Mativ Holdings, Inc. ("Mativ" or the "Company") (NYSE: MATV)
reported earnings results for the three months ended September 30,
2024. On November 30, 2023, Mativ Holdings, Inc. (“Mativ” or the
“Company”) completed the sale of its Engineered Papers business.
Financial results for continuing operations exclude Engineered
Papers in all periods.
Adjusted measures are reconciled to GAAP at the end of this
release. Financial comparisons are versus the prior year period
unless stated otherwise. Figures may not sum to total due to
rounding. "Comparable" non-GAAP measures used to compare current
period Mativ results reflect prior period results revised to align
with our new segment reporting structure. The Company previously
also filed a separate Form 8-K on May 8, 2024, which includes
comparable financial statements for all fiscal quarters of 2023
revised to align with the new segment reporting structure.
Mativ Third Quarter 2024 Highlights
(Continuing Operations)
- Sales of $498.5 million increased 0.1% year over year, and 1.4%
on an organic basis
- GAAP loss was $20.8 million in Q3 2024, an improvement of
$443.5 million compared to $464.3 million in the prior year (which
included a $401.0 million goodwill impairment charge), GAAP EPS was
$(0.38); both included organizational realignment, impairment,
divestiture and purchase accounting expenses
- Adjusted income was $11.0 million, Adjusted EPS was $0.21, and
Adjusted EBITDA was $60.8 million (see non-GAAP
reconciliations)
- Adjusted EBITDA was up 10% versus the prior year, primarily
driven by improved manufacturing performance, lower SG&A and
distribution expenses, partially offset by lower volumes in
advanced films, and less favorable mix
- GAAP operating profit margin improved materially compared to
the prior year (which included a $401.0 million goodwill impairment
charge) and adjusted EBITDA margin increased 110 basis points
Management Commentary
Chief Executive Officer Julie Schertell commented, "We saw
meaningful increases in volume and profitability in Filtration and
our overall SAS segment during the third quarter, with SAS segment
adjusted EBITDA increasing almost 20% year over year. This was
somewhat offset by results in Advanced Films, which were impacted
by automotive and construction end markets. As such, we have
launched a turnaround effort specific to Advanced Films focused on
demand generation, operational performance and increased customer
and end market diversification. This turnaround effort will be
similar to the approach we used for Healthcare throughout 2023,
which year-to-date, resulted in above-market sales growth of more
than 5% and materially improved profitability versus the same
period in 2023.
Given the prevailing macro-economic conditions and the slow pace
of demand recovery, we continue to prioritize those things that we
can control and execute on actions to mitigate external market
factors, such as the $20 million reduction in non-operating cost
announced earlier this year. Additionally, we are increasing
capacity in our growth categories of filtration, specialty tapes,
release liners and medical films, while at the same time reducing
cost and optimizing our supply chain by reducing our plant
footprint from 48 sites at the time of the merger to 35 sites today
and our warehousing footprint by more than 25%. These actions
reduce cost and complexity, and support sustained margin
improvements as demand returns.”
Mativ Third Quarter 2024 Financial
Results (Continuing Operations)
Note: The Financial Results below reflect consolidated Mativ
results presented in our revised segment reporting structure in the
current and prior year period. See the supplemental tables titled
Business Segment Reporting From Continuing Operations for
additional information regarding the revised segment reporting
structure.
Filtration & Advanced Materials
(FAM)
Three Months Ended September
30,
(in millions; unaudited)
2024
2023
Change
2024
2023
Net Sales
$
189.6
$
195.8
$
(6.2
)
GAAP Operating Profit & Margin %
$
19.9
$
22.6
$
(2.7
)
10.5
%
11.5
%
Adjusted EBITDA & Margin %
$
36.5
$
39.2
$
(2.7
)
19.3
%
20.0
%
Filtration & Advanced Materials (FAM) segment sales,
comprised primarily of filtration media and components, advanced
films, coating and converting solutions, and extruded mesh
products, were $189.6 million, down 3.2% versus the prior year
period, as higher volumes in filtration & netting were more
than offset by lower volumes in advanced films along with lower
selling prices.
GAAP Operating Profit in 2024 included $0.8 million of
restructuring and impairment expenses primarily related to
organizational realignment and footprint rationalization. Adjusted
EBITDA (see non-GAAP reconciliations) decreased 7% versus prior
year as higher volumes in filtration & netting, lower selling
and general expenses, and improved manufacturing efficiencies were
more than offset by lower volumes in advanced films, and lower
selling prices.
Sustainable & Adhesive Solutions
(SAS)
Three Months Ended September
30,
(in millions; unaudited)
2024
2023
Change
2024
2023
Net Sales
$
308.9
$
302.4
$
6.5
GAAP Operating Profit & Margin %
$
10.3
$
(405.8
)
$
416.1
3.3
%
(134.2
)%
Adjusted EBITDA & Margin %
$
41.0
$
34.2
$
6.8
13.3
%
11.3
%
Sustainable & Adhesive Solutions (SAS) segment sales,
comprised primarily of tapes, labels, liners, specialty paper,
packaging and healthcare solutions, of $308.9 million were up 2.1%,
and 4.4% on an organic basis, versus the prior year period, as
higher volumes across all end-markets and higher selling prices
were partially offset by sales associated with closed and divested
plants.
GAAP Operating Profit in 2024 included $10.5 million in
restructuring, restructuring related, and impairment expenses
primarily related to organizational realignment and footprint
rationalization and included $401 million in goodwill impairment in
2023. Adjusted EBITDA (see non-GAAP reconciliations) increased $6.8
million (or almost 20%) compared to the prior year period, driven
by favorable manufacturing and distribution costs, favorable
relative net selling price versus input cost performance, and
higher volumes were partially offset by unfavorable mix and higher
SG&A expenses. Adjusted EBITDA margin of 13.3% increased 200
basis points versus the prior year.
Unallocated
Three Months Ended September
30,
(in millions; unaudited)
2024
2023
Change
2024
2023
GAAP Operating Expense & % of
Sales
$
(23.2
)
$
(36.7
)
$
13.5
(4.7
)%
(7.4
)%
Adjusted EBITDA & % of Sales
$
(16.7
)
$
(18.0
)
$
1.3
(3.4
)%
(3.6
)%
Adjusted unallocated expenses (EBITDA) (see non-GAAP
reconciliations) were in line with prior year. GAAP operating
expenses in 2024 included $1.5 million in organizational
realignment and integration costs, and $0.4 million of EP
divestiture expenses.
Interest expense was $18.3 million versus $16.8
million in the prior year period. The increase was primarily due to
higher average interest rates and higher average balances on the
floating portion of our outstanding debt in 2024.
Other expense, net was $12.7 million increased $12.4
million compared with the prior year $0.3 million primarily driven
by foreign currency losses and other asset related charges.
Tax rate was 13.3% for the three months ended September
30, 2024. The lower tax rate was driven by impact of one-time tax
adjustments. Excluding the impact of these one-time tax
adjustments, the Company's tax rate was 21.1%.
Non-GAAP Adjustments reflect items included in GAAP
operating profit, income, and EPS, but excluded from adjusted
results (see non-GAAP reconciliation tables for additional
details). The most significant adjustments to the third quarter
2024 results were as follows:
- $0.22 per share of purchase accounting expenses (purchase
accounting expenses reflect primarily ongoing non-cash intangible
asset amortizations associated with mergers and acquisitions)
- $0.20 per share of restructuring, restructuring related,
impairment, and other expenses
Cash Flow & Debt
Year-to-date 2024 cash provided by operating activities was
$70.7 million. Capital spending and software costs totaled $35.6
million. Working capital was a $0.8 million source of cash due to
an increase in accounts payable and other current liabilities,
partially offset by an increase in accounts receivable and an
increase in inventories.
Total debt was $1,143.4 million as of September 30, 2024 and
total cash was $162.2 million resulting in net debt of $981.2
million. Total liquidity was approximately $463 million, consisting
of $162 million of cash and $301 million of revolver availability.
The Company's debt matures on a staggered basis between 2027 and
2029. The Company redeemed the 2026 senior unsecured notes on
October 7, 2024 and issued $400 million senior unsecured notes due
October 1, 2029.
Dividend & Share
Repurchases
On November 6, 2024 the Company announced its next quarterly
cash dividend of $0.10 per share payable on December 20, 2024 to
stockholders of record as of November 29, 2024.
During the third quarter, the company did not repurchase shares.
The Company intends to repurchase shares periodically and
opportunistically to offset dilution due to stock compensation.
Conference Call
Mativ will hold a conference call to review third quarter 2024
results with investors and analysts at 8:30 a.m. Eastern time on
Thursday, November 7, 2024. The earnings conference call will be
simultaneously broadcast over the Internet at http://ir.mativ.com.
To listen to the call, please go to the Company’s website at least
15 minutes prior to the call to register and to download and
install any necessary audio software. For those unable to listen to
the live broadcast, a replay will be available on the Company’s
website shortly after the call.
About Mativ
Mativ Holdings, Inc. is a global leader in specialty materials,
solving our customers’ most complex challenges by engineering bold,
innovative solutions that connect, protect and purify our world.
Headquartered in Alpharetta, Georgia, we manufacture on three
continents and generate sales in over 100 countries through our
family of business-to-business and consumer product brands. The
company’s two operating segments, Filtration & Advanced
Materials and Sustainable & Adhesive Solutions, target premium
applications across diversified and growing categories. Our broad
portfolio of technologies combines polymers, fibers and resins to
optimize the performance of our customers’ products across multiple
stages of the value chain. Our leading positions are a testament to
our best-in-class global manufacturing, supply chain and materials
science capabilities. We drive innovation and enhance performance,
finding potential in the impossible.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
(the "Act") that are subject to the safe harbor created by that Act
and other legal protections. Forward-looking statements include,
without limitation, those regarding EPS and other financial
guidance, acquisition integration and performance, growth
prospects, future end-market trends, future macro-economic trends,
the future effects of supply chain challenges and price increases,
future cash flows, net leverage, purchase accounting impacts,
effective tax rates, planned investments, profitability, and cash
flow, the expected benefits of the Neenah merger and integration,
whether the strategic benefits and accretion of the sale of the
Company's Engineered Papers business can be achieved, the expected
benefits, of our organizational restructuring, our ability to
execute our growth strategy for 2024, and integration and other
statements generally identified by words such as "believe,"
"expect," "intend," "guidance," "plan," "forecast," "potential,"
"anticipate," "confident," "project," "appear," "future," "should,"
"likely," "could," "may," "will," "typically," and similar words.
In addition, the amount of the goodwill impairment charge
previously announced is based in part on estimates of future
performance, so this announcement should also be considered a
forward-looking statement.
These forward-looking statements are prospective in nature and
not based on historical facts, but rather on current expectations
and on numerous assumptions regarding the business strategies and
the environment in which Mativ will operate in the future and are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed or implied by those
statements. No assurance can be given that such expectations will
prove to have been correct and persons reading this presentation
are therefore cautioned not to place undue reliance on these
forward-looking statements which speak only as at the date of this
press release. These statements are not guarantees of future
performance and involve certain risks and uncertainties, and
assumptions that may cause actual results to differ materially from
our expectations as of the date of this release. These risks
include, among other things, the following factors:
- Risks associated with the implementation of our strategic
growth initiatives, including diversification, and the Company's
understanding of, and entry into, new industries and
technologies;
- Risks associated with acquisitions, dispositions, strategic
transactions and global asset realignment initiatives of Mativ,
including the recent EP divestiture;
- Adverse changes in our end-market sectors impacting key
customers;
- Changes in the source and intensity of competition in our
commercial end-markets;
- Adverse changes in sales or production volumes, pricing and/or
manufacturing costs;
- Seasonal or cyclical market and industry fluctuations which may
result in reduced net sales and operating profits during certain
periods;
- Risks associated with our technological advantages in our
intellectual property and the likelihood that our current
technological advantages are unable to continue indefinitely;
- Supply chain disruptions, including the failure of one or more
material suppliers, including energy, resin, fiber, and chemical
suppliers, to supply materials as needed to maintain our product
plans and cost structure;
- Increases in operating costs due to inflation and continuing
increases in the inflation rate or otherwise, such as labor
expense, compensation and benefits costs;
- Our ability to attract and retain key personnel, labor
shortages, labor strikes, stoppages or other disruptions;
- Changes in general economic, financial and credit conditions in
the U.S., Europe, China and elsewhere, including the impact thereof
on currency exchange rates (including any weakening of the Euro)
and on interest rates;
- A failure in our risk management and/or currency or interest
rate swaps and hedging programs, including the failures of any
insurance company or counterparty;
- Changes in the manner in which we finance our debt and future
capital needs, including potential acquisitions;
- Changes in tax rates, the adoption of new U.S. or international
tax legislation or exposure to additional tax liabilities;
- Uncertainty as to the long-term value of the common stock of
Mativ;
- Changes in employment, wage and hour laws and regulations in
the U.S. and elsewhere, including the unionization rules and
regulations by the National Labor Relations Board, equal pay
initiatives, additional anti-discrimination rules or tests and
different interpretations of exemptions from overtime laws;
- The impact of tariffs, and the imposition of any future
additional tariffs and other trade barriers, and the effects of
retaliatory trade measures;
- Existing and future governmental regulation and the enforcement
thereof that may materially restrict or adversely affect how we
conduct business and our financial results;
- Weather conditions, including potential impacts, if any, from
climate change, known and unknown, and natural disasters or unusual
weather events;
- International conflicts and disputes, such as the ongoing
conflict between Russia and Ukraine, the war between Israel and
Hamas and the broader regional conflict in the Middle East, which
restrict our ability to supply products into affected regions, due
to the corresponding effects on demand, the application of
international sanctions, or practical consequences on
transportation, banking transactions, and other commercial
activities in troubled regions;
- Compliance with the FCPA and other anti-corruption laws or
trade control laws, as well as other laws governing our
operations;
- Risks associated with pandemics and other public health
emergencies, including the COVID-19 pandemic and its variant
strains;
- The number, type, outcomes (by judgment or settlement) and
costs of legal, tax, regulatory or administrative proceedings,
litigation and/or amnesty programs;
- Increased scrutiny from stakeholders related to environmental,
social and governance (“ESG”) matters, as well as our ability to
achieve our broader ESG goals and objectives;
- Costs and timing of implementation of any upgrades or changes
to our information technology systems;
- Failure by us to comply with any privacy or data security laws
or to protect against theft of customer, employee and corporate
sensitive information;
- The impact of cybersecurity risks related to breaches of
security pertaining to sensitive Company, customer or vendor
information, as well as breaches in the technology that manages
operations and other business processes; and
- Other factors described elsewhere in this document and from
time to time in documents that we file with the U.S. Securities and
Exchange Commission (the “SEC”).
All forward-looking statements made in this document are
qualified by these cautionary statements. Forward-looking
statements herein are made only as of the date of this document,
and Mativ undertakes no obligation, other than as may be required
by law, to update or revise any forward-looking or cautionary
statements to reflect changes in assumptions, the occurrence of
events, unanticipated or otherwise, or changes in future operating
results over time or otherwise. For a more detailed discussion of
these factors, also see the information under the captions “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in Mativ's most recent annual
report on Form 10-K for the year ended December 31, 2023 and any
material updates to these factors contained in any of Mativ’s
future filings with the SEC. The discussion of these risks is
specifically incorporated by reference into this release. The
financial results reported in this release are unaudited.
Comparisons of results for current and any prior periods are not
intended to express any future trends or indications of future
performance unless expressed as such and should only be viewed as
historical data. The financial results reported in this release are
unaudited.
Non-GAAP Financial
Measures
Certain financial measures and comments contained in this press
release exclude restructuring and impairment expenses, certain
purchase accounting adjustments related to prior acquisitions,
organizational realignment and integration costs, divestiture
costs, interest expense, stock compensation expense, inventory
step-up expense, the effect of income tax provisions and other tax
impacts, capital spending, capitalized software costs, cloud-based
software costs and depreciation and amortization. This press
release also provides certain information regarding the Company's
financial results excluding currency impacts. This information
estimates the impact of changes in foreign currency rates on the
translation of the Company's current financial results as compared
to the applicable comparable period and is derived by translating
the current local currency results into U.S. Dollars based upon the
foreign currency exchange rates for the applicable comparable
period. Financial measures which exclude or include these items
have not been determined in accordance with accounting principles
generally accepted in the United States (GAAP) and are therefore
"non-GAAP" financial measures. Reconciliations of these non-GAAP
financial measures to the most closely analogous measure determined
in accordance with GAAP are included in the financial schedules
attached to this release.
The Company believes that the presentation of non-GAAP financial
measures in addition to the related GAAP measures provides
investors with greater transparency on the information used by the
Company’s management in its financial and operational
decision-making. Management also believes that the non-GAAP
financial measures provide additional insight for analysts and
investors in evaluating the Company’s financial and operational
performance in the same way that management evaluates the Company's
financial performance. Management believes that providing this
information enables investors to better understand the Company’s
operating performance and financial condition. These non-GAAP
financial measures are not calculated or presented in accordance
with, and are not intended to be considered in isolation or as
alternatives or substitutes for, or superior to, financial measures
prepared and presented in accordance with GAAP, and should be read
only in conjunction with the Company's financial measures prepared
and presented in accordance with GAAP. The non-GAAP financial
measures used in this release may be different from the measures
used by other companies.
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(LOSS) FROM CONTINUING OPERATIONS
(in millions, except per share
amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
% Change
2024
2023
% Change
Net sales
$
498.5
$
498.2
0.1%
$
1,522.5
$
1,573.7
(3.3)%
Cost of products sold
404.9
411.5
(1.6)%
1,236.0
1,303.8
(5.2)%
Gross profit
93.6
86.7
8.0%
286.5
269.9
6.2%
Selling expense
18.1
20.5
(11.7)%
54.6
60.6
(9.9)%
Research and development expense
5.7
5.4
5.6%
17.5
16.6
5.4%
General expense
51.6
63.4
(18.6)%
173.3
185.8
(6.7)%
Total nonmanufacturing expenses
75.4
89.3
(15.6)%
245.4
263.0
(6.7)%
Goodwill impairment expense
—
401.0
N.M.
—
401.0
N.M.
Restructuring and other impairment
expense
11.2
16.3
(31.3)%
37.4
17.6
N.M.
Operating profit (loss)
7.0
(419.9
)
N.M.
3.7
(411.7
)
N.M.
Interest expense
18.3
16.8
8.9%
55.0
48.8
12.7%
Other expense, net
(12.7
)
(0.3
)
N.M.
(12.1
)
(3.6
)
N.M.
Loss from continuing operations before
income taxes
(24.0
)
(437.0
)
(94.5)%
(63.4
)
(464.1
)
(86.3)%
Income tax expense (benefit), net
(3.2
)
27.3
N.M.
(13.2
)
30.0
N.M.
Net loss from continuing operations
(20.8
)
(464.3
)
(95.5)%
(50.2
)
(494.1
)
(89.8)%
Net income from discontinued
operations
—
9.3
N.M.
—
26.9
N.M.
Net loss
(20.8
)
(455.0
)
(95.4)%
(50.2
)
(467.2
)
(89.3)%
Dividends to participating securities
(0.1
)
(0.5
)
(80.0)%
(0.2
)
(0.7
)
(71.4)%
Net loss attributable to Common
Stockholders
$
(20.9
)
$
(455.5
)
(95.4)%
$
(50.4
)
$
(467.9
)
(89.2)%
Net loss per share - basic:
Loss per share from continuing
operations
$
(0.38
)
$
(8.50
)
(95.5)%
$
(0.93
)
$
(9.06
)
(89.7)%
Income per share from discontinued
operations
—
0.17
N.M.
—
0.49
N.M.
Basic
$
(0.38
)
$
(8.33
)
(95.4)%
$
(0.93
)
$
(8.57
)
(89.1)%
Net loss per share – diluted:
Loss per share from continuing
operations
$
(0.38
)
$
(8.50
)
(95.5)%
$
(0.93
)
$
(9.06
)
(89.7)%
Income per share from discontinued
operations
—
0.17
N.M.
—
0.49
N.M.
Diluted
$
(0.38
)
$
(8.33
)
(95.4)%
$
(0.93
)
$
(8.57
)
(89.1)%
Weighted average shares outstanding:
Basic
54,327,500
54,659,100
54,305,800
54,600,100
Diluted
54,327,500
54,659,100
54,305,800
54,600,100
N.M. - Not Meaningful
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
September 30,
2024
December 31,
2023
ASSETS
Cash and cash equivalents
$
162.2
$
120.2
Accounts receivable, net
208.5
176.5
Inventories, net
354.3
352.9
Income taxes receivable
16.6
30.6
Other current assets
35.7
32.3
Total current assets
777.3
712.5
Property, plant and equipment, net
635.5
672.5
Finance lease right-of-use assets
17.3
18.2
Operating lease right-of-use assets
44.6
45.6
Deferred income tax benefits
10.4
6.4
Goodwill
475.6
474.1
Intangible assets, net
585.5
631.3
Other assets
76.9
81.8
Total assets
$
2,623.1
$
2,642.4
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current debt
$
2.8
$
2.8
Finance lease liabilities
1.6
1.4
Operating lease liabilities
9.5
9.9
Accounts payable
172.7
139.3
Income taxes payable
10.1
14.3
Accrued expenses and other current
liabilities
131.3
113.7
Total current liabilities
328.0
281.4
Long-term debt
1,140.6
1,101.8
Finance lease liabilities, noncurrent
17.2
18.2
Operating lease liabilities,
noncurrent
34.8
35.3
Long-term income tax payable
—
7.7
Pension and other postretirement
benefits
58.5
62.2
Deferred income tax liabilities
116.1
142.3
Other liabilities
45.6
44.4
Total liabilities
1,740.8
1,693.3
Stockholders’ equity:
Preferred stock, $0.10 par value;
10,000,000 shares authorized; none issued or outstanding
—
—
Common stock, $0.10 par value; 100,000,000
shares authorized; $54,328,913 and 54,211,124 shares issued and
outstanding at September 30, 2024 and December 31, 2023,
respectively
5.4
5.4
Additional paid-in-capital
671.9
669.6
Retained earnings
168.3
235.0
Accumulated other comprehensive income,
net of tax
36.7
39.1
Total stockholders’ equity
882.3
949.1
Total liabilities and stockholders’
equity
$
2,623.1
$
2,642.4
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FROM CONTINUING OPERATIONS
(in millions)
(Unaudited)
Nine Months Ended September
30,
2024
2023
Operating
Loss from continuing operations
$
(50.2
)
$
(494.1
)
Non-cash items included in net loss:
Depreciation and amortization
108.4
112.4
Amortization of deferred issuance
costs
5.9
5.6
Goodwill impairment
—
401.0
Asset impairments
16.2
14.8
Deferred income tax
(22.2
)
24.9
Pension and other postretirement
benefits
(4.5
)
(10.4
)
Stock-based compensation
8.7
9.3
Loss on sale of assets
9.7
—
(Gain) loss on foreign currency
transactions
3.0
(1.2
)
Other non-cash items
(2.9
)
(7.3
)
Other operating
(2.2
)
(3.8
)
Net changes in operating working
capital
0.8
(13.4
)
Net cash provided by operating activities
of:
Continuing operations
70.7
37.8
Discontinued operations
—
14.6
Net cash provided by operations
70.7
52.4
Investing
Capital spending
(32.9
)
(49.4
)
Capitalized software costs
(0.5
)
(0.5
)
Proceeds from sale of assets
4.5
—
Cash received from (paid on) settlement of
cross-currency swap contracts
(1.7
)
—
Other investing
1.2
0.5
Net cash used in investing of:
Continuing operations
(29.4
)
(49.4
)
Discontinued operations
(12.0
)
(8.8
)
Net cash used in investing
(41.4
)
(58.2
)
Financing
Cash dividends paid
(16.2
)
(49.8
)
Proceeds from long-term debt
127.0
180.0
Payments on long-term debt
(97.0
)
(134.2
)
Payments for debt issuance costs
—
(1.5
)
Payments on financing lease
obligations
(0.8
)
(0.7
)
Purchases of common stock
(0.8
)
(7.0
)
Net cash provided by (used in) financing
of:
Continuing operations
12.2
(13.2
)
Discontinued operations
—
(0.9
)
Net cash provided by (used in)
financing
12.2
(14.1
)
Effect of exchange rate changes on cash
and cash equivalents
0.5
(0.9
)
Increase (decrease) in cash and cash
equivalents
42.0
(20.8
)
Cash and cash equivalents at beginning of
period
120.2
124.4
Cash and cash equivalents at end of
period
$
162.2
$
103.6
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
BUSINESS SEGMENT REPORTING FROM
CONTINUING OPERATIONS
(in millions)
(Unaudited)
NOTE REGARDING SEGMENT REPORTING AND
COMPARABILITY
The Company filed a Current Report on Form
8-K/A on December 6, 2023 to reflect the impact of the Engineered
Papers (“EP”) Divestiture as discontinued operations and to present
certain Non-GAAP financial measures quarterly on a comparable basis
beginning with the first quarter of 2022 (the "EP Supplemental
Financial Information"). The Company filed a Current Report in form
8-K on May 8, 2024 to update the presentation of such Non-GAAP
financial measures previously disclosed in the EP Supplemental
Financial Information in order to reflect the changes to the
Company's reportable segments discussed below and enhance the
Company's shareholders' ability to evaluate Company operating
performance. The EP business is presented as a discontinued
operation for all periods and certain prior period amounts were
retrospectively revised to reflect these changes.
As part of the organizational realignment
effective during the first quarter of 2024, we have reorganized
into two new reportable segments: (1) Filtration & Advanced
Materials ("FAM") focused primarily on filtration media and
components, advanced films, coating and converting solutions, and
extruded mesh products, and (2) Sustainable & Adhesive
Solutions ("SAS"), focused primarily on tapes, labels, liners,
specialty paper, packaging and healthcare solutions. The change in
reportable segments reflects the realignment of segment level
management and the related internal review of our operating
segments. The prior period segment results have been revised to
align with our current segment reporting structure and is presented
on a continuing operations basis.
Net Sales from Continuing
Operations
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
% Change
2024
2023
% Change
FAM
$
189.6
$
195.8
(3.2
)%
$
598.7
$
628.1
(4.7
)%
SAS
308.9
302.4
2.1
%
923.8
945.6
(2.3
)%
Total Consolidated
$
498.5
$
498.2
0.1
%
$
1,522.5
$
1,573.7
(3.3
)%
Operating Profit (Loss) from Continuing
Operations
Three Months Ended September
30,
Nine Months Ended September
30,
Return on Net Sales
Return on Net Sales
2024
2023
2024
2023
2024
2023
2024
2023
FAM
$
19.9
$
22.6
10.5
%
11.5
%
$
59.7
$
78.3
10.0
%
12.5
%
SAS
10.3
(405.8
)
3.3
%
(134.2
)%
30.1
(385.4
)
3.3
%
(40.8
)%
Unallocated
(23.2
)
(36.7
)
(4.7
)%
(7.4
)%
(86.1
)
(104.6
)
(5.7
)%
(6.6
)%
Total Consolidated
$
7.0
$
(419.9
)
1.4
%
(84.3
)%
$
3.7
$
(411.7
)
0.2
%
(26.2
)%
Non-GAAP Adjustments to Operating
Profit (Loss)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
FAM - Amortization of intangibles and
other purchase accounting adjustments
$
8.7
$
8.4
$
26.0
$
25.1
FAM - Restructuring, restructuring
related, impairment, and other expenses
0.8
1.1
5.2
2.4
FAM - Organizational realignment and
integration costs(2)
0.1
—
0.2
—
SAS - Amortization of intangibles and
other purchase accounting adjustments
7.1
7.2
21.3
21.8
SAS - Restructuring, restructuring
related, impairment, and other expenses
10.5
418.9
28.2
419.3
SAS - Organizational realignment and
integration costs(2)
—
—
(0.1
)
—
Unallocated - Restructuring, restructuring
related, impairment, and other expenses
—
—
3.4
1.1
Unallocated - Organizational realignment
and integration costs(2)
1.5
9.2
8.0
28.7
Unallocated - Divestiture costs
0.4
5.3
3.6
5.3
Unallocated - Financing fees(1)
2.3
2.4
6.9
2.4
Unallocated - Amortization of cloud-based
software costs
0.1
—
0.3
—
Total Consolidated
$
31.5
$
452.5
$
103.0
$
506.1
(1) Financing fees incurred for the
Receivables Sales Agreement for the three and nine months ended
September 30, 2024 and for the three months ended September 30,
2023.
(2) Costs associated with the
organizational realignment plan (“the Plan”) announced on January
24, 2024 totaled $0.7 million and $3.7 million for the three and
nine months ended September 30, 2024, respectively, which included
advisory fees and system-related initiatives. Integration costs
totaled $0.8 million and $4.4 million for the three and nine months
ended September 30, 2024, respectively, which included stock-based
compensation, employee compensation, and consulting fees.
Adjusted Operating Profit from
Continuing Operations
Three Months Ended September
30,
Nine Months Ended September
30,
Return on Net Sales
Return on Net Sales
2024
2023
2024
2023
2024
2023
2024
2023
FAM
$
29.5
$
32.1
15.6
%
16.4
%
$
91.1
$
105.8
15.2
%
16.8
%
SAS
27.9
20.3
9.0
%
6.7
%
79.5
55.7
8.6
%
5.9
%
Unallocated
(18.9
)
(19.8
)
(3.8
)%
(4.0
)%
(63.9
)
(67.1
)
(4.2
)%
(4.3
)%
Total Consolidated
$
38.5
$
32.6
7.7
%
6.5
%
$
106.7
$
94.4
7.0
%
6.0
%
Non-GAAP Adjustments to Adjusted
Operating Profit
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
FAM - Depreciation
$
6.7
$
7.0
$
20.2
$
20.6
FAM - Stock-based compensation(1)
0.3
0.1
0.7
0.3
SAS - Depreciation
12.6
13.5
39.4
41.5
SAS - Stock-based compensation(1)
0.5
0.4
0.6
0.4
Unallocated - Depreciation
0.6
0.9
1.5
3.0
Unallocated - Stock-based
compensation(1)
1.6
0.9
4.1
3.2
Total Consolidated
$
22.3
$
22.8
$
66.5
$
69.0
(1) Stock-based compensation excludes
stock-based compensation included in restructuring and integration
costs.
Adjusted EBITDA from Continuing
Operations
Three Months Ended September
30,
Nine Months Ended September
30,
Return on Net Sales
Return on Net Sales
2024
2023
2024
2023
2024
2023
2024
2023
FAM
$
36.5
$
39.2
19.3
%
20.0
%
$
112.0
$
126.7
18.7
%
20.2
%
SAS
41.0
34.2
13.3
%
11.3
%
119.5
97.6
12.9
%
10.3
%
Unallocated
(16.7
)
(18.0
)
(3.4
)%
(3.6
)%
(58.3
)
(60.9
)
(3.8
)%
(3.9
)%
Total Consolidated
$
60.8
$
55.4
12.2
%
11.1
%
$
173.2
$
163.4
11.4
%
10.4
%
Non-GAAP Reconciliation of Organic Net
Sales Growth
FAM
SAS
Consolidated Mativ
Three Months Ended September
30,
Mativ 2023 Net Sales from Continuing
Operations
$
195.8
$
302.4
$
498.2
Divestiture/closure adjustments
—
(6.5
)
(6.5
)
Mativ 2023 comparable Net Sales from
Continuing Operations
$
195.8
$
295.9
$
491.7
Mativ 2024 Net Sales
$
189.6
$
308.9
$
498.5
Divestiture/closure adjustments
—
—
—
Mativ 2024 comparable Net Sales from
Continuing Operations
$
189.6
$
308.9
$
498.5
Organic growth
(3.2
)%
4.4
%
1.4
%
Currency effects on 2024
$
0.9
$
0.7
$
1.6
Mativ 2024 comparable Net Sales from
Continuing Operations with Currency Adjustment
$
188.7
$
308.2
$
496.9
Organic constant currency growth
(3.6
)%
4.2
%
1.1
%
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA
(in millions, except per share
amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Operating profit (loss) from continuing
operations
$
7.0
$
(419.9
)
$
3.7
$
(411.7
)
Plus: Restructuring, restructuring
related, impairment, and other expenses
11.3
19.0
36.8
21.8
Plus: Goodwill impairment
—
401.0
—
401.0
Plus: Purchase accounting adjustments
15.8
15.6
47.3
46.9
Plus: Organizational realignment and
integration costs
1.6
9.2
8.1
28.7
Plus: Divestiture costs
0.4
5.3
3.6
5.3
Plus: Financing fees
2.3
2.4
6.9
2.4
Plus: Amortization of cloud-based software
costs
0.1
—
0.3
—
Adjusted Operating Profit from continuing
operations
$
38.5
$
32.6
$
106.7
$
94.4
Income (loss) from continuing
operations
$
(20.8
)
$
(464.3
)
$
(50.2
)
$
(494.1
)
Plus: Restructuring, restructuring
related, impairment, and other expenses
10.7
16.8
31.8
18.9
Plus: Goodwill impairment
—
401.0
—
401.0
Plus: Gain/loss on sale of assets
5.8
—
5.8
—
Plus: Purchase accounting adjustments
12.2
13.1
36.5
36.7
Plus: Litigation/tax settlement
—
1.2
—
4.9
Plus: Organizational realignment and
integration costs
1.2
7.5
6.1
22.4
Plus: Divestiture costs
0.3
4.1
2.8
4.0
Plus: Other
1.1
—
1.1
—
Less: Luxembourg valuation allowance
release
—
31.7
—
31.7
Plus: Reversal of valuation allowance on
prior year tax credits
—
6.4
—
6.4
Plus: Tax legislative changes, net of
other discrete items
0.5
(6.3
)
(2.8
)
2.2
Adjusted Income from continuing
operations
$
11.0
$
11.2
$
31.1
$
34.1
Earnings (loss) per share from continuing
operations - diluted
$
(0.38
)
$
(8.50
)
$
(0.93
)
$
(9.06
)
Plus: Restructuring, restructuring
related, impairment, and other expenses
0.20
0.32
0.58
0.36
Plus: Goodwill impairment
—
7.30
—
7.30
Plus: Gain/loss on sale of assets
0.11
—
0.11
—
Plus: Purchase accounting adjustments
0.22
0.23
0.67
0.67
Plus: Litigation/tax settlement
—
0.02
—
0.09
Plus: Organizational realignment and
integration costs
0.02
0.14
0.11
0.42
Plus: Divestiture costs
0.01
0.08
0.05
0.08
Plus: Other
0.02
—
0.02
—
Less: Luxembourg valuation allowance
release
—
0.59
—
0.59
Plus: Reversal of valuation allowance on
prior year tax credits
—
0.13
—
0.12
Plus: Tax legislative changes, net of
other discrete items
0.01
(0.10
)
(0.05
)
0.05
Adjusted Earnings Per Share from
continuing operations - diluted
$
0.21
$
0.21
$
0.56
$
0.62
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA
(in millions, except per share
amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net loss from continuing operations
$
(20.8
)
$
(464.3
)
$
(50.2
)
$
(494.1
)
Plus: Interest expense
18.3
16.8
55.0
48.8
Plus: Financing fees
2.3
2.4
6.9
2.4
Plus: Provision for income taxes
(3.2
)
27.3
(13.2
)
30.0
Plus: Depreciation & amortization
35.7
36.9
108.4
110.5
Plus: Amortization of cloud-based software
costs
0.1
—
0.3
—
Plus: Stock compensation expense
2.4
1.4
5.4
4.0
Plus: Inventory step up expense
—
—
—
1.4
Plus: Restructuring, restructuring
related, impairment, and other expenses
11.3
16.3
36.8
17.6
Plus: Goodwill impairment
—
401.0
—
401.0
Plus: Other restructuring related
expense
—
2.8
—
4.2
Plus: Organizational realignment and
integration costs
1.6
9.2
8.1
28.7
Plus: Divestiture costs
0.4
5.3
3.6
5.3
Plus: Litigation/tax settlement
—
—
—
4.9
Plus: Other income (expense), net
12.7
0.3
12.1
(1.3
)
Adjusted EBITDA from continuing
operations
$
60.8
$
55.4
$
173.2
$
163.4
Cash used in operating activities of
continuing operations
$
37.6
$
32.3
$
70.7
$
37.8
Less: Capital spending
(12.1
)
(14.7
)
(32.9
)
(49.4
)
Less: Capitalized software costs
(0.4
)
—
(0.5
)
(0.5
)
Less: Cloud-based software costs
(1.2
)
—
(2.2
)
—
Free Cash Flow from continuing
operations
$
23.9
$
17.6
$
35.1
$
(12.1
)
September 30, 2024
December 31, 2023
Total Debt
$
1,143.4
$
1,104.6
Less: Cash
162.2
120.2
Net Debt from continuing operations
$
981.2
$
984.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106250893/en/
Chris Kuepper, IRC Director, Investor Relations
+1-770-569-4229
Website: http://www.mativ.com
Mativ (NYSE:MATV)
Historical Stock Chart
From Nov 2024 to Dec 2024
Mativ (NYSE:MATV)
Historical Stock Chart
From Dec 2023 to Dec 2024
