Mativ Holdings, Inc.

Previous wording

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, 2025. 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 I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, 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.

Current wording

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 included in our Annual Report on Form 10-K for the year ended December 31, 2025. 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 I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, 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.

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. This MD&A discusses the financial condition and results of operations of the Company as of and for the three and six months ended June 30, 2026.

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 and nine months ended September 30, 2026.

Previous 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. On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"), and on April 20, 2026, the U.S. Customs and Border Protection ("U.S. CBP") launched a refund platform. The net impact of IEEPA tariff refund claims submitted and accepted by U.S. CBP as of June 30, 2026 was not significant. The Company continues to monitor developments with respect to tariffs and trade policy, including refund initiatives and other opportunities to mitigate the related impacts, costs and other effects of tariffs.

Current wording

Throughout 2025 and 2026, 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. On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"), and on April 20, 2026, the U.S. Customs and Border Protection ("U.S. CBP") launched a refund platform. The net impact of IEEPA tariff refund claims submitted and accepted by U.S. CBP as of September 30, 2026 was not significant. The Company continues to monitor developments with respect to tariffs and trade policy, including refund initiatives and other opportunities to mitigate the related impacts, costs and other effects of tariffs.

Previous wording

The following table presents net sales by segment for the three months ended June 30, 2026 and 2025 (in millions):

Current wording

The following table presents net sales, costs of products sold, and gross profit by segment for the three months ended September 30, 2026 and 2025 (in millions):

Previous wording

FAM segment net sales decreased primarily due to lower volume/mix driven by filtration & netting and the impact from an exited facility. This loss was partially offset by higher selling prices and favorable currency translation.

Current wording

FAM segment net sales increased primarily due to higher volume/mix and higher selling prices. This increase was partially offset by the impact from an exited facility and unfavorable currency translation.

Previous wording

SAS segment net sales increased, reflecting higher selling prices and favorable currency translation, partially offset by lower volume/mix.

Current wording

SAS segment net sales decreased, reflecting lower volume/mix primarily due to the impact of the Menasha Tornado and in our Healthcare business and unfavorable currency translation, partially offset by higher selling prices.

Previous wording

FAM gross profit decreased, reflecting lower volume/mix while higher proactive pricing actions offset increases in manufacturing and distribution costs.

Current wording

FAM gross profit increased, reflecting higher volume/mix and favorable price vs. cost performance, partially offset by increases in manufacturing costs.

Previous wording

SAS gross profit increased, reflecting favorable relative net selling price and input cost performance, offset by lower volume/mix and higher manufacturing and distribution costs.

Current wording

SAS gross profit decreased, reflecting lower volume/mix and higher distribution expenses, partially offset by favorable price vs. cost performance.

Previous wording

Restructuring and other impairment expenses decreased primarily due to an other impairment expense incurred in the prior period related to a facility closure and severance charges incurred in the prior period.

Current wording

Restructuring and other impairment expenses decreased primarily due to higher impairment and severance charges incurred in the prior period, along with an increase in the fair value of an asset held for sale in the current period. This decrease was partially offset by an other impairment expense incurred in the current period related to a product line rationalization.

Previous wording

Interest expense of $36.8 million during the six months ended June 30, 2026 increased $0.4 million, or 1.1%, compared to the prior year period.

Current wording

Interest expense of $18.1 million during the three months ended September 30, 2026 increased $0.4 million, or 2.3%, compared to the prior year period.

Previous wording

Other expense was $0.5 million during the three months ended June 30, 2026, compared to the prior year period income of $1.5 million. The decrease was attributed to gains on asset disposals in the prior period.

Current wording

Other expense was $0.4 million during the three months ended September 30, 2026, compared to the prior year period expense of $3.9 million. The decrease was attributed to pension costs incurred in the prior period and foreign currency losses in the prior period.

Previous wording

A $3.2 million income tax expense in the three months ended June 30, 2026 resulted in an effective tax rate of 47.1% compared with 416.7% in the prior year period. The Company's effective tax rate for the quarter was impacted by mix of earnings and certain jurisdictions with a full valuation allowance. In the prior period, a valuation allowance expense of $8.5 million was recorded against certain deferred tax assets.

Current wording

A $2.6 million income tax expense in the three months ended September 30, 2026 resulted in an effective tax rate of 185.7% compared with 42.9% in the prior year period. The Company's effective tax rate for the quarter was impacted by mix of earnings and certain jurisdictions with a full valuation allowance.

Previous wording

Net income during the three months ended June 30, 2026 was $3.6 million, or $0.06 per diluted share, compared with net loss of $9.5 million, or $0.18 per diluted share, during the prior-year quarter.

Current wording

Net loss during the three months ended September 30, 2026 was $1.2 million, or $0.03 per diluted share, compared with net loss of $3.2 million, or $0.06 per diluted share, during the prior-year quarter.

Previous wording

The following table presents components of change in net sales by segment for the six months ended June 30, 2026 compared to 2025 (as a percentage of net sales):

Current wording

The following table presents components of change in net sales by segment for the nine months ended September 30, 2026 compared to 2025 (as a percentage of net sales):

Previous wording

FAM segment net sales decreased primarily due to lower volume/mix, including the impact from an exited facility, partially offset by favorable currency translation and higher selling prices.

Current wording

FAM segment net sales increased primarily due to higher selling prices, higher volume/mix, and favorable currency translation, partially offset by the impact from an exited facility.

Previous wording

SAS gross profit increased, reflecting favorable price vs. cost performance as proactive pricing actions offset general cost increases including higher manufacturing and distribution costs.

Current wording

SAS gross profit increased, reflecting favorable price vs. cost performance, partially offset by lower volume/mix, higher distribution and manufacturing costs, and unfavorable currency.

Previous wording

Nonmanufacturing expenses decreased primarily due to lower research and development ("R&D") expense, as a result of actions taken under our organizational realignment initiative (the "Plan") that were focused on R&D project prioritization and resource optimization.

Current wording

Nonmanufacturing expenses decreased due to lower selling and general expense and research and development expense, primarily as a result of actions taken under our organizational realignment initiative (the "Plan"). The actions for R&D were focused on project prioritization and resource optimization.

Previous wording

Interest expense of $19.3 million during the three months ended June 30, 2026 increased $0.7 million, or 3.8%, compared to the prior year period driven by higher weighted average interest rates.

Current wording

Interest expense of $54.9 million during the nine months ended September 30, 2026 increased $0.8 million, or 1.5%, compared to the prior year period.

Previous wording

Other income was $1.0 million during the six months ended June 30, 2026, compared to the prior year period expense of $0.3 million. The increase was driven by foreign currency in both periods, offset by gains on asset disposals in the prior period.

Current wording

Other income was $0.6 million during the nine months ended September 30, 2026, compared to the prior year period expense of $4.2 million. The change was driven by foreign currency in both periods and pension costs incurred in the prior period, partially offset by gains on asset disposals in the prior period.

Previous wording

A $6.2 million income tax expense in the six months ended June 30, 2026 resulted in an effective tax rate of (326.3)% compared with 2.7% in the prior year period. The Company’s effective tax rate was impacted by mix of earnings and certain jurisdictions with a full valuation allowance. In the prior period, a one-time valuation allowance benefit of $23.5 million offset by a valuation allowance expense of $8.5 million was recorded against certain deferred tax assets and liabilities; as well as a $411.9 million goodwill impairment not deductible for tax.

Current wording

An $8.8 million income tax expense in the nine months ended September 30, 2026 resulted in an effective tax rate of (1760.0)% compared with 3.2% in the prior year period. The Company’s effective tax rate was impacted by mix of earnings and certain jurisdictions with a full valuation allowance. In the prior period, a one-time valuation allowance benefit of $23.5 million offset by a valuation allowance expense of $8.5 million was recorded against certain deferred tax assets and liabilities, as well as a $411.9 million goodwill impairment not deductible for tax.

Previous wording

Net Income (Loss) and Net Income (Loss) per Share

Current wording

Net Loss and Net Loss per Share

Previous wording

Net loss during the six months ended June 30, 2026 was $8.1 million, or $(0.15) per diluted share, compared to net loss of $435.0 million, or $(7.98) per diluted share, during the prior year period.

Current wording

Net loss during the nine months ended September 30, 2026 was $9.3 million, or $(0.18) per diluted share, compared to net loss of $438.2 million, or $(8.04) per diluted share, during the prior year period.

Previous wording

As of June 30, 2026, $57.3 million of the Company's $66.3 million of Cash and cash equivalents was held by foreign subsidiaries. Restricted cash of $4.5 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 September 30, 2026, $72.7 million of the Company's $97.3 million of Cash and cash equivalents was held by foreign subsidiaries. Restricted cash of $4.2 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 operations increased $27.2 million to $68.9 million for the six months ended June 30, 2026, compared with cash provided by operations of $41.7 million in the prior year. The increase was attributable to higher quarterly net income, adjusted for non-cash items, and favorable year-over-year movements in working capital related cash flows.

Current wording

Net cash provided by operations increased $2.9 million to $117.4 million for the nine months ended September 30, 2026, compared with cash provided by operations of $114.5 million in the prior year. The increase was attributable to a lower net loss, adjusted for non-cash items, partially offset by unfavorable year-over-year movements in working capital related cash flows.

Previous wording

During the six months ended June 30, 2026, net changes in operating working capital resulted in cash outflows of $2.6 million, compared to $6.2 million of outflows during the prior year period. The $3.6 million change was driven by outflows associated with accounts payable and other current liabilities, accounts receivable, and accrued income taxes, partially offset by inventory.

Current wording

During the nine months ended September 30, 2026, net changes in operating working capital resulted in cash inflows of $11.9 million, compared to $35.3 million of inflows during the prior year period. The $23.4 million change was driven by outflows associated with inventory, partially offset by accounts payable and other current liabilities, and accrued income taxes.

Previous wording

Cash used in investing activities decreased $1.8 million during the six months ended June 30, 2026 compared to the prior year and was attributable to lower capital spending.

Current wording

Cash used in investing activities increased $4.0 million during the nine months ended September 30, 2026 compared to the prior year and was attributable to proceeds from sale of assets and cash received from settlement of swap contracts in the prior year, offset by lower capital spending in the current year.

Previous wording

Cash used in financing activities increased $53.3 million during the six months ended June 30, 2026 compared to the prior year. The increase was attributable to payments for debt issuances costs incurred under the Amended Credit Agreement and repayments on the Revolving Facility.

Current wording

Cash used in financing activities decreased $11.0 million during the nine months ended September 30, 2026 compared to the prior year. The decrease was attributable to the refinancing of the Company's Credit Agreement during April of 2026.

Previous wording

As of June 30, 2026, the Company had $974.5 million of total debt, $66.3 million of Cash and cash equivalents, $4.5 million of Restricted cash, and $279.2 million of undrawn capacity on its $305.0 million Revolving Facility. Per the terms of the Company's Amended Credit Agreement, net leverage was 3.8x at the end of the second quarter, versus a current maximum covenant ratio of 5.00x.

Current wording

As of September 30, 2026, the Company had $976.4 million of total debt, $97.3 million of Cash and cash equivalents, $4.2 million of Restricted cash, and $276.2 million of undrawn capacity on its $305.0 million Revolving Facility. Per the terms of the Company's Amended Credit Agreement, net leverage was 3.8x at the end of the third quarter, versus a current maximum covenant ratio of 5.00x.

Previous wording

The following table presents activity related to our debt instruments for the six months ended June 30, 2026 and 2025 (in millions):

Current wording

The following table presents activity related to our debt instruments for the nine months ended September 30, 2026 and 2025 (in millions):

Previous wording

Our total debt to capital ratios, as calculated under the amended Credit Agreement, at June 30, 2026 and December 31, 2025 were 67.4% and 67.1%, respectively.

Current wording

Our total debt to capital ratios, as calculated under the amended Credit Agreement, at September 30, 2026 and December 31, 2025 were 67.6% and 67.1%, respectively.