 30,542 | |||||||||||||||||||||||||||||||
| Commitments and Contingencies | |||||||||||||||||||||||||||||||||||
| Stockholders’ Equity | |||||||||||||||||||||||||||||||||||
Common stock | 637 | — | — | 637 | |||||||||||||||||||||||||||||||
| Additional paid-in capital | 404,120 | — | — | 404,120 | |||||||||||||||||||||||||||||||
| Retained earnings | 518,129 | 8,950 | (5,707) | (d) | 521,372 | ||||||||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | (136,045) | 6,232 | — | (e) | (129,813) | ||||||||||||||||||||||||||||||
| Total Stockholders’ Equity | 786,841 | 15,182 | (5,707) | 796,316 | |||||||||||||||||||||||||||||||
| Total Liabilities and Stockholders’ Equity | $ | 2,648,302 | $ | 1,269 | $ | (155,679) | $ | 2,493,892 | |||||||||||||||||||||||||||
Exhibit 99.2
Note 1 — Adjustments to the Unaudited Pro Forma Consolidated Statements of Income (Loss) and Unaudited Pro Forma Consolidated Balance Sheet
The historical results of operations of Rayonier Advanced Materials, Inc. (the "Company") are derived from the Company's audited consolidated statement of operations for the years ended December 31, 2020, 2019, and 2018. The lumber and newsprint results of operations for the years ended December 31, 2020, 2019, and 2018 were derived from the Company’s financial records. The unaudited pro forma consolidated statements of operations for the years ended December 31, 2020, 2019, and 2018 reflect the Transaction as if it had occurred on January 1, 2018, the beginning of the earliest period presented.
While the Company is not obligated to use proceeds from the Transaction to repay debt, the Company will utilize up to $150 million of the cash proceeds to reduce outstanding long-term corporate debt. Allocated interest expense to discontinued operations was $8.6 million, $8.2 million and $7.5 million for the years ended 2020, 2019 and 2018, respectively, based on a debt repayment assumption of $150 million. Interest expense was estimated using the weighted-average interest rates in effect for each period presented based on the proportionate amounts anticipated to be repaid.
The historical balance sheet of the Company is derived from the Company's unaudited interim consolidated balance sheet as of June 26, 2021. The unaudited pro forma consolidated balance sheet as of June 26, 2021 shows the financial position of the Company as if the transaction had occurred on June 26, 2021, the Company's latest balance sheet date, utilizing the actual cash and number of GreenFirst shares of common stock received by the Company as consideration at the closing of the transaction on August 28, 2021.
Consideration for the Transaction is comprised of a base amount of $140 million (the "Base Amount"), the final value of inventory ("Inventory Value"), a Chip Purchase Set-off Amount, as defined in the purchase agreement, and any final adjustments, including adjustments associated with certain working capital items. As per the agreement, the sum of the Base Amount and Inventory Value is payable approximately 85 percent in cash and 15 percent in shares of common stock of GreenFirst at a fixed price of CAD$1.50 per share.
For purposes of the pro forma adjustments, the preliminary consideration for the Transaction is shown below:
| Base Amount | $ | 140,000 | |||
Inventory Value at July 31, 2021 (1) | 89,037 | ||||
| Purchase consideration | 229,037 | ||||
Chip Purchase Set-Off Amount (2) | 4,751 | ||||
Additional fair value of shares in GreenFirst received (3) | 15,471 | ||||
Other adjustments, including working capital adjustments (1) | (1,458) | ||||
| Total consideration | $ | 247,801 | |||
(1) Estimated values for purposes of the closing of the Transaction. The final Inventory Value and final adjustments, including working capital adjustments, will be established within 90 days of closing.
(2) CAD$7.9 million, to be paid in equal annual installments over five years, beginning on the anniversary of the closing. Amount has been discounted to its present value, using a discount rate of 10 percent based on GreenFirst's approximate cost of debt, and translated at an exchange rate of 0.7931. GreenFirst may elect to offset the principal amount against amounts owed by the Company under a 20-year chip supply agreement entered into in connection with the Transaction.
(3) Represents the estimated difference in fair value of 28,684,433 shares of common stock of GreenFirst received by the Company at a fixed price of CAD$1.50 per share, compared to a closing share price of CAD$2.18 per share on August 27, 2021, when the number of shares was determined, translated at an exchange rate of 0.7931. The stock price of GreenFirst as of June 26, 2021 is not used as it did not account for the dilution of GreenFirst's common stock associated with their rights offering completed on July 30, 2021. The Company has agreed to hold these shares for at least six months following the closing of the Transaction.
(a) The cash consideration of $193.5 million represents approximately 85 percent of the sum of the Base Amount plus Inventory Value. The total pro forma impact to cash and cash equivalents as a result of the Transaction consisted of the following:
Exhibit 99.2
| Cash consideration | $ | 193,453 | |||
Less: estimated costs to sell (1) | (5,000) | ||||
| Net cash proceeds | $ | 188,453 | |||
Repayment of debt, including premium for early repayment and accrued interest (2) | (157,289) | ||||
| Total pro forma impact to cash and cash equivalents | $ | 31,164 | |||
(1) Estimated costs to sell include legal and financial advisory fees.
(2) As previously mentioned, the Company's debt agreements do not obligate the Company to repay debt with proceeds from the Transaction. However, the Company will utilize up to $150.0 million of cash proceeds from the Transaction to reduce outstanding debt. Under the assumption that $150.0 million is used to repay outstanding secured debt, the Company would incur an early repayment penalty of $4.5 million, or 3% of the amount of the repayment, and pay accrued interest of $2.8 million. Under the same assumption, the Company would also write off $2.8 million in deferred financing costs associated with the retired debt, resulting in a net decrease in long term debt of $147.2 million.
(b) The total pro forma impact to other current assets consists of the following:
Accounts receivable(1) | $ | 4,759 | |||
Estimated fair value of GreenFirst shares of common stock received (2) | $ | 49,594 | |||
Chip Purchase Set-Off Amount - current (3) | 1,253 | ||||
| Total pro forma impact to other current assets | $ | 50,847 | |||
Total pro forma impact to other assets (3) | $ | 3,498 | |||
(1) Represents CAD$6.0 million of inventory (the "Retained Inventory") agreed to be marketed and sold by GreenFirst on behalf of the Company over the first 60-day period following the close of the Transaction, translated at an exchange rate of 0.7931.
(2) A portion of the purchase consideration is represented by 28,684,433 shares of common stock of GreenFirst received by the Company, calculated based on approximately 15 percent of the sum of the Base Amount and Inventory Value and a fixed price of CAD$1.50 per share. These shares represent approximately 16.2 percent of the total GreenFirst common shares issued and outstanding at the closing date, and had an estimated fair value of $49.6 million based on a closing price of CAD$2.18 per share on August 27, 2021, when the number of shares was determined, translated at an exchange rate of 0.7931. The stock price of GreenFirst as of June 26, 2021 is not used as it did not account for the dilution of GreenFirst's common stock associated with their rights offering completed on July 30, 2021. The Company has agreed to hold these shares for at least six months following the closing of the Transaction, during which time it will record in earnings any changes in the fair value of the shares.
(3) The Company will also receive CAD$7.9 million representing the Chip Purchase Set-Off Amount, payable by GreenFirst in equal annual installments over five years. The Company estimated the present value of this note using a discount rate of 10 percent based on GreenFirst's approximate cost of debt and translating it at an exchange rate of 0.7931. The current portion is the discounted value of the first year's payment. GreenFirst may elect to offset the principal amount against amounts owed by the Company under a 20-year chip supply agreement entered into in connection with the Transaction.
(c) Represents the estimated utilization of deferred tax assets as a result of the Transaction.
(d) The total pro forma impact to retained earnings consists of the following:
| Estimated gain on disposal, net of tax | $ | 8,950 | |||
| Early debt repayment penalty, net of tax | $ | (3,510) | |||
| Deferred financing costs written off, net of tax | (2,197) | ||||
| Total pro forma impact to retained earnings of estimated debt repayment | $ | (5,707) | |||
(e) Represents accumulated other comprehensive losses, estimated at $6.2 million, associated with the defined benefit plan obligations and other post-employment benefit obligations that transfer to GreenFirst as part of the transaction.