On February 21, 2024, Mativ Holdings Inc (MATV, Financial) released its 8-K filing, detailing the financial results for the fourth quarter and full year ended December 31, 2023. The company, a diversified producer of premium specialty papers and resin-based products, operates in two segments: Advanced Materials and Structures (ATM), and Engineered Papers (now discontinued).
For the full year 2023, Mativ reported a 24% increase in sales to $2,026.0 million, largely due to the full-year impact of the merger between legacy SWM and Neenah. However, on a comparable basis, sales decreased by 9%, reflecting lower volume partly offset by higher selling prices and favorable currency translation. The GAAP net loss from continuing operations was significant at $507.7 million, including expenses related to goodwill impairment, integration, and restructuring. Adjusted EBITDA was $213.4 million, down 17% on a comparable basis, as lower volumes more than offset the benefits of price/input costs and synergies.
Mativ's CEO, Julie Schertell, acknowledged the challenging macro-environment, including customer de-stocking trends and persistent inflation. Despite these challenges, the company focused on long-term decisions, such as divesting the Engineered Papers business, reducing debt, and achieving merger synergies ahead of plan. Looking ahead to 2024, Schertell expressed optimism about executing the company's growth strategy.
"2024 is the year of execution, of putting our strategy in play and executing on our plans to achieve our goals for growth in sales and EBITDA, generating strong free cash flow and further reducing our debt and leverage,” said CEO Julie Schertell.
Financial Performance Breakdown
For the fourth quarter, Mativ's sales were $452.3 million, down 13.7% year over year, with a GAAP operating loss of $2.2 million. Adjusted EBITDA for the quarter was $50.0 million, a 20% decrease from the prior year. The ATM segment saw sales of $362.0 million, down 11.5%, while the FBS segment reported sales of $90.3 million, down 21.7%. The company's efforts to streamline operations included a $10.6 million charge related to asset write-downs, integration costs, and divestiture costs.
Mativ's cash flow from continuing operations was $76.6 million for the year, with capital spending and software costs totaling $66.4 million. Free cash flow from continuing operations was $10.2 million. The company's total debt stood at $1,104.6 million as of December 31, 2023, with net debt reduced by $605 million year over year.
The company's strategic moves, including the divestiture of the Engineered Papers business and the reduction of the quarterly dividend, reflect a focus on strengthening the balance sheet and positioning for future growth. The next quarterly cash dividend of $0.10 per share is payable on March 22, 2024.
Mativ's financial tables and detailed segment reporting provide further insights into the company's performance, with a focus on the ATM and FBS segments. The company's balance sheet shows a solid position with $120.2 million in cash and cash equivalents as of December 31, 2023.
Investors and analysts can expect to learn more during Mativ's conference call scheduled for February 22, 2024, at 8:30 a.m. Eastern time. The call will be broadcast over the Internet, with a presentation available on the company's website.
For detailed financial information and reconciliations of non-GAAP measures, please refer to Mativ's earnings release and supplemental tables.
Explore the complete 8-K earnings release (here) from Mativ Holdings Inc for further details.
