Mativ — Third Quarter 2026 Earnings Summary

Financial Performance

• Reported net sales of $499.5 million for the three months ended September 30, 2026, a decrease of 2.8% year-over-year and 2.3% on an organic basis.
• GAAP net loss was $1.2 million ($0.03 per share), compared to a GAAP net loss of $3.2 million ($0.06 per share) in the prior year period.
• Adjusted income was $17.5 million, with Adjusted EPS of $0.31.
• Adjusted EBITDA was $62.3 million, down 7% versus the prior year period.
• Year-to-date gross profit was $295.9 million, up 7% versus the prior year.
• Year-to-date cash provided by operating activities was $117.4 million, up 3% versus the prior year period.
• Year-to-date free cash flow was $90.5 million, up 5% versus the prior year period.
• Total debt was $976.4 million as of September 30, 2026, an improvement of $52.5 million year-over-year.
• Cash and cash equivalents were $97.3 million, resulting in net debt of $879.1 million.
• Total liquidity was approximately $373.5 million, consisting of $97.3 million in cash and $276.2 million in revolver availability.
• Interest expense was $18.1 million for the quarter, compared to $17.7 million in the prior year, driven by higher average rates on floating debt.
• Tax expense was $2.6 million with an effective tax rate of 185.7%, driven by geographical earnings mix and valuation allowances on losses in certain jurisdictions.

Guidance and Future Outlook

• Management expects to deliver full-year financial performance ahead of the prior year.
• Recovery from the July tornado in Wisconsin is on plan, with inventory losses expected to be fully recoverable.
• The company is pivoting to growth and executing initiatives to accelerate sustainable, profitable revenue growth.
• Capital spending for the nine months ended September 30, 2026, totaled $26.9 million.
• Debt is expected to mature on a staggered basis through 2033.

Business Segments and Product Lines

• Filtration & Advanced Materials (FAM) segment sales were $218.5 million, up 10.2% on a reported basis and 11.6% on an organic basis versus the prior year.
• FAM Adjusted EBITDA was $39.6 million, up 20.4% with a margin of 18.1%, an increase of 150 basis points year-over-year.
• FAM growth was driven by robust demand in Aerospace & Defense and Transportation, higher volume/mix, and higher selling prices.
• Sustainable & Adhesive Solutions (SAS) segment sales were $281.0 million, down 10.9% versus the prior year.
• SAS decline was primarily due to the July tornado incident affecting the Paper & Packaging business, lower volume/mix in Healthcare, and unfavorable currency, partially offset by higher selling prices.
• SAS Adjusted EBITDA was $32.6 million, down 24.7% with a margin of 11.6%, a decrease of 210 basis points year-over-year.
• SAS performance was impacted by lower volume/mix and higher distribution expenses, partially offset by favorable price vs. cost performance.
• Unallocated GAAP operating expenses were $14.2 million, a decrease of $0.6 million year-over-year.
• Unallocated Adjusted EBITDA was a loss of $9.9 million, an increase of $0.5 million versus the prior year.

Market and Competitive Landscape

• The company operates in diversified and growing categories across premium applications in Filtration & Advanced Materials and Sustainable & Adhesive Solutions.
• Management noted strong customer praise for the team's efforts to quickly restore supply following the tornado disruption.
• The company manufactures on three continents and generates sales in over 100 countries.

Risks and Challenges

• A previously disclosed tornado in Wisconsin caused operational disruption in the July quarter, impacting SAS segment sales and Adjusted EBITDA.
• Forward-looking statements are subject to risks including strategic growth initiatives, acquisitions, goodwill impairment, adverse changes in end-market sectors, and competition.
• Risks include supply chain disruptions, inflation, labor shortages, currency exchange rate fluctuations, and changes in tax rates or legislation.
• Potential impacts from weather conditions, climate change, natural disasters, and international conflicts (e.g., Russia-Ukraine, Middle East) are cited as risks to global macroeconomic conditions and supply capabilities.
• Cybersecurity events, data security breaches, and IT system failures are identified as potential risks.

Management Commentary and Tone

• Shruti Singhal, President and CEO, stated that third-quarter performance demonstrated continued momentum, highlighted by FAM's strongest sales growth ever.
• Management expressed confidence in delivering full-year financial performance ahead of the prior year due to disciplined execution and strong cash generation.
• The CEO characterized the tornado response as proof of the company's resilience and execution capabilities.
• Management emphasized a pivot to growth initiatives aimed at driving increased customer and shareholder value.

Other Key Points

• On November 4, 2026, the Company announced a quarterly cash dividend of $0.10 per share, payable on December 18, 2026, to stockholders of record as of November 27, 2026.
• A conference call to review results was scheduled for November 5, 2026, at 8:30 a.m. Eastern time.
• Significant non-GAAP adjustments included $0.26 per share of purchase accounting expenses and $0.08 per share of restructuring, restructuring related, and impairment expenses.
• Tornado-related costs, net of insurance recoveries, were $0.8 million for the quarter.
• Working capital was a $11.9 million source of cash year-to-date, driven by increases in accounts payable and other current liabilities.