Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion of our financial condition and results of operations. This discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. 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 that we consider reasonable. For information about risks and exposures relating to us and our business, you should read the sections entitled "Factors That May Affect Future Results," in Part I, Item 1A of this Annual Report on Form 10-K and "Forward Looking Statements" at the end of this Item 7. Unless the context indicates otherwise, references to "Mativ," the "Company," "we," "us," "our," or similar terms include Mativ Holdings, Inc. and our consolidated subsidiaries.
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.
As discussed in Note 8. Discontinued Operations of the Notes to Consolidated Financial Statements, the results from continuing operations exclude the results of our EP Business for all periods presented. All information presented within this MD&A is on a continuing operations basis.
Recent Developments
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 tariff 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 Additionally, throughout 2025, the U.S. government announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. 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, and may do so with little to no advanced notice. 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.
CRITICAL ACCOUNTING ESTIMATES
We disclose those accounting estimates that we consider to be significant in determining the amounts to be utilized for communicating our consolidated financial position, results of operations and cash flows in the first note to our consolidated financial statements included elsewhere herein. Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U.S., which require management to make estimates that affect the amounts of revenues, expenses, assets and liabilities reported and disclosure of contingencies. Changes in these estimates could have a material impact on our financial position, results of operations, and cash flows. We discussed with the Audit Committee of the Board of Directors the estimates and judgments made for each of the following items and our accounting for and presentation of these items in the accompanying consolidated financial statements:
Income Taxes
Our income tax expense (benefit), deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best estimate of current and future taxes to be paid. We are subject to income taxes in the U.S. and numerous foreign jurisdictions.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, we begin with historical results adjusted for the results of discontinued operations and incorporate assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income (loss).
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. Accounting Standards Codification Topic No. 740, Income Taxes ("ASC 740"), states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.
Contingencies
We accrue an estimated loss by taking a charge to income when the likelihood that a future event, such as a legal proceeding, will result in a loss or the occurrence of a liability is probable, and the amount of loss can be reasonably estimated. We disclose material contingencies if there is at least a reasonable possibility that a loss has been incurred. In determining whether a loss should be accrued, we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our financial condition, results of operations, and our cash flows.
For further information, refer to "Litigation" in Part I, Item 3, "Legal Proceedings" and Note 18. Commitments and Contingencies of the Notes to Consolidated Financial Statements.
Property, Plant and Equipment Valuation
Certain of our manufacturing processes are capital intensive; as a result, we make substantial investments in property, plant and equipment which are recorded at cost. Net property, plant and equipment comprised 30% of our total assets as of December 31, 2025. Property, plant and equipment is depreciated on the straight-line method over the estimated useful lives of the assets. Production machines and related equipment are not subject to substantial technological changes rendering them obsolete and are generally depreciated over estimated useful lives of 5 to 20 years. When indications of impairment exist, we assess the likelihood of recovering the cost of long-lived assets based on our expectation of future profitability and undiscounted cash flow of the related asset group. These factors, along with management's plans with respect to the operations, are considered in assessing the recoverability of property, plant and equipment. Changes in management's estimates and plans could significantly impact our financial condition, results of operations and cash flows.
Goodwill
Goodwill is not subject to amortization and is tested for impairment at the reporting unit level annually, during the fourth quarter, specifically October 1, or more frequently if events or changes in circumstances indicate impairment may exist. The Company determines the fair value of its reporting units using the income approach based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. The determination of the fair value using the income approach requires management to make significant estimates and assumptions related to forecasts of future cash flows and discount rates. Changes to the forecasted revenue growth, earnings before income taxes, depreciation and amortization (“EBITDA”) and discount rate assumptions may result in a significantly different estimate of the fair value of the reporting units, which could result in a different assessment of the recoverability of goodwill or measurement of an impairment charge. During the years ended December 31, 2025 and 2023, we performed interim quantitative goodwill impairment tests, which resulted in non-cash impairment charges of $411.9 million and $401.0 million, respectively. Refer to Note 9. Goodwill, of the Notes to Consolidated Financial Statements for additional information. The annual impairment tests performed on October 1, 2025, 2024 and 2023 resulted in no charges. We continue to monitor the impact of the sustained impact of macro-economic conditions, an increasingly global competitive environment, along with continued particularly in the construction and automotive sectors. Future in these conditions may require us to perform an interim quantitative test in 2026.
The fair value estimates used in the assessment of impairment for goodwill consider historical trends in addition to significant assumptions including projections of future performance. Changes in these assumptions can have a significant impact on the assessment of fair value.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
For a discussion regarding recently adopted accounting pronouncements, refer to Recently adopted Accounting Pronouncements included in Note 2. Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.
SUMMARY
In 2025, we reported a net loss of $337.4 million on total net sales of $1,987.0 million. Compared to the prior year, net sales increased $5.9 million, or 0.3%. Sales reflected higher volume/mix, favorable currency translation, and higher selling prices, partially offset by sales associated with exited facilities. FAM segment net sales increased $1.0 million, or 0.1%, compared to prior year primarily driven by favorable currency translation, partially offset by lower selling prices. SAS segment net sales increased $4.9 million, or 0.4%, compared to prior year primarily driven by higher volume/mix, higher selling prices, and favorable currency translation, partially offset by sales associated with exited facilities.
The increase in net loss in 2025 compared to 2024 was primarily due to the $411.9 million goodwill impairment expense. For more information on the goodwill impairment, refer to Note 9. Goodwill of the Notes to Consolidated Financial Statements. The Company incurred restructuring and other impairment charges of $19.9 million and $38.1 million, in 2025 and 2024, respectively, primarily related to exiting certain product categories and site closures.
RESULTS OF OPERATIONS
Years Ended December 31,
(in millions, except per share amounts)
Net sales
Cost of products sold
Gross profit
Selling and general expense
Research and development expense
Intangible asset amortization expense
Total nonmanufacturing expenses
Goodwill impairment expense
Restructuring and other impairment expense
Operating profit (loss)
Interest expense
Loss on debt extinguishment
Other expense, net
Loss from continuing operations before income taxes
Income tax expense (benefit)
Net loss from continuing operations
Income from discontinued operations, net of tax
Net loss
Net income (loss) per share from continuing operations
Basic
Diluted
Comparison of the Years Ended December 31, 2025 and 2024
Net Sales
The following table presents net sales by segment (in millions):
Change
Percent Change
FAM
SAS
Total
The following table presents components of change in net sales by segment for the year ended December 31, 2025 compared to 2024 (as a percentage of net sales):
Percent Change in Net Sales
FAM
SAS
Total
Volume/mix
Sales associated with exited facilities
Total volume/mix
Selling price
Currency translation
Total percent change
FAM segment net sales of $767.5 million during the year ended December 31, 2025 increased $1.0 million, or 0.1% compared to prior year-end. Sales reflected favorable currency translation, offset by lower selling prices.
SAS segment net sales of $1,219.5 million during the year ended December 31, 2025 increased $4.9 million, or 0.4% compared to the prior year-end. Sales reflected higher volume/mix, higher selling prices, and favorable currency translation, partially offset by sales associated with exited facilities.
Gross Profit
The following table presents gross profit (in millions):
Percent Change
Percent of Net Sales
Change
Net sales
Cost of products sold
Gross profit
Gross profit of $362.9 million during the year ended December 31, 2025 decreased $1.2 million, or 0.3%, compared to the prior year period which reflected higher distribution and manufacturing costs, and lower volume/mix, partially offset by favorable relative net selling price and input cost performance. FAM gross profit decreased $10.9 million, or 6.3% and SAS gross profit increased $9.7 million, or 5.1%.
Nonmanufacturing Expenses
The following table presents nonmanufacturing expenses (in millions):
Percent Change
Percent of Net Sales
Change
Selling and general expense
Research and development expense
Intangible asset amortization expense
Nonmanufacturing expenses
Nonmanufacturing expenses of $315.5 million during the year ended December 31, 2025 decreased $4.2 million, or 1.3%, compared to the prior year period primarily due to lower selling and general expense as a result of actions taken under an organizational realignment initiative ("the Plan").
Restructuring and Other Impairment Expense
The following table presents restructuring and other impairment expense by segment (in millions):
Percent of Net Sales
Change
FAM
SAS
Unallocated expenses
Total
Restructuring and other impairment expenses in the FAM segment primarily included impairment charges of $11.8 million, along with severance of $3.4 million and costs attributable to facility closures announced in the current and prior years.
Restructuring and other impairment expenses in the SAS segment included severance charges of $1.7 million, primarily attributable to actions taken under the second wave of the Plan.
Unallocated Restructuring and other impairment expenses are comprised of severance charges.
Total severance related expenses during the year ended December 31, 2025 are primarily attributable to actions taken under the second wave of the Plan.
Operating Profit (Loss)
The following table presents operating profit (loss) by segment (in millions):
Percent Change
Return on Net Sales
Change
FAM
SAS
Unallocated expenses
Total
In the FAM segment, operating loss in the year ended December 31, 2025 was $359.8 million compared to operating profit of $70.0 million in the year ended December 31, 2024, a decrease of $429.8 million primarily due to the $411.9 million goodwill impairment in 2025, see Note 9. Goodwill of the Notes to Consolidated Financial Statements. Excluding the goodwill impairment, operating profit was $52.1 million, a $17.9 million decrease from the prior year due to higher manufacturing and distribution costs, and unfavorable relative net selling price and input cost performance, partially offset by higher volume/mix, and lower selling and general expenses.
In the SAS segment, operating profit in the year ended December 31, 2025 was $85.6 million, an increase of $40.2 million, compared to operating profit of $45.4 million in the year ended December 31, 2024. The increase is primarily due to favorable relative net selling price and input cost performance, lower manufacturing costs, and lower selling and general expenses, partially offset by lower volume/mix, and higher distribution costs.
Unallocated expenses in the year ended December 31, 2025 were $110.2 million, an increase of $1.1 million, or 1.0%, compared to the prior year period. The increase is primarily due to one-time separation costs of $7.6 million related to our previously disclosed CEO and CFO transitions, partially offset by a decrease in selling and general expenses as a result of actions taken under the Plan.
Interest Expense
Interest expense was $71.1 million in the year ended December 31, 2025, a decrease of $3.6 million, or 4.8%, compared to the year ended December 31, 2024. Interest expense decreased mainly due to lower average balances on the floating portion of our outstanding debt in 2025.
The weighted average effective interest rate on our debt facilities, including the impact of hedges, was approximately 7.46% and 6.41% for the years-ended December 31, 2025 and 2024, respectively.
Other Expense, Net
Other expense was $7.5 million in the year ended December 31, 2025 compared to expense of $3.2 million for the year ended December 31, 2024, an increase in expense of $4.3 million. The current period includes non-cash settlement charges associated with our U.S. Pension Plan and higher foreign currency losses.
Income Taxes
The $125.6 million benefit and $30.2 million benefit for income taxes in the years-ended December 31, 2025 and 2024, respectively, resulted in an effective tax rate of 27.1% compared with 38.3% in the prior year. The net change was primarily due to the impact from a $49.3 million decrease to our valuation allowance, and goodwill impairment not deductible for tax purposes in the current period.
Net Loss and Loss per Share
Net loss in the year ended December 31, 2025 was $337.4 million, or $6.19 per diluted share, compared to net loss of $48.7 million, or $0.90 per diluted share, during the prior year period.
For a comparison of the Company’s results of operations for the year ended December 31, 2024 to the year ended December 31, 2023, refer to Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on February 27, 2025.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity & Cash Flow
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 5. Accounts Receivable, Net for additional information. Market conditions permitting, we may also seek to access the capital markets as we deem appropriate.
Cash Requirements
As of December 31, 2025, $74.9 million of our $84.2 million of cash and cash equivalents was held by foreign subsidiaries. Restricted cash of $5.6 million primarily represents retained contributions associated with our UK Pension scheme. Cash paid for income taxes (net of refunds) was $11.5 million for the year ended December 31, 2025. 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.
The following table presents summarized activity related to our cash flow (in millions):
Years Ended December 31,
Net cash provided by (used in):
Operations
Investing
Financing
Effect of exchange rate changes on Cash and cash equivalents and Restricted cash
Net change in Cash and cash equivalents and Restricted cash
Cash and cash equivalents and Restricted cash at beginning of period
Cash and cash equivalents and Restricted cash at end of period
Net cash provided by operations increased $39.0 million to $133.8 million during the year ended December 31, 2025, compared with $94.8 million in the prior year. The increase was attributable to lower cash payments related to restructuring activities and favorable year-over-year movements in working capital related cash flows.
In the year ended December 31, 2025, net changes in operating working capital increased cash flow by $8.4 million primarily related to changes in inventories and accounts payable and other current liabilities, partially offset by an increase in accounts receivable. In 2024, net changes in operating working capital increased cash flow by $0.1 million primarily related to changes in accounts payable and other current liabilities and accounts receivable, partially offset by an increase in inventories.
Cash used in investing activities decreased $19.7 million during the year ended December 31, 2025 compared to the prior year and was attributable to lower capital spending.
Cash used in financing activities increased $50.8 million during the year ended December 31, 2025 compared to the prior year. The increase was attributable to higher net repayments of long-term debt outstanding under our Credit Agreement.
Dividend Payments
We have declared and paid cash dividends on our common stock every fiscal quarter since the second quarter of 1996. On February 18, 2026, we announced a cash dividend of $0.10 per share payable on March 27, 2026, to stockholders of record as of the close of business on March 13, 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.
Debt Instruments and Related Covenants
As of December 31, 2025, the Company had $1,018.2 million of total debt, a decrease of $71.1 million year over year, $84.2 million of Cash and cash equivalents, and undrawn capacity of $431.2 million on its Revolving Credit Facility (as defined below). Under the terms of the Company's amended Credit Agreement, net leverage was 4.2 at December 31, 2025, versus a current maximum covenant ratio of 5.50x. The Company’s nearest debt maturities are our Revolving Credit Facility, Term Loan A Facility, and Delayed Draw Term Loan Facility, due on May 6, 2027.
The following table presents activity related to our debt instruments for the years-ended (in millions):
Years Ended December 31,
Proceeds from long-term debt
Payments on long-term debt
Net payments on borrowings
Net payments from borrowings were $79.9 million during the year ended December 31, 2025 compared to net payments from borrowings of $23.7 million during the prior year-end.
Credit Agreement
On September 25, 2018, the Company entered into a $700.0 million credit agreement (the “Credit Agreement”), which replaced the Company’s previous senior secured credit facilities and provided for a five-year $500.0 million revolving line of credit (the “Revolving Credit Facility”) and a seven-year $200.0 million bank term loan facility (the “Term Loan A Facility”). Subject to certain conditions, the Company may request incremental loans to be extended under the Revolving Credit Facility or as additional Term Loan Facilities so long as the Company is in pro forma compliance with the required financial covenants and the aggregate of such increases does not exceed $400.0 million. Refer to Note 12. Debt of the Notes to Consolidated Financial Statements, for more information.
On February 10, 2021, we amended our Credit Agreement to, among other things, add a new seven-year $350.0 million Term Loan B Facility (the “Term Loan B Facility”) and to decrease the incremental loans that may be extended at the Company’s request to $250.0 million. Refer to Note 12. Debt of the Notes to Consolidated Financial Statements for additional information about the Term Loan B Facility. The balance under the Term Loan B Facility was $116.5 million as of December 31, 2025.
On May 6, 2022 the Company amended its Credit Agreement to extend the maturity of the Revolving Credit Facility and the Term Loan A Facility to May 6, 2027, and to increase the availability under the Revolving Credit Facility to $600.0 million. Additionally, we added a $650.0 million delayed draw term loan facility (the "Delayed Draw Term Loan Facility").
In December 2024, the Company amended its Credit Agreement to increase the applicable rate margin to 2.75% with respect to revolving loans and delayed draw term loans borrowed at the adjusted Term SOFR rate, adjusted EURIBOR rate or Daily Simple RFR rate, as applicable. , and letter of credit fees, 1.75% with respect to revolving loans and delayed draw term loans borrowed at the ABR rate, 3.00% with respect to Term A Loans borrowed at the adjusted Term SOFR rate or adjusted EURIBOR rate, as applicable, and 2.00% with respect to Term A Loans borrowed at the ABR rate and the commitment fee rate to 0.45%, in each case, when the net debt to EBITDA ratio is greater than or equal to 5.00 to 1.00. The Amendment also permits borrowings under the revolving commitments in an aggregate amount up to $504.0 million in Sterling.
Under the terms of the amended Credit Agreement, Mativ must maintain certain financial ratios and comply with certain financial covenants , including a requirement (a) to maintain a minimum interest coverage ratio of 2.50 to 1.00 over each consecutive four fiscal quarter period ending December 31, 2024 through December 31, 2025 with a step-up to 2.75 to 1.00 for each such period thereafter and (b) to maintain a maximum net debt to EBITDA ratio of 5.50 to 1.00 over each consecutive four fiscal quarter period ending December 31, 2024 through December 31, 2025 with a step-down to 5.25 to 1.00 for each such period thereafter. borrowings and loans made under the amended Credit Agreement are secured by substantially all of the Company’s and the guarantors’ personal property, excluding certain customary items of collateral, and will be guaranteed by the Company’s existing and future wholly-owned direct material domestic subsidiaries and by Mativ Luxembourg (formerly known as SWM Luxembourg).
Borrowings under the amended Term Loan A Facility ("Term Loan A Credit Facility") will bear interest, at a rate equal to either (1) a forward-looking term rate based on the Secured Overnight Financing Rate (“Term SOFR”), plus the applicable margin or (2) the highest of (a) the federal funds effective rate plus 0.5%, (b) the rate of interest as published by the Wall Street Journal as the “bank prime loan” rate, and (c) Term SOFR plus 1.0%, in each case plus the applicable margin. The applicable margin for borrowings under the Term Loan A Credit Facility is expected to range from 1.25% to 3.00% for SOFR loans and from 0.25% to 2.00% for base rate loans, in each case depending on the Company’s then current net debt to EBITDA ratio.
Borrowings under the amended Revolving Facility or the Delayed Draw Term Loan facility in U.S. dollars will bear interest, at the Company’s option, at a rate equal to either (1) a forward-looking term rate based on Term SOFR, plus the applicable margin or (2) the highest of (a) the federal funds effective rate plus 0.5%, (b) the rate of interest as published by the Wall Street Journal as the “bank prime loan” rate, and (c) one-month Term SOFR plus 1.0%, in each case plus the applicable margin. Borrowings under the Revolving Facility in Euros will bear interest at a rate equal to the reserve-adjusted Euro interbank offered rate, or EURIBOR, plus the applicable margin. The applicable margin for borrowings under the revolving credit agreement is expected to range from 1.00% to 2.75% for SOFR loans and EURIBOR loans, and from 0.00% to 1.75% for base rate loans, in each case, depending on the Company’s then current net debt to EBITDA ratio.
Borrowings under the Term Loan B Facility will bear interest, equal to a forward-looking term rate based on Term SOFR (subject to a minimum floor of 0.75%) plus 2.75%. Borrowings under the Term Loan B Facility in Euros will bear interest equal to EURIBOR (subject to a minimum floor of 0%) plus 3.75%.
The Company was in compliance with all of its covenants under the amended Credit Agreement at December 31, 2025. With the current level of borrowing and forecasted results, we expect to remain in compliance with our amended Credit Agreement financial covenants. The determination of the forecasted financial covenants requires management to make significant estimates and assumptions related to forecasts of future cash flows, future net debt, and future benefits from future synergies. Changes to the forecasted revenue growth, earnings before income taxes, depreciation and amortization (“EBITDA”), net debt, and benefits from future synergies may result in a significantly different estimate of our forecasted financial covenant ratios.
Our total debt to capital ratios, as calculated under the amended Credit Agreement, at December 31, 2025 and December 31, 2024 were 67.1% and 55.9%, respectively.
Indenture for 8.00% Senior Unsecured Notes Due 2029
On October 7, 2024, the Company closed a private offering of $400.0 million of 8.000% senior unsecured notes due 2029 (the “2029 Notes”). The 2029 Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement between the Company, certain subsidiaries of the Company and a third-party financial institution, as representative of the initial purchasers. The 2029 Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly-owned subsidiaries that is a borrower under or that guarantees obligations under the Company’s senior secured credit facilities or that guarantees certain other indebtedness, subject to certain exceptions.
The 2029 Notes were issued pursuant to an Indenture (the “Indenture”), dated as of October 7, 2024, among the Company, the guarantors listed therein and a third-party financial institution, as trustee. Interest on the 2029 Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2025, and the 2029 Notes mature on October 1, 2029, subject to earlier repurchase or redemption.
The Company may redeem some or all of the 2029 Notes at any time on or after October 1, 2026, at the redemption prices set forth in the Indenture, together with accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company sells certain assets or consummates certain change of control transactions, the Company will be required to make an offer to repurchase the Notes, subject to certain conditions.
The Indenture contains certain covenants that, among other things, limit the Company’s ability and the ability of its restricted subsidiaries to incur additional indebtedness, make certain dividends, repurchase Company stock or make other distributions, make certain investments, create liens, transfer or sell assets, merge or consolidate and enter into transactions with the Company’s affiliates. Such covenants are subject to a number of exceptions and qualifications set forth in the Indenture. The Indenture also contains certain customary events of default, including failure to make payments in respect of the principal amount of the 2029 Notes, failure to make payments of interest on the 2029 Notes when due and payable, failure to comply with certain covenants and agreements and certain events of bankruptcy or insolvency. The Company was in compliance with all of its covenants under the Indenture at December 31, 2025.
For a comparison of liquidity and capital resources and the Company’s cash flow activities for the fiscal year ended December 31, 2024 and 2023, refer to Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the U.S. Securities and Exchange Commission on February 27, 2025.
Other Factors affecting Liquidity and Capital Resources
Debt Interest Obligations. Debt interest obligations as of December 31, 2025 amount to $185.0 million over the next five years, Approximately $73.6 million, $52.2 million, and $34.9 million is due annually in 2026, 2027, and 2028, respectively, with the remainder being due in 2029 and 2030.
Other Obligations. We have certain purchase obligations as of December 31, 2025, under which we are required to make minimum payments for goods and services including raw materials, capital projects and energy. These obligations amount to approximately $105.1 million of which $84.3 million is obligated over the next year and the remainder is obligated over the next five years.
OUTLOOK
For both Filtration & Advanced Materials (FAM) and Sustainable & Adhesive Solutions (SAS) segments, we expect our long-term growth outlook to be driven by macro factors affecting our served end-markets, as well as industry demand for many of our key applications.
For our FAM segment, we generally expect to deliver growth exceeding long-term broad economic growth in the U.S and Europe, and, to some extent China (as well as relative outperformance during periods of economic declines).
For the SAS segment, we generally expect to deliver growth relatively in line with long-term broad economic growth in the U.S. and to some extent Europe and China.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") that are subject to the safe harbor created by the Act and other legal protections. Forward-looking statements include, without limitation, those regarding the incurrence of additional debt and expected maturities of the Company’s debt obligations, the adequacy of our sources of liquidity and capital, acquisition integration and growth prospects (including international growth), the cost and timing of our restructuring actions, the impact of ongoing litigation matters and environmental claims, the amount of capital spending and/or common stock repurchases, future cash flows, purchase accounting impacts, impacts and timing of our ongoing operational excellence and other cost-reduction and cost-optimization initiatives, profitability, and cash flow, statement regarding the strategic benefits of divestitures, statements regarding the impact of tariffs and trade actions and other statements generally identified by words such as "believe," "expect," "intend," "guidance," "plan," "forecast," "potential," "anticipate," "," "project," "appear," "future," "should," "likely," "could," "may," "will," "typically" and similar words.
These forward-looking statements are prospective in nature and not based on historical facts, but rather on current expectations and on numerous assumptions regarding the business strategies and the environment in which the Company’s business shall operate in the future and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from our expectations as of the date of this report. These risks include, among other things, those set forth in Part I, Item 1A. Risk Factors of this report, as well as the following factors:
• Risks associated with the implementation of our strategic growth initiatives, including diversification, and the Company's understanding of, and entry into, new industries and technologies;
• Risks associated with acquisitions, dispositions, strategic transactions and global asset realignment initiatives of Mativ;
• Risks related to the impairment of goodwill;
• Adverse changes in our end-market sectors impacting key customers;
• Changes in the source and intensity of competition in our commercial end-markets;
• Adverse changes in sales or production volumes, pricing and/or manufacturing costs;
• Seasonal or cyclical market and industry fluctuations which may result in reduced net sales and operating profits during certain periods;
• Risks associated with our technological advantages in our intellectual property and the likelihood that our current technological advantages are unable to continue indefinitely;
• Supply chain disruptions, including the failure of one or more material suppliers, including energy, resin, fiber, and chemical suppliers, to supply materials as needed to maintain our product plans and cost structure;
• Increases in operating costs due to inflation and continuing increases in the inflation rate or otherwise, such as labor expense, compensation and benefits costs;
• Our ability to attract and retain key personnel, labor shortages, labor strikes, stoppages or other disruptions;
• Changes in general economic, financial and credit conditions in the U.S., Europe, China and elsewhere, including the impact thereof on currency exchange rates (including any weakening of the Euro) and on interest rates;
• A failure in our risk management and/or currency or interest rate swaps and hedging programs, including the failures of any insurance company or counterparty;
• Changes in the manner in which we finance our debt and future capital needs, including potential acquisitions;
• Changes in tax rates, the adoption of new U.S. or international tax legislation or exposure to additional tax liabilities;
• Uncertainty as to the long-term value of the common stock of Mativ;
• Changes in employment, wage and hour laws and regulations in the U.S. and elsewhere, including unionization rules and regulations by the National Labor Relations Board, equal pay initiatives, additional anti-discrimination rules or tests and different interpretations of exemptions from overtime laws;
• The impact of tariffs, and the imposition of any future additional tariffs and other trade barriers, and the effects of retaliatory trade measures;
• Existing and future governmental regulation and the enforcement thereof that may materially restrict or adversely affect how we conduct business and our financial results;
• Weather conditions, including potential impacts, if any, from climate change, known and unknown, and natural disasters or unusual weather events;
• International conflicts and disputes, such as the ongoing conflict between Russia and Ukraine, and 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;
• Compliance with the FCPA and other anti-corruption laws or trade control laws, as well as other laws governing our operations;
• Risks associated with pandemics and other public health emergencies;
• The number, type, outcomes (by judgment or settlement) and costs of legal, tax, regulatory or administrative proceedings, litigation and/or amnesty programs;
• Increased scrutiny from stakeholders related to environmental, social and governance ("ESG") matters, as well as our ability to achieve our broader ESG goals and objectives;
• Costs and timing of implementation of any upgrades or changes to our information technology systems;
• Failure by us to comply with any privacy or data security laws or to protect against theft of customer, employee and corporate sensitive information;
• Risks and uncertainties associated with the introduction of AI, machine learning, and process automation, including rapid technological change, evolving regulatory frameworks, data quality and security, and reliance on third‑party AI tools or vendors;
• Information technology system failures, data security breaches, network disruptions, and cybersecurity events; and
• Other factors described elsewhere in this document and from time to time in documents that we file with the SEC.
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.
