Magnera Corp

Previous wording

Outlook. The Company is affected by general economic and industrial growth, raw material availability, cost inflation, supply chain disruptions, new and changing tariffs and general industrial production. Our business has both geographic and end market diversity, which reduces the effect of any one of these factors on our overall performance. Our results are affected by our ability to pass through raw material and other cost changes, including tariffs, to our customers, improve manufacturing productivity and adapt to volume changes of our customers. Despite global macro-economic challenges and uncertainties attributed to continued rising inflation, changing tariff policies, currency devaluation and general market softness, we continue to believe our underlying long-term demand fundamental in all divisions will remain strong as we focus on providing advantaged products in targeted markets. For fiscal 2025, we project post-Transaction free cash flow of $75-95 million including $75 million of capital spending. For the calculation of post-Transaction free cash flow and further information related to free cash flow as a non-GAAP financial measure, see “Liquidity and Capital Resources.”

Current wording

Outlook. The Company is affected by general economic and industrial growth, raw material availability, cost inflation, supply chain disruptions, new and changing tariffs and general industrial production. Our business has both geographic and end market diversity, which reduces the effect of any one of these factors on our overall performance. Our results are affected by our ability to pass through raw material and other cost changes, including tariffs, to our customers, improve manufacturing productivity and adapt to volume changes of our customers. During fiscal 2025, the Company announced capacity rationalizations in order to deliver future cost savings and optimize equipment utilization. In total, over the next two years, these actions are projected to cost approximately $20 million with the operations savings intended to counter general economic softness. Despite global macro-economic challenges and uncertainties attributed to continued rising inflation, changing tariff policies and general market softness, we continue to believe our underlying long-term demand fundamental in all divisions will remain strong as we focus on providing advantaged products in targeted markets. For fiscal 2025, we project post-Transaction free cash flow of $75-95 million including $75 million of capital spending. For the calculation of post-Transaction free cash flow and further information related to free cash flow as a non-GAAP financial measure, see “Liquidity and Capital Resources.”

Previous wording

Our acquisition strategy is focused on improving our long-term financial performance, enhancing our market positions, and expanding our existing and complementary product lines. We seek to obtain businesses for attractive post-synergy multiples, creating value for our stockholders from synergy realization, leveraging the acquired products across our customer base, creating new platforms for future growth, and assuming best practices from the businesses we acquire. While the expected benefits on earnings are estimated at the commencement of each transaction, once the execution of the plan and integration occur, we are generally unable to accurately estimate or track what the ultimate effects have been due to system integrations and movements of activities to multiple facilities. As business combinations and restructuring plans have not allowed us to accurately separate realized synergies compared to what was initially identified, we estimate the synergy realization based on various factors.

Current wording

As part of our growth strategy, we intend pursue additional acquisition targets. Our acquisition strategy is focused on identifying attractive assets that will support improving our long-term financial performance, enhancing our market positions, and expanding our existing and complementary product lines. We seek to obtain businesses for attractive post-synergy multiples, creating value for our stockholders from synergy realization, leveraging the acquired products across our customer base, creating new platforms for future growth, and assuming best practices from the businesses we acquire. While the expected benefits on earnings will be estimated at the commencement of each transaction, once the execution of the plan and integration occur, we may be unable to accurately estimate or track what the ultimate effects will be due to system integrations and movements of activities to multiple facilities.

Previous wording

Net sales: The net sales increase included revenue from the Transaction of $311 million which was partially offset by a $26 million unfavorable impact from foreign currency changes, a $14 million decrease in selling prices and a 1% organic volume decline which was attributed to general market softness.

Current wording

Net sales: The net sales increase included revenue from the Transaction of $320 million which was partially offset by a $7 million decrease in selling prices and a 5% organic volume decline which was attributed to general market softness in Europe and competitive pressures from imports in South America.

Previous wording

Operating income: The operating income decline included an $8 million unfavorable impact from increased business integration costs, losses from the acquired GLT business of $3 million, a $2 million unfavorable impact from foreign currency changes and an unfavorable impact from price cost spread of $3 million, partially offset by the elimination of $5 million in corporate expense allocations in Prior Quarter.

Current wording

Operating income (loss): The operating income decline included an $8 million unfavorable impact from increased business integration costs, a $4 million unfavorable impact from the volume decline, a $4 million increase in stock compensation expense and an unfavorable impact from price cost spread of $3 million, partially offset by the elimination of $8 million in corporate expense allocations in Prior Quarter and income from the acquired GLT business of $5 million.

Previous wording

Net sales: The net sales increase in the Americas segment included revenue from the Transaction of $124 million partially offset by decreased selling prices of $12 million and a $15 million unfavorable impact from foreign currency changes.

Current wording

Net sales: The net sales increase included revenue from the Transaction of $124 million partially offset by decreased selling prices of $8 million, a $9 million unfavorable impact from foreign currency changes and a 6% organic volume decline which was primarily attributed to competitive pressures from imports in South America.

Previous wording

Operating income (loss): The operating income decline included a $8 million unfavorable impact from increased business integration costs, a $4 million loss from equipment disposals, losses from the acquired GLT business of $6 million, a $3 million unfavorable impact from foreign currency changes and an unfavorable impact from price cost spread of $3 million, partially offset by the elimination of $5 million in corporate expense allocations in Prior Quarter.

Current wording

Operating income: The operating income decline included a $5 million unfavorable impact from increased business integration costs, a $3 million unfavorable impact from the volume decline, a $3 million increase in stock compensation expense and an unfavorable impact from price cost spread of $5 million, partially offset by the elimination of $6 million in corporate expense allocations in Prior Quarter and income from the acquired GLT business of $5 million.

Previous wording

Net sales: The net sales increase included revenue from the Transaction of $187 million which was partially offset by a $11 million unfavorable impact from foreign currency changes and a 3% organic volume decline.

Current wording

Net sales: The net sales increase included revenue from the Transaction of $196 million and a $7 million favorable impact from foreign currency changes, partially offset by a 3% organic volume decline which was primarily attributed to general market softness in Europe.

Previous wording

The $6 million increase in comprehensive loss from the Prior Quarter is attributed to a $47 million favorable change in currency translation offset by a $53 million increased net loss. Currency translation changes are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. dollar, whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates. The change in currency translation in the Quarter was primarily attributed to locations utilizing the Euro and Brazilian real as their functional currency. As part of its overall risk management, the Company uses derivative instruments to reduce foreign currency exposure to translation of certain foreign operations. The Company records changes to the fair value of these instruments in Accumulated other comprehensive loss. The change in fair value of these instruments in the Quarter is primarily attributed to the change in the forward foreign exchange curves between measurement dates.

Current wording

The $50 million increase in comprehensive income from the Prior Quarter is attributed to a $87 million favorable change in currency translation offset by a $37 million increased net loss. Currency translation changes are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. dollar, whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates. The change in currency translation in the Quarter was primarily attributed to locations utilizing the Euro and Brazilian real as their functional currency. As part of its overall risk management, the Company uses derivative instruments to reduce foreign currency exposure to translation of certain foreign operations. The Company records changes to the fair value of these instruments in Accumulated other comprehensive loss. The change in fair value of these instruments in the Quarter is primarily attributed to the change in the forward foreign exchange curves between measurement dates.

Previous wording

Comparison of the Two Quarterly Periods Ended March 29, 2025 (the “YTD”) and the Two Quarterly Periods Ended March 30, 2024 (the “Prior YTD”)

Current wording

Comparison of the Three Quarterly Periods Ended June 28, 2025 (the “YTD”) and the Three Quarterly Periods Ended June 29, 2024 (the “Prior YTD”)

Previous wording

Net sales: The net sales increase included revenue from the Transaction of $497 million, which were partially offset by a $40 million unfavorable impact from foreign currency changes and a 1% organic volume decline which was attributed to general market softness.

Current wording

Net sales: The net sales increase included revenue from the Transaction of $817 million, which was partially offset by a $42 million unfavorable impact from foreign currency changes and a 2% organic volume decline which was attributed to general market softness in Europe and competitive pressures from imports in South America.

Previous wording

Operating income (loss): The operating loss increase included a $12 million inventory fair value step-up charge, a $17 million unfavorable impact from increased business integration costs, a $4 million loss from equipment disposals, losses from the acquired GLT business of $9 million and a $7 million unfavorable impact from foreign currency changes partially offset by a $15 million favorable change from prior year hyperinflation in our Argentinian subsidiary and the elimination of $6 million in corporate expense allocations in Prior Year.

Current wording

Operating income (loss): The operating loss increase included a $12 million inventory fair value step-up charge, a $25 million unfavorable impact from increased business integration costs, a $7 million unfavorable impact from foreign currency changes and an $11 million increase in stock compensation expense partially offset by a $15 million favorable change from prior year hyperinflation in our Argentinian subsidiary and the elimination of $14 million in corporate expense allocations in Prior Year.

Previous wording

Operating income: The operating income decrease included an $18 million unfavorable impact from increased business integration costs, a $5 million inventory fair value step-up charge, losses from the acquired GLT business of $4 million and a $6 million unfavorable impact from foreign currency changes partially offset by a $15 million favorable change from prior year hyperinflation in our Argentinian subsidiary and the elimination of $6 million in corporate expense allocations in Prior Year.

Current wording

Operating income: The operating income decrease included a $23 million unfavorable impact from increased business integration costs, a $5 million inventory fair value step-up charge, a $6 million unfavorable impact from foreign currency changes, a $6 million increase in stock compensation expense and $6 million unfavorable price cost spread partially offset by a $15 million favorable change from prior year hyperinflation in our Argentinian subsidiary and the elimination of $12 million in corporate expense allocations in Prior Year.

Previous wording

Net sales: The net sales increase in the Rest of World segment included revenue from the Transaction of $303 million which were partially offset by a $12 million unfavorable impact from foreign currency changes and a 3% organic volume decline.

Current wording

Net sales: The net sales increase included revenue from the Transaction of $499 million partially offset by a 3% organic volume decline which was primarily attributed to general market softness in Europe.

Previous wording

Operating loss: The operating loss increase included a $7 million inventory fair value step-up charge, a $4 million loss from equipment disposals and losses from the acquired Glatfelter business of $5 million partially offset by a favorable impact from price cost spread.

Current wording

Operating loss: The operating loss increase included a $7 million inventory fair value step-up charge, losses from the acquired Glatfelter business of $6 million and a $5 million increase in stock compensation expense partially offset by a $6 million favorable impact from price cost spread.

Previous wording

Other expense: The increase in other expense is due to a $15 million prepayment penalty charge for retiring debt concurrently with the Transaction, $7 million of non-cash charges associated with pre-Transaction tax liabilities, and currency losses related to intercompany loans.

Current wording

Other expense: The increase in other expense is due to a $15 million prepayment penalty charge for retiring debt concurrently with the Transaction, $8 million of non-cash charges associated with pre-Transaction tax liabilities, and currency losses related to intercompany loans.

Previous wording

The $168 million decline in comprehensive income from the Prior YTD is attributed to a $63 million unfavorable change in currency translation and a $105 million increased net loss. Currency translation changes are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. dollar whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates. The change in currency translation in the Quarter was primarily attributed to locations utilizing the Euro and Brazilian real as their functional currency. As part of its overall risk management, the Company uses derivative instruments to reduce foreign currency exposure to translation of certain foreign operations. The Company records changes to the fair value of these instruments in Accumulated other comprehensive loss. The change in fair value of these instruments in the quarter is primarily attributed to the change in the forward foreign exchange curves between measurement dates.

Current wording

The $121 million decline in comprehensive income from the Prior YTD is attributed to a $23 million favorable change in currency translation and a $144 million increased net loss. Currency translation changes are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. dollar whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates. The change in currency translation in the Quarter was primarily attributed to locations utilizing the Euro and Brazilian real as their functional currency. As part of its overall risk management, the Company uses derivative instruments to reduce foreign currency exposure to translation of certain foreign operations. The Company records changes to the fair value of these instruments in Accumulated other comprehensive loss. The change in fair value of these instruments in the quarter is primarily attributed to the change in the forward foreign exchange curves between measurement dates.

Previous wording

Net cash from investing activities increased $33 million from the Prior YTD primarily attributed to cash acquired in connection with the Transaction and settlement of net investment hedges in the YTD compared to the settlement of short-term marketable securities in Prior YTD.

Current wording

Net cash from investing activities increased $34 million from the Prior YTD primarily attributed to cash acquired in connection with the Transaction and settlement of net investment hedges in the YTD compared to the settlement of short-term marketable securities in Prior YTD.

Previous wording

Net cash from financing activities increased $25 million from Prior YTD primarily attributed to higher transfers from Berry prior to the Transaction.

Current wording

Net cash from financing activities increased $39 million from Prior YTD primarily attributed to higher transfers from Berry prior to the Transaction.

Previous wording

(1)Pre-merger cash flow includes pre-Transaction cash from operations and other cash payments burdened by the Transaction.

Current wording

(1) Pre-merger cash flow includes pre-Transaction cash from operations and other cash payments burdened by the Transaction.

Previous wording

At March 29, 2025, our cash balance was $283 million, which was primarily located outside the U.S. We believe our existing U.S. based cash and cash flow from U.S. operations, together with available borrowings under our senior secured credit facilities, will be adequate to meet our short-term and long-term liquidity needs with the exception of funds needed to cover all long-term debt obligations, which we intend to refinance prior to maturity. The Company has the ability to repatriate the cash located outside the U.S. to the extent not needed to meet operational and capital needs without significant restrictions.

Current wording

At June 28, 2025, our cash balance was $276 million, which was primarily located outside the U.S. We believe our existing U.S. based cash and cash flow from U.S. operations, together with available borrowings under our senior secured credit facilities, will be adequate to meet our short-term and long-term liquidity needs with the exception of funds needed to cover all long-term debt obligations, which we intend to refinance prior to maturity. The Company has the ability to repatriate the cash located outside the U.S. to the extent not needed to meet operational and capital needs without significant restrictions.