Mativ Holdings reported earnings results for the three months ended March 31, 2024. On November 30, 2023, Mativ completed the sale of its Engineered Papers business. Financial results for continuing operations exclude Engineered Papers in all periods.
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. Along with its earnings report on Form 8-K, the Company 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 First Quarter 2024 Highlights (Continuing Operations)
Management Commentary
Chief Executive Officer Julie Schertell commented, "As expected, we saw meaningful sequential improvement in volume in Q1. And while EBITDA was slightly lower than Q4, the sequential decrease was primarily due to higher cost inventories, which do not repeat. Volume recovery is continuing into Q2, and we continue to believe that we will deliver meaningfully improved EBITDA year-over-year for the remainder of 2024.
"Earlier this year, we initiated an organizational restructuring initiative that will reduce our corporate costs and create a more streamlined business reporting structure. This enables a more agile organization, and we expect will reduce non-operating costs by up to $20 million annually as we exit 2024. These decisions, coupled with actions we took in 2023 to divest Engineered Papers, consolidate our footprint, and invest in new assets in filtration and release liners support future top line growth and increase our operating leverage as volume continues to recover."
Ms. Schertell concluded, "Less than two years after the merger, Mativ is a more agile and effective enterprise that engineers innovative solutions that connect, protect, and purify our world. We are relentless in our pursuit to reduce complexity and prioritize our efforts toward those activities that create the most value for our customers. As we continue to see improving demand, we remain confident that our decisions and actions over the past year will deliver incremental value to our customers and shareholders."
First Quarter 2024 Financial Results (Continuing Operations)
Filtration & Advanced Materials (FAM) segment sales, comprised primarily of filtration media and components, advanced films, coating and converting solutions, and extruded mesh products, were $202.7 million, up 11% sequentially versus Q4 2023, and down 8% versus the prior year period. Lower volume across the segment reflects customer caution in the current uncertain economic environment.
GAAP Operating Profit in 2024 included $3.2 million of restructuring, restructuring related, impairment, and other expenses primarily related to organizational realignment and footprint rationalization. Adjusted EBITDA (see non-GAAP reconciliations) decreased 23% versus prior year as favorable net input costs/selling price and lower SG&A were more than offset by lower volumes, associated fixed cost absorption, and higher production costs.
Sustainable & Adhesive Solutions (SAS) segment sales, comprised primarily of tapes, labels, liners, specialty paper, packaging and healthcare solutions, of $297.5 million were up 10% sequentially versus Q4 2023, and down 9% versus the prior year period. Lower volume across the segment reflects customer caution in the current uncertain economic environment.
GAAP Operating Profit included $7.6 million in restructuring, restructuring related, impairment, and other expenses primarily related to organizational realignment and footprint rationalization. Adjusted EBITDA (see non-GAAP reconciliations) increased 19% compared to the prior year period, driven by favorable net input costs/selling price, as well as reduced distribution and SG&A cost, partially offset by lower volumes, and associated fixed cost absorption. Adjusted EBITDA margin increased 260 basis points versus the prior year.
TAPPI
http://www.tappi.org/