Mativ Holdings Inc
11/06/2025 | Press release | Distributed by Public on 11/06/2025 15:53
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion of our financial condition and results of operations. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report and the audited consolidated financial statements and related notes and the selected financial data included in our Annual Report on Form 10-K for the year ended December 31, 2024. The discussion of our financial condition and results of operations includes various forward-looking statements about our markets, the demand for our products and our future prospects. These statements are based on certain assumptions we consider reasonable. For information about risks and exposures relating to us and our business, you should read the section entitled "Risk Factors" in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, the section entitled "Forward-Looking Statements" at the end of this Item 2 and the section entitled "Risk Factors" at Part II, Item 1A hereof. Unless the context indicates otherwise, references to "Mativ," "we," "us," "our," the "Company" or similar terms include Mativ Holdings, Inc. and our consolidated subsidiaries.
This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with an understanding of our recent performance, our financial condition and our prospects.
This MD&A discusses the financial condition and results of operations of the Company as of and for the three and nine months ended September 30, 2025.
Recent Developments
Throughout 2025, the U.S. government has implemented a comprehensive tariff regime, including baseline tariffs on products imported from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China. Increased tariffs by the United States have led and may continue to lead to the imposition of retaliatory tariffs by foreign governments. Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Uncertainties about tariffs and their effects on trading relationships, including as a result of future developments, may impact the macroeconomic conditions in the markets in which we operate. Although we are continuing to monitor the impact of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.
Liquidity & Debt Overview
As of September 30, 2025, the Company had $1,028.9 million of total debt, $97.1 million of Cash and cash equivalents, $5.8 million of Restricted cash, and $420.2 million of undrawn capacity on its $600.0 million revolving line of credit facility (the "Revolving Facility"). Per the terms of the Company's amended credit agreement (the "Amended Credit Agreement"), net leverage was 4.2x at the end of the third quarter, versus a current maximum covenant ratio of 5.50x.
As of September 30, 2025, the Company's nearest debt maturity was our Revolving Credit Facility, Term Loan A Facility, and Delayed Draw Term Loan Facility, due on May 6, 2027. Refer to "Liquidity and Capital Resources" section for additional detail.
SUMMARY
|
Three Months Ended September 30, |
Percent of Net Sales |
Nine Months Ended September 30, |
Percent of Net Sales | ||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except per share amounts) | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 513.7 | $ | 498.5 | 100.0 | % | 100.0 | % | $ | 1,523.9 | $ | 1,522.5 | 100.0 | % | 100.0 | % | |||||||||||||||||||||||||||||||
|
Gross profit
|
$ | 99.4 | $ | 93.6 | 19.3 | % | 18.8 | % | $ | 275.7 | $ | 286.5 | 18.1 | % | 18.8 | % | |||||||||||||||||||||||||||||||
| Restructuring & other impairment expense | $ | 8.1 | $ | 11.2 | 1.6 | % | 2.2 | % | $ | 18.2 | $ | 37.4 | 1.2 | % | 2.5 | % | |||||||||||||||||||||||||||||||
|
Operating profit (loss)
|
$ | 16.0 | $ | 7.0 | 3.1 | % | 1.4 | % | $ | (394.5) | $ | 3.7 | (25.9) | % | 0.2 | % | |||||||||||||||||||||||||||||||
| Interest expense | $ | 17.7 | $ | 18.3 | 3.4 | % | 3.7 | % | $ | 54.1 | $ | 55.0 | 3.6 | % | 3.6 | % | |||||||||||||||||||||||||||||||
|
Net loss
|
$ | (3.2) | $ | (20.8) | (0.6) | % | (4.2) | % | $ | (438.2) | $ | (50.2) | (28.8) | % | (3.3) | % | |||||||||||||||||||||||||||||||
|
Diluted loss per share
|
$ | (0.06) | $ | (0.38) | $ | (8.04) | $ | (0.93) | |||||||||||||||||||||||||||||||||||||||
|
Cash provided by operations
|
$ | 72.8 | $ | 37.6 | $ | 114.5 | $ | 70.7 | |||||||||||||||||||||||||||||||||||||||
| Capital spending | $ | 6.1 | $ | 12.1 | $ | 28.7 | $ | 32.9 | |||||||||||||||||||||||||||||||||||||||
RESULTS OF OPERATIONS
Comparison of the Three Months Ended September 30, 2025 and 2024
Net Sales
The following table presents net sales by segment for the three months ended September 30, 2025 and 2024 (in millions):
| Three Months Ended | |||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | Change | Percent Change | ||||||||||||||||||||
| Filtration & Advanced Materials | $ | 198.3 | $ | 189.6 | $ | 8.7 | 4.6 | % | |||||||||||||||
| Sustainable & Adhesive Solutions | 315.4 | 308.9 | 6.5 | 2.1 | % | ||||||||||||||||||
| Total | $ | 513.7 | $ | 498.5 | $ | 15.2 | 3.0 | % | |||||||||||||||
Consolidated net sales of $513.7 million during the three months ended September 30, 2025 increased $15.2 million or 3.0%, compared to the prior-year quarter.
FAM segment net sales of $198.3 million during the three months ended September 30, 2025 increased $8.7 million, or 4.6%, compared to the prior-year quarter. The FAM net sales increase reflected higher volume/mix (an approximately 4% increase) along with favorable currency translation (an approximately 2% increase), partially offset by lower selling prices (an approximately 1% decrease).
SAS segment net sales of $315.4 million during the three months ended September 30, 2025 increased $6.5 million, or 2.1%, compared to the prior-year quarter, reflecting higher volume/mix (an approximately 3% increase), higher selling prices (an approximately 1% increase) and favorable currency translation (an approximately 1% increase), partially offset by sales associated with exited facilities in the prior year (an approximately 3% decrease).
Gross Profit
The following table presents gross profit for the three months ended September 30, 2025 and 2024 (in millions):
| Three Months Ended | Percent Change | Percent of Net Sales | |||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Net sales | $ | 513.7 | $ | 498.5 | $ | 15.2 | 3.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||||||
| Cost of products sold | 414.3 | 404.9 | 9.4 | 2.3 | % | 80.7 | % | 81.2 | % | ||||||||||||||||||||||||||
|
Gross profit
|
$ | 99.4 | $ | 93.6 | $ | 5.8 | 6.2 | % | 19.3 | % | 18.8 | % | |||||||||||||||||||||||
Gross profit of $99.4 million during the three months ended September 30, 2025 increased $5.8 million, or 6.2%, compared to the prior-year quarter. The increase in gross profit reflected favorable relative net selling price versus input cost performance, higher volume/mix, and lower manufacturing costs, partially offset by higher distribution costs.
Nonmanufacturing Expenses
The following table presents nonmanufacturing expenses for the three months ended September 30, 2025 and 2024 (in millions):
| Three Months Ended | Percent Change | Percent of Net Sales | |||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Selling and general expense | $ | 53.7 | $ | 54.3 | $ | (0.6) | (1.1) | % | 10.5 | % | 10.9 | % | |||||||||||||||||||||||
| Research and development expense | 5.6 | 5.7 | (0.1) | (1.8) | % | 1.1 | % | 1.1 | % | ||||||||||||||||||||||||||
| Intangible asset amortization expense | 16.0 | 15.4 | 0.6 | 3.9 | % | 3.1 | % | 3.1 | % | ||||||||||||||||||||||||||
|
Nonmanufacturing expenses
|
$ | 75.3 | $ | 75.4 | $ | (0.1) | (0.1) | % | 14.7 | % | 15.1 | % | |||||||||||||||||||||||
Nonmanufacturing expenses of $75.3 million during the three months ended September 30, 2025 decreased $0.1 million, or 0.1%, compared to the prior-year quarter.
Restructuring and Other Impairment Expense
The following table presents restructuring and other impairment expense for the three months ended September 30, 2025 and 2024 (in millions):
| Three Months Ended | Percent of Net Sales | ||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||
| Filtration & Advanced Materials | $ | 7.1 | $ | 0.7 | $ | 6.4 | 3.6 | % | 0.4 | % | |||||||||||||||||||
| Sustainable & Adhesive Solutions | 1.0 | 10.4 | (9.4) | 0.3 | % | 3.4 | % | ||||||||||||||||||||||
| Unallocated expenses | - | 0.1 | (0.1) | ||||||||||||||||||||||||||
| Total | $ | 8.1 | $ | 11.2 | $ | (3.1) | 1.6 | % | 2.2 | % | |||||||||||||||||||
The Company incurred total restructuring and other impairment expense of $8.1 million and $11.2 million in the three months ended September 30, 2025 and 2024, respectively.
Restructuring and other impairment expenses in the FAM segment for the three months ended September 30, 2025 included impairment charges of $6.0 million, along with severance and other costs associated with facility exits initiated in current and prior years. Restructuring and other impairment expenses for the three months ended September 30, 2024 consisted of severance charges, along with costs associated with facility exits initiated in prior years.
Restructuring and other impairment expenses in the SAS segment for the three months ended September 30, 2025 consisted of severance charges. Restructuring and other impairment expenses for the three months ended September 30, 2024 included severance charges, along with costs associated with facility exits initiated in prior years.
Operating Profit (Loss)
The following table presents operating profit (loss) by segment for the three months ended September 30, 2025 and 2024 (in millions):
| Three Months Ended |
Percent Change |
Return on Net Sales | |||||||||||||||||||||||||||||||||
| September 30, 2025 | September 30, 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Filtration & Advanced Materials | $ | 11.4 | $ | 19.9 | $ | (8.5) | (42.7) | % | 5.7 | % | 10.5 | % | |||||||||||||||||||||||
| Sustainable & Adhesive Solutions | 28.4 | 10.3 | 18.1 | N.M. | 9.0 | % | 3.3 | % | |||||||||||||||||||||||||||
| Unallocated expenses | (23.8) | (23.2) | (0.6) | 2.6 | % | ||||||||||||||||||||||||||||||
| Total | $ | 16.0 | $ | 7.0 | $ | 9.0 | N.M. | 3.1 | % | 1.4 | % | ||||||||||||||||||||||||
Operating profit of $16.0 million during the three months ended September 30, 2025, increased $9.0 million, compared to the prior year period.
In the FAM segment, operating income was $11.4 million during the three months ended September 30, 2025 decreased $8.5 million, or 42.7%, compared to the prior year period, primarily due to higher restructuring and other impairment expenses and manufacturing costs, partially offset by higher volume/mix.
In the SAS segment, operating income of $28.4 million during the three months ended September 30, 2025 increased $18.1 million, compared to the prior year period, driven by lower restructuring and other impairment expenses, favorable net selling price versus input cost performance, lower manufacturing costs and lower selling and general expenses, partially offset by unfavorable mix and higher distribution costs.
Unallocated expenses of $23.8 million during the three months ended September 30, 2025 increased $0.6 million, or 2.6%, compared to the prior year period.
Interest Expense
Interest expense of $17.7 million during the three months ended September 30, 2025 decreased $0.6 million, or 3.3%, compared to the prior year period.
Other Expense, Net
Other expense was $3.9 million during the three months ended September 30, 2025, compared to the prior year period expense of $12.7 million. The current period includes non-cash settlement charges associated with our U.S. Pension Plan.
Income Taxes
A $2.4 million income tax benefit in the three months ended September 30, 2025 resulted in an effective tax rate of 42.9% compared with 13.3% in the prior year period. The net change was primarily due to the impact from a one-time tax adjustment and mix of earnings in the current period.
Net Loss and Net Loss per Share
Net loss during the three months ended September 30, 2025 was $3.2 million, or $0.06 per diluted share, compared with net loss of $20.8 million, or $0.38 per diluted share, during the prior-year quarter.
RESULTS OF OPERATIONS
Comparison of the Nine Months Ended September 30, 2025 and 2024
Net Sales
The following table presents net sales by segment (in millions):
|
Nine Months Ended September 30, |
|||||||||||||||||||||||
| 2025 | 2024 | Change | Percent Change | ||||||||||||||||||||
|
Filtration & Advanced Materials
|
$ | 590.3 | $ | 598.7 | $ | (8.4) | (1.4) | % | |||||||||||||||
|
Sustainable & Adhesive Solutions
|
933.6 | 923.8 | 9.8 | 1.1 | % | ||||||||||||||||||
| Total | $ | 1,523.9 | $ | 1,522.5 | $ | 1.4 | 0.1 | % | |||||||||||||||
Consolidated net sales of $1,523.9 million during the nine months ended September 30, 2025 increased $1.4 million, or 0.1%, compared to the prior year period.
FAM segment net sales of $590.3 million during the nine months ended September 30, 2025 decreased $8.4 million, or 1.4%, compared to the prior year period primarily due to lower volume/mix (an approximately 1% decrease), and lower selling prices (an approximately 1% decrease).
SAS segment net sales of $933.6 million during the nine months ended September 30, 2025 increased $9.8 million, or 1.1%, compared to the prior year period, reflecting higher volume/mix (an approximately 3% increase), higher selling prices (an approximately 1% increase), partially offset by sales associated with exited facilities in the prior year (an approximately 4% decrease).
Gross Profit
The following table presents gross profit (in millions):
|
Nine Months Ended September 30, |
Percent Change | Percent of Net Sales | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Net sales | $ | 1,523.9 | $ | 1,522.5 | $ | 1.4 | 0.1 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||||||
| Cost of products sold | 1,248.2 | 1,236.0 | 12.2 | 1.0 | % | 81.9 | % | 81.2 | % | ||||||||||||||||||||||||||
|
Gross profit
|
$ | 275.7 | $ | 286.5 | $ | (10.8) | (3.8) | % | 18.1 | % | 18.8 | % | |||||||||||||||||||||||
Gross profit of $275.7 million during the nine months ended September 30, 2025 decreased $10.8 million, or 3.8%, compared to the prior year period, reflecting higher manufacturing and distribution costs, partially offset by higher volume/mix.
Nonmanufacturing Expenses
The following table presents nonmanufacturing expenses (in millions):
|
Nine Months Ended September 30, |
Percent Change | Percent of Net Sales | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Selling and general expense | $ | 174.2 | $ | 181.0 | $ | (6.8) | (3.8) | % | 11.4 | % | 11.9 | % | |||||||||||||||||||||||
| Research and development expense | 18.6 | 17.5 | 1.1 | 6.3 | % | 1.2 | % | 1.1 | % | ||||||||||||||||||||||||||
| Intangible asset amortization expense | 47.3 | 46.9 | 0.4 | 0.9 | % | 3.1 | % | 3.1 | % | ||||||||||||||||||||||||||
|
Nonmanufacturing expenses
|
$ | 240.1 | $ | 245.4 | $ | (5.3) | (2.2) | % | 15.8 | % | 16.1 | % | |||||||||||||||||||||||
Nonmanufacturing expenses of $240.1 million during the nine months ended September 30, 2025 decreased $5.3 million, or 2.2%, compared to the prior year period primarily due to lower selling and general expense, as a result of actions taken under the Plan, partially offset by $5.9 million incurred during the first quarter of 2025 related to our previously disclosed Chief Executive Officer transition.
Restructuring and Other Impairment Expense
The following table presents restructuring and other impairment expense by segment (in millions):
|
Nine Months Ended September 30, |
Percent of Net Sales | ||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||
|
Filtration & Advanced Materials
|
$ | 15.3 | $ | 5.2 | $ | 10.1 | 2.6 | % | 0.9 | % | |||||||||||||||||||
|
Sustainable & Adhesive Solutions
|
1.5 | 28.8 | (27.3) | 0.2 | % | 3.1 | % | ||||||||||||||||||||||
| Unallocated expenses | 1.4 | 3.4 | (2.0) | ||||||||||||||||||||||||||
| Total | $ | 18.2 | $ | 37.4 | $ | (19.2) | 1.2 | % | 2.5 | % | |||||||||||||||||||
The Company incurred total restructuring and other impairment expense of $18.2 million in the nine months ended September 30, 2025 compared with $37.4 million in the prior year period.
Restructuring and other impairment expenses in the FAM segment for the nine months ended September 30, 2025 included impairment charges of $11.3 million, along with severance and other costs associated with facility exits initiated in current and prior years. Restructuring and other impairment expenses for the nine months ended September 30, 2024 consisted of severance charges, along with costs associated with facility exits initiated in prior years.
Restructuring and other impairment expenses in the SAS segment for the nine months ended September 30, 2025 consisted of severance charges. Restructuring and other impairment expenses for the nine months ended September 30, 2024 included severance charges, along with costs associated with facility exits initiated in prior years.
Operating Profit (Loss)
The following table presents operating profit (loss) by segment (in millions):
|
Nine Months Ended September 30, |
Percent Change | Return on Net Sales | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | |||||||||||||||||||||||||||||||
|
Filtration & Advanced Materials
|
$ | (376.0) | $ | 59.7 | $ | (435.7) | N.M. | (63.7) | % | 10.0 | % | ||||||||||||||||||||||||
|
Sustainable & Adhesive Solutions
|
66.2 | 30.1 | 36.1 | N.M. | 7.1 | % | 3.3 | % | |||||||||||||||||||||||||||
| Unallocated expenses | (84.7) | (86.1) | 1.4 | (1.6) | % | ||||||||||||||||||||||||||||||
| Total | $ | (394.5) | $ | 3.7 | $ | (398.2) | N.M. | (25.9) | % | 0.2 | % | ||||||||||||||||||||||||
Operating loss was $394.5 million during the nine months ended September 30, 2025 compared to operating profit of $3.7 million in the prior year period.
In the FAM segment, operating loss was $376.0 million during the nine months ended September 30, 2025 reflecting a $435.7 million decrease, compared to operating profit of $59.7 million in the prior year period primarily due to the $411.9 million goodwill impairment during the first quarter of 2025, see Note 6. Goodwill. Excluding the goodwill impairment, operating profit was $35.9 million, a $23.8 million decrease from the prior year due to higher restructuring and other impairment expenses, higher manufacturing and distribution costs, unfavorable net selling price versus input cost performance, partially offset by higher volume/mix and lower selling and general expenses.
In the SAS segment, operating profit was $66.2 million during the nine months ended September 30, 2025 reflecting a $36.1 million increase, compared to the prior year period, driven by lower restructuring and other impairment expenses, favorable net selling price versus input cost performance, lower selling and general expenses and lower manufacturing costs, partially offset by higher distribution costs.
Unallocated expenses of $84.7 million during the nine months ended September 30, 2025 decreased $1.4 million compared to the prior year, primarily related to a decrease in selling and general expenses as a result of actions taken under the Plan.
Interest Expense
Interest expense of $54.1 million during the nine months ended September 30, 2025 decreased $0.9 million, or 1.6%, compared to the prior year period.
Other Expense, Net
Other expense was $4.2 million during the nine months ended September 30, 2025, compared to the prior year period expense of $12.1 million in the prior year period. The current period includes non-cash settlement charges associated with our U.S. Pension Plan.
Income Taxes
A $14.6 million income tax benefit in the nine months ended September 30, 2025 resulted in an effective tax rate of 3.2% compared with 20.8% in the prior year period. The net change was primarily due to the impact from a $57.0 million increase to our valuation allowance, goodwill impairment not deductible for tax purposes, and mix of earnings in the current period.
Net Loss and Net Loss per Share
Net loss during the nine months ended September 30, 2025 was $438.2 million, or $(8.04) per diluted share, compared to net loss of $50.2 million, or $(0.93) per diluted share, during the prior year period.
LIQUIDITY AND CAPITAL RESOURCES
A major factor in our liquidity and capital resource planning is our generation of cash flow from operations, which is sensitive to changes in the mix of products sold, volume and pricing of our products, as well as changes in our production volumes, costs and working capital. Our liquidity is supplemented by funds available under our Revolving Facility with a syndicate of banks that is used as either operating conditions or strategic opportunities warrant. Market conditions permitting, we may also seek to access the capital markets as we deem appropriate.
Cash Requirements
As of September 30, 2025, $78.4 million of the Company's $97.1 million of Cash and cash equivalents was held by foreign subsidiaries. Restricted cash of $5.8 million primarily represents retained contributions associated with our UK Pension scheme, the use of which is restricted to obligations related to the scheme. We believe our sources of liquidity and capital, including cash on-hand, cash generated from operations, our Revolving Facility, and our Receivables Sales Agreement (an off-balance sheet arrangement as defined in Item 303(a)(4)(ii) of SEC Regulation S-K), will be sufficient to finance our continued operations, our current and long-term growth plan, and dividend payments.
Working Capital
As of September 30, 2025, the Company had net operating working capital of $354.8 million, including Cash and cash equivalents of $97.1 million, compared to net operating working capital of $386.2 million, including Cash and cash equivalents of $94.3 million as of December 31, 2024. The decrease was attributable primarily to an increase in accounts payable and accrued expenses and other current liabilities, along with a decrease in inventories, partially offset by an increase in accounts receivable.
Cash Provided By Operating Activities
Net cash provided by operating activities was $114.5 million during the nine months ended September 30, 2025 compared to net cash provided of $70.7 million during the prior year period. The increase was due to favorable year-over-year movements in working capital related cash flows and lower cash payments associated with restructuring activities.
During the nine months ended September 30, 2025, net changes in operating working capital resulted in cash inflows of $22.5 million, compared to $0.8 million of inflows during the prior year period. The $21.7 million change was driven by inflows associated with inventories, partially offset by changes in accounts payable and accrued expenses and other current liabilities.
Cash Used In Investing Activities
Cash used in investing activities during the nine months ended September 30, 2025 was $23.0 million, compared to cash outflows of $29.4 million during the prior year period, primarily attributable to changes in proceeds from settlement of swap contracts. Capital spending was $28.7 million compared to $32.9 million in the prior year period.
Cash Provided By (Used In) Financing Activities
Cash used in financing activities during the nine months ended September 30, 2025 was $87.8 million, compared to cash inflows of $12.2 million during the prior year period. During the nine months ended September 30, 2025, financing activities primarily consisted of $64.0 million of borrowings under the Revolving Facility, $16.8 million of dividends paid to the Company's stockholders, and payments on our long-term debt of $131.1 million.
During the prior year period, financing activities primarily consisted of $127.0 million of proceeds from borrowings under the Revolving Facility, $97.0 million of payments on our long-term debt, and $16.2 million of dividends paid to the Company's stockholders.
The Company presently believes the sources of liquidity discussed above are sufficient to meet our anticipated funding needs for the foreseeable future.
Dividends and Share Repurchases
On November 5, 2025, we announced a cash dividend of $0.10 per share payable on December 19, 2025 to stockholders of record as of November 28, 2025. The covenants contained in the Indenture governing the Notes and Amended Credit Agreement require that we maintain certain financial ratios as disclosed in Note 9. Debt of the notes to the unaudited condensed consolidated financial statements, none of which under normal business conditions materially limit our ability to pay such dividends. We will continue to assess our dividend policy in light of our overall strategy, cash generation, debt levels and ongoing requirements for cash to fund operations and to pursue possible strategic opportunities.
Debt Instruments and Related Covenants
The following table presents activity related to our debt instruments for the nine months ended September 30, 2025 and 2024 (in millions):
|
Nine Months Ended September 30, |
|||||||||||
| 2025 | 2024 | ||||||||||
| Proceeds from long-term debt | $ | 64.0 | $ | 127.0 | |||||||
| Payments on long-term debt | (131.1) | (97.0) | |||||||||
|
Net proceeds (payments) from borrowings
|
$ | (67.1) | $ | 30.0 | |||||||
Net payments from borrowings were $67.1 million during the nine months ended September 30, 2025, compared to net proceeds from borrowings of $30.0 million during the prior year period.
Unused borrowing capacity under the Amended Credit Agreement was $420.2 million as of September 30, 2025.
The Company was in compliance with all of its covenants under the Indenture and Amended Credit Agreement at September 30, 2025. With the current level of borrowing and forecasted results, we expect to remain in compliance with financial covenants under the Amended Credit Agreement.
Our total debt to capital ratios at September 30, 2025 and December 31, 2024 were 72.1% and 55.9%, respectively.
Critical Accounting Policies and Estimates
The preparation of our unaudited condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions and estimates that affect the amounts reported. There have been no material changes to the critical accounting policies and estimates described in our Form 10-K for the 2024 fiscal year ended December 31, 2024, other than the below item related to goodwill.
During the first quarter of 2025, primarily in response to a sustained decline in the Company's share price, an interim quantitative goodwill impairment test was performed.
While significant estimates and assumptions related to forecasted future cash flows used in the March 1, 2025, interim impairment test were generally aligned with those used in the annual impairment test performed as of October 1, 2024, the discount rate for the FAM reporting unit was increased to 14%, to reflect a market participant view of additional risk associated with achieving forecasted cash flows in the growing end markets with which FAM is aligned. The interim impairment test resulted in a full (non-cash) impairment of all goodwill attributable to the FAM reporting unit of $411.9 million.
The fair value of the SAS reporting unit, was estimated to exceed its carrying value by approximately 6% as of March 1, 2025. Forecasted cash flows for SAS are primarily aligned with both growing and mature end markets, therefore it is subject to less risk than FAM. The interim impairment test for SAS utilized a discount and long-term growth rates of 10.5% and 2%, respectively. Considering the Company's share price as of March 31, 2025, a 100bps increase in the SAS discount rate would result in an implied enterprise control premium of nil and an impairment of approximately $15.0 million.
The Company's ability to achieve forecasted cash flows in SAS may be negatively impacted by factors including, but not limited to, deterioration of general economic conditions, seasonal or cyclical market and industry fluctuations, adverse changes in our end-market sectors, and the imposition of tariffs and other trade barriers. Unfavorable changes in these factors, along with further sustained declines in our share price, could impact the fair value of SAS, leading to possible future impairment charges. No additional indicators of impairment, other than the sustained decline in share price, were identified for SAS as a result of the interim impairment test.
For further information about our critical accounting policies, please see the discussion of critical accounting policies in our Annual Report on Form 10-K for the year ended December 31, 2024 in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates."
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q 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 the Act and other legal protections. Forward-looking statements include, without limitation, those regarding our expectations related to the impact of tariffs, the incurrence of additional debt and expected maturities of the Company's debt obligations, the adequacy of our sources of liquidity and capital, acquisition integration and growth prospects (including international growth), the cost and timing of our restructuring actions, the impact of ongoing litigation matters and environmental claims, the amount of capital spending and/or common stock repurchases, future cash flows, purchase accounting impacts, impacts and timing of our cost-reduction and cost-optimization initiatives, profitability, and cash flow, 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.
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 the Company's business shall 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. These statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from our expectations as of the date of this report. These risks include, among other things, those set forth in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024, and otherwise in our reports and filings with the Securities and Exchange Commission ("SEC"), as well as 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;
•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 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, the imposition of any future additional tariffs and other trade barriers, the effects of retaliatory trade measures, and the impact of tariff uncertainty on macroeconomic conditions;
•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;
•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;
•Information technology system failures, data security breaches, network disruptions, and cybersecurity events; and
•Other factors described elsewhere in this document and from time to time in documents that we file with 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.
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.
Mativ Holdings Inc published this content on November 06, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 06, 2025 at 21:54 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]