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Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Equity Bottom-Up

Rayonier Advanced Materials / Equity Bottom-Up

<ul><li>Strong 2Q24 results confirm corporate strategy. RYAM delivered a positive surprise when it reported its 2Q24 results earlier this week, driven primarily by stronger sales in HPC and Paperboard and significant margin recovery in HPC, driven by reduced commodity sales and a higher mix of specialties, further benefited by one-time CEWS payments.</li><li>Raised guidance suggests building momentum into 2025. Management raised 2024 EBITDA guidance from $180-200 million to $205-215 million on a strong 2Q24 performance and higher outlook for 2H24.</li><li>Free cash flow guidance was also increased to $100-110 million (previously $80-$100 million), largely a result of lower maintenance capex as a function of the suspension of commodity HPC production at Temiscaming, and a better margin outlook overall.</li></ul>

Strong 2Q24 results confirm corporate strategy. RYAM delivered a positive surprise when it reported its 2Q24 results earlier this week, driven primarily by stronger sales in HPC and Paperboard and significant margin recovery in HPC, driven by reduced commodity sales and a higher mix of specialties, further benefited by one-time CEWS payments.Raised guidance suggests building momentum into 2025. Management raised 2024 EBITDA guidance from $180-200 million to $205-215 million on a strong 2Q24 performance and higher outlook for 2H24.Free cash flow guidance was also increased to $100-110 million (previously $80-$100 million), largely a result of lower maintenance capex as a function of the suspension of commodity HPC production at Temiscaming, and a better margin outlook overall.

Rayonier Advanced Materials, Inc. - Turning the Corner