ALPHARETTA, Ga. (News release) -- Mativ Holdings, Inc. reported earnings results for the three months ended March 31, 2025.

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.

Mativ First Quarter 2025 Highlights

• Sales of $484.8 million decreased 3.1% year over year, and 0.2% on an organic basis

• GAAP loss was $425.5 million, GAAP EPS was $(7.82); Results included a non-cash goodwill impairment charge of $411.9 million ($7.57 per share) as well as $14.5 million of organizational realignment and asset impairment expenses

• Adjusted EBITDA was $37.2 million, Adjusted loss was $6.0 million, and Adjusted EPS was $(0.14), (see non-GAAP reconciliations). Adjusted EBITDA was down 19% versus the prior year, as lower SG&A expenses across both segments and higher volume/mix in our SAS segment were more than offset by higher manufacturing and distribution costs, unfavorable net selling price versus input cost performance, and lower volume/mix in our FAM segment.

Management Commentary

President and Chief Executive Officer Shruti Singhal commented, "Since stepping in to lead Mativ eight weeks ago, I have seen firsthand the role we serve as trusted partner to our customers, enabling them to solve their most complex challenges. However, this past year has been incredibly challenging for our shareholders and employees. We are simply not where we need to be operationally to navigate the current demand environment or future challenges. We are pivoting to a much higher sense of urgency across our company to act swiftly, comprehensively and decisively to undertake the necessary changes to grow market share, return to sustainable and profitable growth, and most importantly restore value to our shareholders.

Our top priority is to accelerate our pace of execution with a focus on three key areas: driving enhanced commercial execution, sharpening our efforts to de-lever the balance sheet, and conducting a strategic review of our portfolio. These actions are to ensure Mativ is focused on our highest value initiatives to enable our long-term success. We are executing against a clear strategic roadmap and are taking accelerated actions to position Mativ for profitable growth while de-levering our balance sheet and creating sustainable value for our shareholders.

On a consolidated basis, our Q1 operating results, while mixed, came in as we expected at the start of the year. Our SAS segment delivered its fifth consecutive quarter of strong year-over-year results improvements, with organic revenue growth of approximately 6% and adjusted EBITDA growth of more than 3%, while FAM performance was impacted disproportionately by the higher priced year-end inventory we sold through during Q1, as well as continued slow demand in our transportation and construction-related end markets."

Mativ First Quarter 2025 Financial Results

Filtration & Advanced Materials (FAM) segment sales, comprised primarily of filtration media and components, advanced films, coating and converting solutions, and extruded mesh products, were $187.6 million, down 7.4% versus the prior year period, reflecting lower volume/mix, lower selling prices and unfavorable currency translation.

GAAP Operating Profit in 2025 included $417.9 million of restructuring and impairment expenses primarily related to our goodwill impairment. Adjusted EBITDA (see non-GAAP reconciliations) decreased 30% versus prior year as lower SG&A expenses were more than offset by lower volume/mix, higher manufacturing and distribution costs, and unfavorable net selling price versus input cost performance.

Sustainable & Adhesive Solutions (SAS) segment sales, comprised primarily of tapes, labels, liners, specialty paper, packaging and healthcare solutions, of $297.2 million were up 5.7% on an organic basis, and down 0.1%, on a reported basis, versus the prior year period, as higher volume across all product categories and higher selling prices were offset by sales associated with closed and divested plants and unfavorable currency translation.

GAAP Operating Profit in 2025 included $0.3 million in restructuring expenses primarily related to footprint rationalization. Adjusted EBITDA (see non-GAAP reconciliations) increased $1.0 million (or more than 3%) compared to the prior year period, driven by higher volume across all product categories excluding the impact from closed and divested plants, and lower SG&A expenses partially offset by higher manufacturing and distribution costs, and unfavorable net selling price versus input cost performance.

GAAP operating expenses in 2025 included $9.2 million in organizational realignment costs.

Adjusted unallocated expenses (EBITDA) (see non-GAAP reconciliations) decreased $0.3 million versus prior year primarily driven by lower SG&A expenses.

Interest expense was $17.8 million versus $18.3 million in the prior year period. The decrease was due to lower average balances and lower average interest rates in the current year period.

Other income (expense), net was $(1.8) million and decreased $3.5 million compared with the prior year primarily driven by foreign currency losses.

Tax was a 5.5% benefit for the three months ended March 31, 2025, driven by a change in valuation allowance and primarily attributable to the non-deductible goodwill impairment.

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 adjustment to the first quarter 2025 results were:

• $6.35 per share of goodwill impairment expenses related to our FAM segment

• $0.88 per share due to change of valuation allowance on tax attributes

• $0.22 per share of purchase accounting expenses (purchase accounting expenses reflect primarily ongoing non-cash intangible asset amortizations associated with mergers and acquisitions)

Cash Flow & Debt

Year-to-date 2025 cash used in operating activities was $15.9 million. Capital spending and software costs totaled $13.9 million. Working capital was a $22.1 million use of cash due to the impact of an increase in accounts receivable, partially offset by a decrease in inventories and increase in accounts payable.

Total debt was $1,122.8 million as of March 31, 2025 and Cash and cash equivalents was $84.0 million resulting in net debt of $1,038.8 million. Total liquidity was approximately $407 million, consisting of $84 million of Cash and cash equivalents and $323 million of revolver availability. The Company's debt matures on a staggered basis between 2027 and 2029.

Dividend & Share Repurchases

On May 7, 2025 the Company announced its next quarterly cash dividend of $0.10 per share payable on June 27, 2025 to stockholders of record as of May 23, 2025.

During the first quarter, the Company did not repurchase shares.