ALPHARETTA, Ga. (News release) -- Mativ Holdings, Inc. reported earnings results for the three months and year ended December 31, 2024. On November 30, 2023, Mativ Holdings, Inc. ("Mativ" or the "Company") completed the sale of its Engineered Papers business. 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 versus the prior year period unless stated otherwise. Figures may not sum to total due to rounding. "Comparable" non-GAAP measures used to compare current period Mativ results reflect prior period results revised to align with our new segment reporting structure. The Company previously also filed a separate Form 8-K on May 8, 2024, which includes comparable financial statements for all fiscal quarters of 2023 revised to align with the new segment reporting structure.

Mativ Fourth Quarter 2024 Highlights (Continuing Operations)

• Sales of $458.6 million increased 1.4% year over year, and 4.3% on an organic basis
• GAAP income was $1.5 million in Q4 2024, an improvement of $15.1 million compared to a $13.6 million GAAP loss in the prior year, GAAP EPS was $0.03; the current period included organizational realignment expenses and both periods included purchase accounting expenses
• Adjusted EBITDA was $44.8 million, Adjusted income was $3.0 million, and Adjusted EPS was $0.05, (see non-GAAP reconciliations). Adjusted EBITDA was down 10% versus the prior year, primarily driven by lower volumes in Advanced Films, higher input and manufacturing costs, partially offset by higher volumes in the remainder of our product categories, lower SG&A and distribution expenses

Mativ Full Year 2024 Highlights (Continuing Operations)

• Sales of $1,981.1 million decreased 2.2% year over year, and 1.0% on an organic basis
• GAAP loss was $48.7 million, GAAP EPS was $(0.90); the current period included organizational realignment expenses, and both periods included divestiture and purchase accounting expenses
• Adjusted EBITDA was $218.0 million, Adjusted income was $34.1 million, and Adjusted EPS was $0.62, (see non-GAAP reconciliations). Adjusted EBITDA was up 2% versus the prior year, primarily driven by favorable net price/input costs performance, and lower distribution and SG&A expenses, partially offset by lower volumes and higher manufacturing costs
• GAAP operating profit margin improved materially compared to the prior year (which included a $401.0 million goodwill impairment charge) and adjusted EBITDA margin increased 50 basis points

Management Commentary

Chief Executive Officer Julie Schertell commented, "Our consolidated performance for Q4 was as expected. We delivered strong Q4 results in our SAS segment with organic revenue growth of almost 13% and adjusted EBITDA increasing approximately 8%. The increasing order pace and momentum in SAS is continuing into 2025.

Our FAM segment had mixed results in Q4 with solid demand in Filtration and challenges, as previously announced, in our Advanced Films category, particularly in paint protection films. Our turnaround activities are well underway, and we are realizing improved cost, quality, lead time, and order delivery. Additionally, we are making good progress in our largest adjacent film product categories of optical and medical films, where combined revenues were up almost 30% in Q4. While we have more work to do, we remain confident these actions will deliver improvements in the second half of the year.

As we enter 2025, we are focused on the highest profit and cash accretive activities including announced pricing actions, incremental manufacturing and overhead cost reduction initiatives, and a stronger sales pipeline. With sequential improvement in our order books as well, I am confident in our team and the efforts we have underway to position Mativ for 2025 and beyond."

Mativ Fourth Quarter 2024 Financial Results (Continuing Operations)

Note: The Financial Results below reflect consolidated Mativ results presented in our revised segment reporting structure in the current and prior year period. See the supplemental tables titled Business Segment Reporting From Continuing Operations for additional information regarding the revised segment reporting structure.

Filtration & Advanced Materials (FAM) segment sales, comprised primarily of filtration media and components, advanced films, coating and converting solutions, and extruded mesh products, were $167.8 million, down 7.8% versus the prior year period, as stable volumes in filtration were more than offset by lower volumes in advanced films and netting and lower selling prices across the segment.

GAAP Operating Profit in 2024 included $0.4 million of restructuring expenses primarily related to footprint rationalization. Adjusted EBITDA (see non-GAAP reconciliations) decreased 29% versus prior year as stable volumes in filtration were more than offset by lower volumes in advanced films and netting, and lower selling prices and higher manufacturing costs across the segment.

Sustainable & Adhesive Solutions (SAS) segment sales, comprised primarily of tapes, labels, liners, specialty paper, packaging and healthcare solutions, of $290.8 million were up 7.5%, and 12.8% on an organic basis, versus the prior year period, as higher volumes across all product categories and higher selling prices were partially offset by sales associated with closed and divested plants.

GAAP Operating Profit in 2024 included $0.3 million in restructuring expenses primarily related to footprint rationalization. Adjusted EBITDA (see non-GAAP reconciliations) increased $2.7 million (or almost 8%) compared to the prior year period, driven by higher volumes across all product categories and favorable distribution costs, partially offset by unfavorable net price / input cost performance.

Adjusted unallocated expenses (EBITDA) (see non-GAAP reconciliations) decreased $2.7 million versus prior year primarily driven by lower SG&A expenses. GAAP operating expenses in 2024 included $1.9 million in organizational realignment and integration costs.

Interest expense was $19.7 million versus $13.4 million in the prior year period. The increase was primarily due to the allocation of a portion of our interest expense to Discontinued Operations in 2023.

Other income (expense), net was $8.9 million and increased $10.1 million compared with the prior year primarily driven by gains on asset sales and foreign currency gains.

Tax was a 109.7% benefit for the three months ended December 31, 2024, driven by a change in a valuation allowance and other one-time tax adjustments. Excluding the impact of these one-time tax adjustments, the Company's tax rate was 30.6%.

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 fourth quarter 2024 results were:

• $0.21 per share of purchase accounting expenses (purchase accounting expenses reflect primarily ongoing non-cash intangible asset amortizations associated with mergers and acquisitions)
• $(0.27) per share due to change of valuation allowance on tax attributes

Cash Flow & Debt

Year-to-date 2024 cash provided by operating activities was $94.8 million. Capital spending and software costs totaled $55.6 million. Working capital was a $0.1 million source of cash due to the impact of changes in accounts payable and other current liabilities and accounts receivable, partially offset by an increase in inventories.

Total debt was $1,089.3 million as of December 31, 2024 and total cash was $94.3 million resulting in net debt of $995.0 million. Total liquidity was approximately $451 million, consisting of $94 million of cash and $356 million of revolver availability. The Company's debt matures on a staggered basis between 2027 and 2029. The Company redeemed the 2026 senior unsecured notes on October 7, 2024 and issued $400 million senior unsecured notes due October 1, 2029.

Dividend & Share Repurchases

On February 19, 2025 the Company announced its next quarterly cash dividend of $0.10 per share payable on March 28, 2025 to stockholders of record as of March 14, 2025.

During the fourth quarter, the company did not repurchase shares.