Key Highlights

  • Sales were USD 499.5 million against a USD 510.00 million estimate, and adjusted EPS was USD 0.31 against USD 0.25.
  • GAAP loss per share was USD 0.03, while the GAAP net loss was USD 1.2 million against USD 3.2 million.
  • Filtration and Advanced Materials sales were USD 218.5 million, and Sustainable and Adhesive Solutions sales were USD 281.0 million.
  • Total Debt was USD 976.4 million, cash was USD 97.3 million, and the next Dividend is USD 0.10 per share.

Mativ Holdings (NYSE:MATV) described the third quarter as one in which its priorities were restoring customer Supply after a July tornado in Wisconsin and pivoting to growth initiatives. President and CEO Shruti Singhal said the tornado disrupted operations at the Paper and Packaging business, that recovery remains on plan and that the company regards inventory losses as fully recoverable. Sales were USD 499.5 million, against USD 513.7 million a year earlier.

Priorities and Operations After the Tornado

Sales fell 2.8% and 2.3% on an organic basis, which the company attributed primarily to the tornado. Management stated that the Filtration and Advanced Materials segment had its highest sales growth in the segment's history, supported by Demand in Aerospace and Defense and Transportation, and that its execution had positioned the company for year-over-year third-quarter Adjusted EBITDA growth before the operational disruption.

Filtration and Advanced Materials sales were USD 218.5 million, against USD 198.3 million, up 11.6% on an organic basis, on higher Volume and mix and higher selling prices. Segment Adjusted EBITDA was USD 39.6 million, against USD 32.9 million, and the Margin was 18.1%, against 16.6%. Sustainable and Adhesive Solutions sales were USD 281.0 million, down 10.9% from USD 315.4 million, with lower volume and mix including in Healthcare, and currency effects. Its Adjusted EBITDA was USD 32.6 million, against USD 43.3 million, at an 11.6% margin.

Financial Results

Adjusted EPS was USD 0.31 against an estimate of USD 0.25 and USD 0.39 a year earlier. GAAP diluted EPS was a loss of USD 0.03, against a loss of USD 0.06. Adjusted income was USD 17.5 million, against USD 21.6 million, and Adjusted EBITDA was USD 62.3 million, down 7% from USD 66.8 million, a 12.5% margin against 13.0%.

The most significant adjustments were USD 0.26 per share of purchase accounting expenses, which are mainly non-cash intangible amortization, and USD 0.08 per share of restructuring, restructuring related and Impairment expenses. Interest expense was USD 18.1 million, against USD 17.7 million, and the tax expense of USD 2.6 million equated to a 185.7% tax rate, which the company linked to geographic Earnings mix and valuation allowances in certain jurisdictions.

Cash Flow, Debt and Dividend

For the first nine months, cash provided by Operating Activities was USD 117.4 million, free Cash Flow was USD 90.5 million, Gross Profit was USD 295.9 million and Capital spending was USD 26.9 million. Third quarter Operating Cash Flow was USD 48.5 million and free cash flow was USD 37.5 million.

Total debt was USD 976.4 million at September 30, against USD 1,018.2 million at year end, and net debt was USD 879.1 million. Liquidity of approximately USD 373.5 million consisted of USD 97.3 million of cash and USD 276.2 million of revolver availability. The company's debt matures on a staggered basis through 2033. Nine-month Adjusted EBITDA was USD 184.8 million, against USD 171.2 million.

Next Reporting Checkpoints

Sales of USD 499.5 million sit alongside adjusted EPS of USD 0.31, Adjusted EBITDA of USD 62.3 million and net debt of USD 879.1 million.

Management named a handful of dated and stated items. The next quarterly dividend of USD 0.10 per share is payable December 18 to holders of record on November 27, the conference call was scheduled for November 5, and debt maturities run through 2033. Management also said it has confidence in delivering full year financial performance ahead of the prior year, that tornado recovery remains on plan, and that it is executing initiatives aimed at accelerating Revenue growth.