Mativ Holdings, Inc. ("Mativ" or the "Company") (NYSE: MATV)
reported earnings results for the three months and year ended
December 31, 2023. On July 6, 2022, Schweitzer-Mauduit
International, Inc. ("SWM") and Neenah, Inc. ("Neenah") completed a
merger of equals ("the Merger"). Financial results for periods
prior to the Merger reflect only the continuing operations of
legacy SWM results. On November 30, 2023, Mativ closed the sale of
its Engineered Papers business (the "EP Divestiture"), which is now
presented as discontinued operations. 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 to the prior year period unless
stated otherwise. Figures may not sum to total due to rounding.
"Comparable" non-GAAP measures are used to compare current period
Mativ continuing operations results with the combined reported
continuing results for legacy Neenah and SWM operations, adjusted
for certain reclassifications and other reporting conformations in
the periods prior to the close of the Merger. The Company's
December 22, 2022 Form 8-K includes reconciliations of periods
prior to the Merger. The Company's December 6, 2023 Form 8-K/A
includes reconciliations of periods prior to the EP
Divestiture.
Mativ Fourth Quarter 2023 Highlights
(Continuing Operations)
- Sales were $452.3 million down 13.7% year over year, reflecting
lower volume
- GAAP loss was $13.6 million, GAAP EPS was $(0.25), and GAAP
Operating Loss was $2.2 million. Results included $10.6 million
($0.19 per share) related to asset write-downs due to footprint
rationalization, integration costs from the Merger, and divestiture
costs from the EP Divestiture
- Adjusted EBITDA was $50.0 million, Adjusted income was $13.2
million, and Adjusted EPS was $0.23 (see non-GAAP reconciliations).
Adjusted EBITDA was down 20% versus the prior year, as impacts from
lower volumes more than offset net benefits of price/input costs
and synergies
Mativ Full Year 2023 Highlights
(Continuing Operations)
- Sales increased 24% to $2,026.0 million, reflecting the full
benefit of the Merger; Sales decreased 9% on a comparable basis,
reflecting lower volume partly offset by higher selling prices and
favorable currency translation
- GAAP Loss was $507.7 million, GAAP EPS was $(9.33), and GAAP
Operating Loss was $413.9 million, which all included significant
expenses related to goodwill impairment, integration, and
restructuring
- Adjusted EBITDA was $213.4 million, Adjusted Income was $47.3
million, and Adjusted EPS was $0.80; Adjusted EBITDA was down 17%
on a comparable basis, as impacts from lower volumes more than
offset benefits of price/input costs and synergies
Management Commentary
Chief Executive Officer Julie Schertell commented, "Fiscal year
2023, our first full year as a combined company, was a pivotal year
for Mativ. Early on, we identified customer de-stocking trends and
assessed potential impacts on our demand expectations near-term. We
developed a comprehensive approach to navigate these headwinds and
then realized, as the year progressed, that the macro-environment
was even more challenging with profound and prolonged customer
de-stocking effects and persistent inflation. The combination and
magnitude of these factors significantly impacted our end markets
and volumes, and challenged us to aggressively adapt our
operations, reduce costs, innovate, and reposition the Company for
a strong future."
"Throughout these headwinds in 2023, we focused on what we could
control and continued to make the right long-term decisions. We
divested Engineered Papers, reduced our debt by over 35%,
consolidated sites, and achieved our targeted Merger synergies
ahead of plan. In January 2024, we also announced an organizational
restructuring initiative that we expect will reduce our
non-operating costs by $40 million over the next three years.”
Ms. Schertell concluded, "Guided by our strategy, we executed
these efforts to set up Mativ for long-term success, and I am
looking forward to demonstrating what we can do in 2024. We are
seeing some momentum in our markets, and I am encouraged by the
opportunities that lie ahead. 2024 is the year of execution, of
putting our strategy in play and executing on our plans to achieve
our goals for growth in sales and EBITDA, generating strong free
cash flow and further reducing our debt and leverage.”
Mativ Fourth Quarter 2023 Financial
Results from Continuing Operations
Note: The Reported Results below reflect consolidated Mativ
results in the current and prior period. See the supplemental
tables titled Non-GAAP Reconciliation of Continuing Operations for
additional financial information regarding the combined company’s
financial information.
Advanced Technical Materials
(ATM)
Three Months Ended December
31,
(in millions; unaudited)
2023
2022
Change
2023
2022
Net Sales
$
362.0
$
409.1
$
(47.1
)
GAAP Operating Profit & Margin %
$
24.6
$
27.6
$
(3.0
)
6.8
%
6.7
%
Adjusted EBITDA & Margin %
$
55.9
$
61.6
$
(5.7
)
15.4
%
15.1
%
Advanced Technical Materials (ATM) segment sales of
$362.0 million were down 11.5% versus the prior year period,
reflecting lower volume partly offset by favorable currency
translation. Lower volume reflected continued customer caution in
the current uncertain economic environment.
GAAP Operating Profit in 2023 included $4.1 million in
restructuring and impairment expenses related to footprint
rationalization. Adjusted EBITDA (see non-GAAP reconciliations)
decreased 9% compared to the prior year period, with lower volumes
offsetting favorable impacts of net selling price/input cost
increases. Adjusted EBITDA margin expanded 30 basis points
year-over-year and 50 basis point sequentially.
Fiber-Based Solutions (FBS)
Three Months Ended December
31,
(in millions; unaudited)
2023
2022
Change
2023
2022
Net Sales
$
90.3
$
115.3
$
(25.0
)
GAAP Operating Profit & Margin %
$
5.7
$
5.8
$
(0.1
)
6.3
%
5.0
%
Adjusted EBITDA & Margin %
$
13.1
$
20.1
$
(7.0
)
14.5
%
17.4
%
Fiber-Based Solutions (FBS) segment sales, comprised
solely of Packaging and Specialty Papers, were $90.3 million, down
21.7% versus a strong prior year period, and in line with the
broader market.
GAAP Operating Profit was $5.7 million. Adjusted EBITDA (see
non-GAAP reconciliations) decreased 35% versus prior year as
favorable net selling price/input costs and cost reduction
initiatives were more than offset by lower volumes and associated
fixed cost under absorption. Adjusted EBITDA margin expanded 30
basis point sequentially.
Unallocated
Three Months Ended December
31,
(in millions; unaudited)
2023
2022
Change
2023
2022
GAAP Operating Expense & % of
Sales
$
(32.5
)
$
(31.4
)
$
(1.1
)
(7.2
)%
(6.0
)%
Adjusted EBITDA & % of Sales
$
(19.0
)
$
(19.4
)
$
0.4
(4.2
)%
(3.7
)%
Unallocated GAAP Operating Expenses included $6.0 million
of EP Divestiture expenses. Adjusted unallocated expenses (EBITDA)
(see non-GAAP reconciliations) were largely in line with prior
year.
Interest expense was $13.4 million versus $13.6
million in the prior year period.
Other expense, net was $1.2 million and decreased $2.9
million compared with the prior year expense of $4.2 million. The
decrease in 2023 was primarily due to losses on foreign exchange
contracts.
Tax rate was a 19.3% benefit during 4Q:23.
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 fourth quarter 2023
results were as follows:
- $0.22 per share of purchase accounting expenses (purchase
accounting expenses reflect primarily ongoing non-cash intangible
asset amortization associated with mergers and acquisitions)
- $0.07 per share of restructuring and other impairment
expenses
- $0.07 per share of expenses related to the EP Divestiture
- $0.05 per share of integration expenses related to the
Merger
Cash Flow & Debt
Year-to-date 2023 cash provided by operating activities of
continuing operations was $76.6 million. Capital spending and
software costs totaled $66.4 million. Working capital was a $19.8
million use of cash, driven by improved inventory efficiencies.
Free cash flow from continuing operations was $10.2 million, with
$22.3 million generated in the fourth quarter.
Total debt was $1,104.6 million as of December 31, 2023, and
total cash was $120.2 million resulting in net debt of $984
million, down $605 million year over year and $670 million
sequentially. Total liquidity was approximately $454 million,
consisting of $120 million of cash and $334 million of revolver
availability. The Company's debt matures on a staggered basis
between 2026 and 2028.
Discontinued Operations
Sales related to the Company's discontinued operations,
Engineered Papers, were $91.8 million in the fourth quarter and
GAAP earnings were $171.3 million, or $3.16 per share. The Company
recorded a gain on sale of $176.3 million.
Dividend & Share
Repurchases
On August 1, 2023, the Company announced capital allocation
changes, including plans to modify the quarterly dividend from
$0.40 to $0.10 per share. The Company announced its next quarterly
cash dividend of $0.10 per share payable on March 22, 2024 to
stockholders of record as of March 8, 2024.
During 2023, the Company used $8.0 million to repurchase shares
as part of publicly announced programs. 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 fourth quarter 2023
results with investors and analysts at 8:30 a.m. Eastern time on
Thursday, February 22, 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.
Mativ will use a presentation in conjunction with its conference
call. The presentation can be found on the Company's website under
the Investor Relations section in advance of the earnings
conference call. The presentation can also be accessed via the
earnings conference call webcast.
About Mativ
Mativ Holdings, Inc. is a global leader in specialty materials
headquartered in Alpharetta, Georgia. The company makes material
impacts on the world every day through a wide range of critical
components and engineered solutions that solve our customers’ most
complex challenges. We manufacture on three continents and generate
sales in nearly 100 countries through our family of
business-to-business and consumer product brands. The company’s two
segments, Filtration & Advanced Materials and Sustainable &
Adhesive Solutions target premium applications across diversified
and growing end-markets, from filtration to healthcare to
sustainable packaging and more. 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 Merger and the Neenah
integration, whether the strategic benefits 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 was 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;
- The possibility the Company may be unable to achieve the
strategic benefits of the EP Divestiture;
- Risks associated with acquisitions, dispositions, strategic
transactions and global asset realignment initiatives of Mativ,
including the sale of the Company's Engineered Papers
business;
- Adverse changes in the filtration, release liners, protective
solutions, industrials and healthcare sectors impacting key ATM
segment 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 in our ATM or FBS operating segments;
- 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;
- Business disruptions from the Merger that will harm the
Company’s business, including current plans and operations;
- The possibility that Mativ may be unable to successfully
integrate Neenah’s operations with those of Mativ and achieve
expected synergies and operating efficiencies within the expected
time-frames or at all;
- Potential adverse reactions or changes to business
relationships resulting from the Merger, including as it relates to
the Company’s ability to successfully renew existing client
contracts on favorable terms or at all and obtain new clients;
- Our ability to attract and retain key personnel, including as a
result of the Merger, labor shortages, labor strikes, stoppages or
other disruptions;
- The substantial indebtedness Mativ has incurred and assumed in
connection with the Merger and the need to generate sufficient cash
flows to service and repay such debt;
- 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
Real) and on interest rates;
- Risks associated with SOFR’s replacement of LIBOR;
- 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, including the dilution caused by Mativ's issuance of
additional shares of its common stock in connection with the
Merger;
- Changes in employment, wage and hour laws and regulations in
the U.S., France and elsewhere, including the loi de Securisation
de l'emploi in France, unionization rule and regulations by the
National Labor Relations Board in the U.S., 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 conflict 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, or new public health
crises that may arise in the future;
- The number, type, outcomes (by judgment or settlement) and
costs of legal, tax, regulatory or administrative proceedings,
litigation and/or amnesty programs, including those in Brazil,
France and Germany;
- 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, 2022 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 ATM and FBS segment
acquisitions, acquisition/merger and integration related costs,
divestiture costs, interest expense, the effect of income tax
provisions and other tax impacts, capital spending, capitalized
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 December
31,
Year Ended December
31,
2023
2022
% Change
2023
2022
% Change
Net sales
$
452.3
$
524.4
(13.7)%
$
2,026.0
$
1,636.9
23.8%
Cost of products sold
366.4
437.0
(16.2)
1,670.2
1,330.9
25.5
Gross profit
85.9
87.4
(1.7)
355.8
306.0
16.3
Selling expense
18.3
18.7
(2.1)
78.9
59.8
31.9
Research and development expense
4.6
6.1
(24.6)
21.2
18.8
12.8
General expense
60.2
58.7
2.6
246.0
248.5
(1.0)
Total nonmanufacturing expenses
83.1
83.5
(0.5)
346.1
327.1
5.8
Goodwill impairment expense
—
—
N.M.
401.0
—
N.M.
Restructuring and other impairment
expense
5.0
1.8
N.M.
22.6
19.1
18.3
Operating profit (loss)
(2.2
)
2.1
N.M.
(413.9
)
(40.2
)
N.M.
Interest expense
13.4
13.6
(1.5)
62.2
57.3
8.6
Other income (expense), net
(1.2
)
(4.2
)
(71.4)
(4.8
)
1.0
N.M.
Loss from continuing operations before
income taxes
(16.8
)
(15.7
)
7.0
(480.9
)
(96.5
)
N.M.
Income tax (expense) benefit
3.2
13.2
(75.8)
(26.8
)
27.6
N.M.
Net loss from continuing operations
(13.6
)
(2.5
)
N.M.
(507.7
)
(68.9
)
N.M.
Income from discontinued operations, net
of tax
171.3
5.0
N.M.
198.2
62.3
N.M.
Net income (loss)
157.7
$
2.5
N.M.
(309.5
)
(6.6
)
N.M.
Dividends to participating securities
—
$
(0.2
)
N.M.
(0.7
)
(0.9
)
(22.2)
Net income (loss) attributable to common
stockholders
157.7
$
2.3
N.M.
(310.2
)
(7.5
)
N.M.
Net income (loss) per share - basic:
Loss per share from continuing
operations
$
(0.25
)
$
(0.05
)
N.M.
$
(9.33
)
$
(1.64
)
N.M.
Income per share from discontinued
operations
3.16
0.09
N.M.
3.64
1.46
N.M.
Basic
$
2.91
$
0.04
N.M.
$
(5.69
)
$
(0.18
)
N.M.
Net income (loss) per share – diluted:
Loss per share from continuing
operations
$
(0.25
)
$
(0.05
)
N.M.
$
(9.33
)
$
(1.64
)
N.M.
Income per share from discontinued
operations
3.14
0.09
N.M.
3.64
1.46
N.M.
Diluted
$
2.89
$
0.04
N.M.
$
(5.69
)
$
(0.18
)
N.M.
Weighted average shares outstanding:
Basic
54,230,400
54,389,900
54,506,900
42,442,200
Diluted
54,499,800
54,686,300
54,506,900
42,442,200
N.M. - Not Meaningful
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
December 31,
2023
December 31,
2022
ASSETS
Cash and cash equivalents
$
120.2
$
101.1
Accounts receivable, net
176.5
178.2
Inventories, net
352.9
414.6
Income taxes receivable
30.6
19.4
Other current assets
32.3
27.6
Current assets held for sale of
discontinued operations
—
233.8
Total current assets
712.5
974.7
Property, plant and equipment, net
672.5
691.5
Finance lease right-of-use assets
18.2
17.3
Operating lease right-of-use assets
45.6
30.6
Deferred income tax benefits
6.4
34.4
Goodwill
474.1
844.2
Intangible assets, net
631.3
710.3
Other assets
81.8
110.1
Noncurrent assets held for sale of
discontinued operations
—
256.1
Total assets
$
2,642.4
$
3,669.2
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current debt
$
2.8
$
33.6
Finance lease liabilities
1.4
0.9
Operating lease liabilities
9.9
8.5
Accounts payable
139.3
180.6
Income taxes payable
14.3
10.2
Accrued expenses and other current
liabilities
113.7
129.0
Current liabilities held for sale of
discontinued operations
—
103.4
Total current liabilities
281.4
466.2
Long-term debt
1,101.8
1,656.4
Finance lease liabilities, noncurrent
18.2
17.6
Operating lease liabilities,
noncurrent
35.3
25.0
Long-term income tax payable
7.7
13.9
Pension and other postretirement
benefits
62.2
60.3
Deferred income tax liabilities
142.3
152.1
Other liabilities
44.4
31.5
Noncurrent liabilities held for sale of
discontinued operations
—
66.9
Total liabilities
1,693.3
2,489.9
Stockholders' equity:
Preferred stock, $0.10 par value per
share; 10,000,000 shares authorized; none issued or outstanding
—
—
Common stock, $0.10 par value per share;
100,000,000 shares authorized; 54,211,124 and 54,929,973 shares
issued and outstanding at December 31, 2023 and 2022,
respectively
5.4
5.5
Additional paid-in-capital
669.6
658.5
Retained earnings
235.0
610.7
Accumulated other comprehensive income
(loss), net of tax
39.1
(95.4
)
Total stockholders' equity
949.1
1,179.3
Total liabilities and stockholders'
equity
$
2,642.4
$
3,669.2
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FROM CONTINUING OPERATIONS
(in millions)
(Unaudited)
Year Ended December
31,
2023
2022
Operating
Net loss
$
(309.5
)
$
(6.6
)
Less: Income from discontinued
operations
198.2
62.3
Loss from continuing operations
(507.7
)
(68.9
)
Non-cash items included in net income
(loss):
Depreciation and amortization
147.8
109.9
Amortization of deferred issuance
costs
7.6
6.4
Goodwill Impairment
401.0
—
Other impairments
18.2
13.8
Deferred income tax
23.8
(28.9
)
Pension and other postretirement
benefits
(8.3
)
(6.5
)
Stock-based compensation
10.5
20.4
Gain on sale of assets
—
(2.9
)
(Gain) loss on foreign currency
transactions
4.8
(7.5
)
Other non-cash items
(12.7
)
2.1
Cash received from settlement of interest
swap agreements
16.4
23.6
Other operating
(5.0
)
—
Net changes in operating working
capital
(19.8
)
63.1
Net cash provided by operating activities
of:
Continuing operations
76.6
124.6
Discontinued operations
30.0
77.6
Net cash provided by operations
106.6
202.2
Investing
Capital spending
(66.0
)
(45.6
)
Capitalized software costs
(0.4
)
(2.6
)
Acquisitions, net of cash acquired
—
(462.5
)
Proceeds from sale of assets
—
7.5
Cash received from settlement of
cross-currency swap contracts
—
35.8
Other investing
5.0
(1.9
)
Net cash provided by (used in) investing
of:
Continuing operations
(61.4
)
(469.3
)
Discontinued operations
608.6
(12.0
)
Net cash provided by (used in)
investing
547.2
(481.3
)
Financing
Cash dividends paid
(55.3
)
(72.2
)
Proceeds from long-term debt
241.0
774.9
Payments on long-term debt
(834.6
)
(340.6
)
Payments for debt issuance costs
(1.5
)
(22.1
)
Payments on financing lease
obligations
(1.0
)
(0.6
)
Purchases of common stock
(10.6
)
(6.9
)
Net cash provided by (used in) financing
of:
Continuing operations
(662.0
)
332.5
Discontinued operations
(0.9
)
(1.0
)
Net cash provided by (used in)
financing
(662.9
)
331.5
Effect of exchange rate changes on cash
and cash equivalents
4.9
(2.7
)
Increase (decrease) in cash and cash
equivalents
(4.2
)
49.7
Cash and cash equivalents at beginning of
period
124.4
74.7
Cash and cash equivalents at end of
period
$
120.2
$
124.4
MATIV HOLDINGS, INC. AND SUBSIDIARIES BUSINESS SEGMENT
REPORTING FROM CONTINUING OPERATIONS (in millions)
(Unaudited)
NOTE REGARDING SEGMENT REPORTING AND COMPARABILITY
On November 30, 2023, Mativ Holdings, Inc. (“Mativ” or the
“Company”) closed on the sale of its Engineered Papers business,
which is now presented as discontinued operations.
Effective July 6, 2022, in connection with the close of the
Merger, Mativ has two reportable segments for financial reporting
purposes: Advanced Technical Materials ("ATM") and Fiber-Based
Solutions ("FBS"). ATM is comprised of the legacy SWM Advanced
Materials & Structures segment and the legacy Neenah Technical
Products segment. FBS is substantially comprised of the legacy
Neenah Fine Paper and Packaging segment. For accounting purposes,
SWM was the surviving entity, thus periods subsequent to the
September 2022 quarter results reflect the merged company's
financials while all prior periods reflect only previously reported
SWM consolidated and segment results.
Net Sales from Continuing
Operations
Three Months Ended December
31,
Year Ended December
31,
2023
2022
% Change
2023
2022
% Change
ATM
$
362.0
$
409.1
(11.5
)%
$
1,610.0
$
1,396.2
15.3
%
FBS
90.3
115.3
(21.7
)%
416.0
240.7
72.8
%
Total Consolidated
$
452.3
$
524.4
(13.7
)%
$
2,026.0
$
1,636.9
23.8
%
Operating Profit from Continuing
Operations
Three Months Ended December
31,
Year Ended December
31,
Return on Net Sales
Return on Net Sales
2023
2022
2023
2022
2023
2022
2023
2022
ATM
$
24.6
$
27.6
6.8
%
6.7
%
$
(281.5
)
$
98.8
(17.5
)%
7.1
%
FBS
5.7
5.8
6.3
%
5.0
%
4.6
15.0
1.1
%
6.2
%
Unallocated
(32.5
)
(31.4
)
(7.2
)%
(6.0
)%
(137.0
)
(154.0
)
(6.8
)%
(9.4
)%
Total Consolidated
$
(2.2
)
$
2.0
(0.5
))%
0.4
%
$
(413.9
)
$
(40.2
)
(20.4
)%
(2.5
)%
Non-GAAP Adjustments to Operating
Profit
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
ATM - Amortization of intangibles and
other purchase accounting adjustments
$
14.5
$
18.1
$
50.4
$
56.4
ATM - Restructuring, impairment, and other
expenses
4.1
3.1
415.3
19.6
FBS - Amortization of intangibles and
other purchase accounting adjustments
1.0
7.7
12.0
16.3
FBS - Restructuring, impairment, and other
expenses
0.3
(0.4
)
10.6
1.1
FBS - Acquisition/Merger and integration
costs
—
—
—
(0.1
)
FBS - Divestiture costs
(1.0
)
—
(0.9
)
—
Unallocated - Restructuring, impairment,
and other expenses
0.4
0.4
1.5
5.6
Unallocated - Acquisition/Merger and
integration costs
3.7
8.5
32.4
68.9
Unallocated - Divestiture costs
6.0
—
11.2
—
Unallocated - Financing fees(1)
2.1
—
4.5
—
Total Consolidated
$
31.1
$
37.4
$
537.0
$
167.8
(1) Financing fees incurred for the
Receivables Sales Agreement during Q3 and Q4 of 2023.
Adjusted Operating Profit from
Continuing Operations
Three Months Ended December
31,
Year Ended December
31,
Return on Net Sales
Return on Net Sales
2023
2022
2023
2022
2023
2022
2023
2022
ATM
$
43.2
$
48.8
11.9
%
11.9
%
$
184.2
$
174.8
11.4
%
12.5
%
FBS
6.0
13.1
6.6
%
11.4
%
26.3
32.3
6.3
%
13.4
%
Unallocated
(20.3
)
(22.5
)
(4.5
)%
(4.3
)%
(87.4
)
(79.5
)
(4.3
)%
(4.9
)%
Total Consolidated
$
28.9
$
39.4
6.4
%
7.5
%
$
123.1
$
127.6
6.1
%
7.8
%
Non-GAAP Adjustments to Adjusted
Operating Profit
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
ATM - Depreciation and stock-based
compensation
$
12.7
$
12.8
$
52.3
$
40.6
FBS - Depreciation and stock-based
compensation
7.1
7.0
30.5
13.9
Unallocated - Depreciation and stock-based
compensation
1.3
3.1
7.5
11.1
Total Consolidated
$
21.1
$
22.9
$
90.3
$
65.6
Adjusted EBITDA from Continuing
Operations
Three Months Ended December
31,
Year Ended December
31,
Return on Net Sales
Return on Net Sales
2023
2022
2023
2022
2023
2022
2023
2022
ATM
$
55.9
$
61.6
15.4
%
15.1
%
$
236.5
$
215.4
14.7
%
15.4
%
FBS
13.1
20.1
14.5
%
17.4
%
56.8
46.2
13.7
%
19.2
%
Unallocated
(19.0
)
(19.4
)
(4.2
)%
(3.7
))%
(79.9
)
(68.4
)
(3.9
)%
(4.2
)%
Total Consolidated
$
50.0
$
62.3
11.1
%
11.9
%
$
213.4
$
193.2
10.5
%
11.8
%
Non-GAAP Reconciliation of Organic Net
Sales Growth
Advanced Technical
Materials
Fiber-Based Solutions
Consolidated Mativ
Three Months Ended December
31,
Mativ 2022 Net Sales from Continuing
Operations
$
409.1
$
115.3
$
524.4
Divestiture/closure adjustments
—
—
—
Mativ 2022 comparable Net Sales from
Continuing Operations
$
409.1
$
115.3
$
524.4
Mativ 2023 Net Sales
$
362.0
$
90.3
$
452.3
Divestiture/closure adjustments
—
—
—
Mativ 2023 comparable Net Sales from
Continuing Operations
$
362.0
$
90.3
$
452.3
Organic growth
(11.5
)%
(21.7
)%
(13.7
)%
Currency effects on 2023
$
6.3
$
1.0
$
7.3
Mativ 2023 comparable Net Sales from
Continuing Operations with Currency Adjustment
$
355.7
$
89.3
$
445.0
Organic constant currency growth
(13.1
)%
(22.5
)%
(15.1
)%
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA
(in millions, except per share
amounts)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Operating profit (loss) from continuing
operations
$
(2.2
)
$
2.0
$
(413.9
)
$
(40.2
)
Plus: Restructuring and other impairment
related expenses
4.8
3.1
26.4
20.6
Plus: Goodwill impairment
—
—
401.0
—
Plus: Purchase accounting adjustments
15.5
25.8
62.4
72.7
Plus: Acquisition/merger and integration
related costs
3.7
8.5
32.4
68.8
Plus: Divestiture costs
5.0
—
10.3
—
Plus: Cybersecurity expenses
—
—
—
5.7
Plus: Financing fees
2.1
—
4.5
—
Adjusted Operating Profit from continuing
operations
$
28.9
$
39.4
$
123.1
$
127.6
Loss from continuing operations
$
(13.6
)
$
(2.5
)
$
(507.7
)
$
(68.9
)
Plus: Restructuring and other impairment
expenses
5.0
$
1.8
22.6
19.1
Less: Tax impact of restructuring and
other impairment expense
(1.1
)
$
(0.5
)
(3.0
)
(4.2
)
Plus: Goodwill impairment
—
$
—
401.0
—
Less: Tax impact of goodwill
impairment
—
$
—
—
—
Less: Gain (loss) on sale of assets
0.1
$
—
0.1
(2.9
)
Plus: Tax impact on gain on sale of
assets
—
$
—
—
0.8
Plus: Other restructuring related
expenses
(0.5
)
$
1.5
3.7
1.5
Less: Tax impact of other restructuring
related expenses
0.1
$
(0.3
)
(0.9
)
(0.3
)
Plus: Purchase accounting adjustments
15.5
$
25.8
62.4
72.7
Less: Tax impact of purchase accounting
adjustments
(3.4
)
$
(5.9
)
(13.6
)
(16.3
)
Less: Litigation/tax settlement
—
$
—
4.9
—
Plus: Tax impact of litigation/tax
settlement
—
$
—
—
—
Plus: Cybersecurity expenses
—
$
—
—
5.7
Less: Tax impact of cybersecurity
expenses
—
$
—
—
(1.3
)
Plus: Acquisition/merger and integration
related costs
3.7
$
8.7
32.9
72.3
Less: Tax impact on acquisition/merger and
integration related costs
(1.0
)
$
(0.7
)
(7.8
)
(10.7
)
Plus: Divestiture costs
5.0
$
—
10.3
0.4
Less: Tax impact of divestiture costs
(1.0
)
$
(0.1
)
(2.3
)
(0.1
)
Less: Luxembourg valuation allowance
release
0.9
$
—
32.6
—
Plus: Reversal of valuation allowance on
prior year tax credits
—
$
—
6.4
—
Plus: Tax legislative changes, net of
other discrete items
3.5
$
(0.8
)
5.7
(1.9
)
Adjusted Income from continuing
operations
$
13.2
$
27.0
$
47.3
$
65.9
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA
(in millions, except per share
amounts)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Loss per share from continuing operations
- diluted
$
(0.25
)
$
(0.05
)
$
(9.33
)
$
(1.64
)
Plus: Restructuring and other impairment
related expenses
0.09
0.03
0.41
0.45
Less: Tax impact of restructuring and
other impairment expense
(0.02
)
(0.01
)
(0.05
)
(0.10
)
Plus: Goodwill impairment
—
—
7.32
—
Less: Tax impact of goodwill
impairment
—
—
—
—
Less: Gain on sale of assets
—
—
—
(0.07
)
Plus: Tax impact on gain on sale of
assets
—
—
—
0.02
Plus: Other restructuring related
expenses
(0.01
)
0.03
0.07
0.04
Less: Tax impact of other restructuring
related expenses
—
(0.01
)
(0.02
)
(0.01
)
Plus: Purchase accounting adjustments
0.28
0.47
1.14
1.71
Less: Tax impact of purchase accounting
adjustment
(0.06
)
(0.11
)
(0.25
)
(0.38
)
Less: Litigation/tax settlement
—
—
0.09
—
Plus: Tax impact of litigation/tax
settlement
—
—
—
—
Plus: Cybersecurity expenses
—
—
—
0.13
Less: Tax impact of cybersecurity
expenses
—
—
—
(0.03
)
Plus: Acquisition/merger and integration
related costs
0.07
0.16
0.60
1.70
Less: Tax impact on acquisition/merger and
integration related costs
(0.02
)
(0.01
)
(0.14
)
(0.25
)
Plus: Divestiture costs
0.09
—
0.19
0.01
Less: Tax impact of divestiture costs
(0.02
)
—
(0.04
)
—
Less: Luxembourg valuation allowance
release
0.02
—
0.59
—
Plus: Reversal of valuation allowance on
prior year tax credits
—
—
0.12
—
Plus: Tax legislative changes, net of
other discrete items
0.06
(0.01
)
0.10
(0.04
)
Adjusted Earnings Per Share from
continuing operations - diluted
$
0.23
$
0.49
$
0.80
$
1.54
MATIV HOLDINGS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES AND SUPPLEMENTAL DATA
(in millions, except per share
amounts)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Net Loss from continuing operations
$
(13.6
)
$
(2.5
)
$
(507.7
)
$
(68.9
)
Plus: Interest expense
13.4
13.6
62.2
57.3
Plus: Financing fees
2.1
—
4.5
—
Plus: Provision for income taxes
(3.2
)
(13.2
)
26.8
(27.6
)
Plus: Depreciation & amortization
36.1
37.3
146.6
109.8
Plus: Stock compensation expense
0.9
2.3
4.9
9.5
Plus: Inventory step up expense
—
9.3
1.4
19.3
Plus: Restructuring and impairment
expense
5.0
1.8
22.6
19.1
Plus: Goodwill impairment
—
—
401.0
—
Plus: Other restructuring related
expense
(0.5
)
1.2
3.7
1.2
Plus: Cybersecurity expenses
—
—
—
5.7
Plus: Acquisition/merger and integration
related costs
3.7
8.4
32.4
68.9
Plus: Divestiture costs
4.9
—
10.2
—
Plus: Litigation/tax settlement
—
—
4.9
—
Plus: Other income, net
1.2
4.1
(0.1
)
(1.1
)
Adjusted EBITDA from continuing
operations
$
50.0
$
62.3
$
213.4
$
193.2
Cash provided by operating activities of
continuing operations
$
38.8
$
169.2
$
76.6
$
124.6
Less: Capital spending
(16.6
)
(18.5
)
(66.0
)
(45.6
)
Less: Capitalized software costs
0.1
(0.5
)
(0.4
)
(2.6
)
Free Cash Flow from continuing
operations
$
22.3
$
150.2
$
10.2
$
76.4
December 31, 2023
December 31, 2022
Total Debt
$
1,104.6
$
1,690.0
Less: Cash
120.2
101.1
Net Debt from continuing operations
$
984.4
$
1,588.9
Non-GAAP Reconciliation of Continuing
Operations for Comparability
(in millions) (Unaudited)
Three Months Ended
December 31, 2022
December 31, 2023
Legacy Mativ
Adjustments(1)
Mativ Continuing
Operations
Mativ Continuing
Operations
Advanced Technical Materials
(ATM)
Net Sales
$
409.1
$
—
$
409.1
$
362.0
GAAP Operating Profit
27.6
—
27.6
24.6
Amortization of intangibles and other
purchase accounting adjustments
18.1
—
18.1
14.5
Restructuring, impairment, and other
expenses
3.1
—
3.1
4.1
Adjusted Operating Profit
$
48.8
$
—
$
48.8
$
43.2
Adjusted Operating Profit Margin
11.9
%
N/A
11.9
%
11.9
%
Depreciation and stock-based compensation
expense (2)
12.8
—
12.8
12.7
Adjusted EBITDA
$
61.6
$
—
$
61.6
$
55.9
Adjusted EBITDA Margin
15.1
%
N/A
15.1
%
15.4
%
Fiber-Based Solutions (FBS)
Net Sales
$
251.0
$
(135.7
)
$
115.3
$
90.3
GAAP Operating Profit
30.7
(24.9
)
5.8
5.7
Amortization of intangibles and other
purchase accounting adjustments
7.7
—
7.7
1.0
Restructuring, impairment, and other
expenses
(0.4
)
—
(0.4
)
0.3
Divestiture costs
—
—
—
(1.0
)
Adjusted Operating Profit
$
38.0
$
(24.9
)
$
13.1
$
6.0
Adjusted Operating Profit Margin
15.1
%
N/A
11.4
%
6.6
%
Depreciation and stock-based compensation
expense (2)
12.2
(5.2
)
7.0
7.1
Adjusted EBITDA
$
50.2
$
(30.1
)
$
20.1
$
13.1
Adjusted EBITDA Margin
20.0
%
N/A
17.4
%
14.5
%
Non-GAAP Reconciliation of Continuing
Operations for Comparability
(in millions) (Unaudited)
Three Months Ended
December 31, 2022
December 31, 2023
Legacy Mativ
Adjustments(1)
Mativ Continuing
Operations
Mativ Continuing
Operations
Corporate Unallocated
GAAP Operating Loss
$
(31.4
)
$
—
$
(31.4
)
$
(32.5
)
Restructuring, impairment, and other
expenses
0.4
—
0.4
0.4
Acquisition/Merger and integration
costs
8.5
—
8.5
3.7
Divestiture costs
—
—
—
6.0
Financing fees
—
—
—
2.1
Adjusted Operating Loss
$
(22.5
)
$
—
$
(22.5
)
$
(20.3
)
% of total Net Sales
(3.4
)%
N/A
(4.3
)%
(4.5
)%
Depreciation and stock-based compensation
expense (2)
3.1
—
3.1
1.3
Adjusted EBITDA
$
(19.4
)
$
—
$
(19.4
)
$
(19.0
)
% of total Net Sales
(2.9
)%
N/A
(3.7
)%
(4.2
)%
Consolidated
Net Sales
$
660.1
$
(135.7
)
$
524.4
$
452.3
GAAP Operating Profit
26.9
(24.9
)
2.0
(2.2
)
Amortization of intangibles and other
purchase accounting adjustments
25.8
—
25.8
15.5
Restructuring, impairment, and other
expenses
3.1
—
3.1
4.8
Acquisition/Merger and integration
costs
8.5
—
8.5
3.7
Divestiture costs
—
—
—
5.0
Financing fees
—
—
—
2.1
Adjusted Operating Profit
$
64.3
$
(24.9
)
$
39.4
$
28.9
Adjusted Operating Profit Margin
9.7
%
N/A
7.5
%
6.4
%
Depreciation and stock-based compensation
expense (2)
28.1
(5.2
)
22.9
21.1
Adjusted EBITDA
$
92.4
$
(30.1
)
$
62.3
$
50.0
Adjusted EBITDA Margin
14.0
%
N/A
11.9
%
11.1
%
(1) On November 30, 2023, the company
closed on the sale of its Engineered Papers (EP) business. The EP
business is accounted for as discontinued operations which requires
retrospective presentation of continuing operations for all periods
presented. The adjustments remove the results of the discontinued
EP business from each line within the Non-GAAP Reconciliation of
Continuing Operations for Comparability tables.
(2) Depreciation and stock-based
compensation excludes stock-based compensation included in
acquisition/merger and integration costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221497218/en/
Chris Kuepper, IRC Director, Investor Relations +1-770-569-4229
Website: http://www.mativ.com
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