Mativ Holdings, Inc.

Previous wording

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.

Current wording

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 months ended March 31, 2026.

Previous wording

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 Additionally, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions.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.

Current wording

Throughout 2025, the U.S. government proposed the implementation of, or did implement, a number of tariffs on imports to the United States from a large number of countries, including baseline tariffs and additional individualized reciprocal tariffs on certain countries with whom the United States has the largest trade deficits. Increased tariffs by the United States has led and may continue to lead to the imposition of retaliatory tariffs by foreign governments. Additionally, throughout 2025, the U.S. government announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions.

Previous wording

The following table presents net sales by segment (in millions):

Current wording

The following table presents Net sales, Cost of products sold, and Gross profit by segment (in millions):

Previous wording

The following table presents net sales by segment for the three months ended September 30, 2025 and 2024 (in millions):

Current wording

The following table presents components of change in net sales by segment for the three months ended March 31, 2026 compared to 2025 (as a percentage of net sales):

Previous wording

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.

Current wording

Nonmanufacturing expenses decreased primarily due to lower selling and general expense, as a result of actions taken under our organizational realignment initiative (the "Plan").

Previous wording

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.

Current wording

A $3.0 million income tax expense in the three months ended March 31, 2026 resulted in an effective tax rate of (34.5)% compared with 5.5% in the prior year period. The net change was primarily due to mix of earnings and certain jurisdictions with a full valuation allowance in the current period, and goodwill impairment expense not deductible for tax purposes in the prior period.

Previous wording

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.

Current wording

Net loss during the three months ended March 31, 2026 was $11.7 million, or $(0.22) per diluted share, compared to net loss of $425.5 million, or $(7.82) per diluted share, during the prior year period.

Previous wording

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.

Current wording

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 and also by our Receivables Sales Agreement, refer to Note 1. General for additional information.

Previous wording

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.

Current wording

As of March 31, 2026, $62.2 million of the Company's $82.3 million of Cash and cash equivalents was held by foreign subsidiaries. Restricted cash of $5.0 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.

Previous wording

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.

Current wording

Net cash provided by operations increased $16.9 million to $1.0 million for the three months ended March 31, 2026, compared with cash use of $15.9 million in the prior year. The increase was attributable to higher quarterly net income, adjusted for non-cash items, offset by unfavorable year-over-year movements in working capital related cash flows.

Previous wording

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.

Current wording

During the three months ended March 31, 2026, net changes in operating working capital resulted in cash outflows of $28.2 million, compared to $22.1 million of outflows during the prior year period. The $6.1 million change was driven by outflows associated with inventories, partially offset by changes in accounts receivable.

Previous wording

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.

Current wording

On May 6, 2026, we announced a cash dividend of $0.10 per share payable on June 19, 2026 to stockholders of record as of May 29, 2026. The Company is subject to covenants, discussed below, which require that we maintain certain financial ratios 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.

Previous wording

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.

Current wording

As of March 31, 2026, the Company had $1,035.8 million of total debt, $82.3 million of Cash and cash equivalents, $5.0 million of Restricted cash, and $416.2 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 4.1x at the end of the first quarter, versus a current maximum covenant ratio of 5.25x.

Previous wording

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.

Current wording

As of March 31, 2026, the Company’s nearest debt maturity were the Revolving Credit Facility, Term Loan A Facility, and Delayed Draw Term Loan Facility, which were scheduled to mature on May 6, 2027. On April 3, 2026, the Company entered into the Ninth Amendment to the Credit Agreement, which provided for the refinancing and restructuring of the Revolving Credit Facility, Term Loan A Facility, Delayed Draw Term Loan Facility, and Term Loan B Facility. For additional information, refer to Note 14. Subsequent Events of the Notes to the unaudited Condensed Consolidated Financial Statements. After giving effect to the Ninth Amendment to the Credit Facility, the Company's next nearest debt maturity is the 8.000% $400.0 million senior notes due October 1, 2029.

Previous wording

The following table presents activity related to our debt instruments for the nine months ended September 30, 2025 and 2024 (in millions):

Current wording

The following table presents activity related to our debt instruments for the three months ended March 31, 2026 and 2025 (in millions):

Previous wording

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.

Current wording

The Company was in compliance with all of its covenants under the amended Credit Agreement at March 31, 2026. With the current level of borrowing and forecasted results, we expect to remain in compliance with our amended Credit Agreement financial covenants.

Previous wording

Our total debt to capital ratios at September 30, 2025 and December 31, 2024 were 72.1% and 55.9%, respectively.

Current wording

Our total debt to capital ratios, as calculated under the amended Credit Agreement, at March 31, 2026 and December 31, 2025 were 68.7% and 67.1%, respectively.

Previous wording

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.

Current wording

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 2025 fiscal year ended December 31, 2025.

Previous wording

•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;

Current wording

•Risks associated with international conflicts and disputes, such as the ongoing conflict between Russia and Ukraine, and conflicts in the Middle East, and their corresponding impact on global macroeconomic conditions (including volatility in oil prices), as well as adverse impacts on 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;

Previous wording

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.

Current wording

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.