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What changed in Mativ Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Mativ Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+345 added−346 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in Mativ Holdings, Inc.'s 2024 10-K

345 paragraphs added · 346 removed · 218 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeInstructions on how to listen to the webcasts and updated information on times and actual dates are available through our website at www.mativ.com . 3 DESCRIPTION OF BUSINESS Segment Financial Information . Prior to the completion of the Merger and the EP Divestiture, we operated in two reportable segments: Advanced Materials & Structures and Engineered Papers.
Biggest changeInstructions on how to listen to the webcasts and updated information on times and actual dates are available through our website at www.mativ.com . 5 DESCRIPTION OF BUSINESS Segment Financial Information As part of an organizational realignment initiative effective during the first fiscal quarter of 2024, we reorganized into two new reportable segments: (1) Filtration & Advanced Materials ("FAM"), focused primarily on filtration media and components, advanced films, coating and converting solutions, and extruded mesh products, and (2) Sustainable & Adhesive Solutions ("SAS"), focused primarily on tapes, labels, liners, specialty paper, packaging and healthcare solutions.
We continue to optimize our robust safety systems, enhance our operator training programs, and implement proactive risk identification and risk reduction strategies. Each of our facilities maintains safety management systems designed to continuously review and improve employee safety and regulatory compliance. This includes periodic workplace safety audits, employee participation in safety 8 meetings and training, and active safety committees.
We continue to optimize our robust safety systems, enhance our operator training programs, and implement proactive risk identification and risk reduction strategies. Each of our facilities maintains safety management systems designed to continuously review and improve employee safety and regulatory compliance. This includes periodic workplace safety audits, employee participation in safety meetings and training, and active safety committees.
Additionally, as we sell closed or other facilities or materially alter operations at a facility, we may be required to perform additional environmental evaluations that could identify items that might require remediation or other action, the nature, extent and cost of which are not presently known.
Additionally, as we sell closed or other facilities or materially alter operations at a facility, we may be required to perform additional environmental evaluations that could identify items that might require remediation or other 9 action, the nature, extent and cost of which are not presently known.
We are doing this by continually evolving how we attract, engage, grow, and reward our people. Safety The safety and well-being of our employees is very important to us. We strive to reflect this core value in everything we do and are committed to continuous improvement in all aspects of our safety programs.
We are doing this by continually evolving how we attract, engage, grow, and reward our people. 8 Safety The safety and well-being of our employees is very important to us. We strive to reflect this core value in everything we do and are committed to continuous improvement in all aspects of our safety programs.
We may also incur environmental liabilities in connection with assets or businesses we may purchase in the future. The Company is subject to laws concerning our business operations and marketing activities in foreign countries where we conduct business. For example, the Company is subject to the U.S.
We may also incur environmental liabilities in connection with assets or businesses we may purchase in the future. We are subject to laws concerning our business operations and marketing activities in foreign countries where we conduct business. For example, the Company is subject to the U.S.
Weitzel served in prior leadership roles within Finance and Supply Chain for Georgia Pacific over a span of nearly 20 years. 11 Mark Johnson was appointed Chief Legal and Administrative Officer of the Company effective September 1, 2023. Prior to joining the Company, Mr. Johnson served as executive vice president, chief legal officer, and corporate secretary for Kimball International, Inc.
Weitzel served in prior leadership roles within Finance and Supply Chain for Georgia Pacific over a span of nearly 20 years. 13 Mark Johnson was appointed Chief Legal and Administrative Officer of the Company effective September 1, 2023. Prior to joining the Company, Mr. Johnson served as executive vice president, chief legal officer, and corporate secretary for Kimball International, Inc.
Mativ is committed to building and fostering a culture where differences are honored, opportunities are available for all and employees can feel valued, empowered, and respected for who they are. As such, we have developed key areas of focus for our DEI efforts including Employee Lifecycle, Education and Internal Community and Allyship.
We are committed to building and fostering a culture where differences are honored, opportunities are available for all and employees can feel valued, empowered, and respected for who they are. As such, we have developed key areas of focus for our efforts including Employee Lifecycle, Education and Internal Community and Allyship.
Downard's experience includes being a supply chain research director with Gartner, as well as leadership positions with consumer products, food manufacturing, healthcare, medical services, chemical manufacturing, and aerospace manufacturing companies. 12
Downard's experience includes being a supply chain research director with Gartner, as well as leadership positions with consumer products, food manufacturing, healthcare, medical services, chemical manufacturing, and aerospace manufacturing companies. 14
Mativ prohibits discrimination, harassment, and retaliation in employment based on race; color; religion; genetic information; national origin; sex; sexual orientation; gender identity; pregnancy, childbirth, or related medical conditions; age; disability or handicap; citizenship status; service member status; or any other category protected by federal, state or local law.
We prohibit discrimination, harassment, and retaliation in employment based on race; color; religion; genetic information; national origin; sex; sexual orientation; gender identity; pregnancy, childbirth, or related medical conditions; age; disability or handicap; citizenship status; service member status; or any other category protected by federal, state or local law.
Over time, the Company diversified its portfolio through innovation efforts and a number of acquisitions to broaden its exposure to adjacent categories, such as filtration, specialty films, tapes, and healthcare. On July 6, 2022, Schweitzer-Mauduit International, Inc. ("SWM") completed the merger transaction involving Neenah, Inc. ("Neenah").
As a result, the Company became an independent public company. Over time, the Company diversified its portfolio through innovation efforts and a number of acquisitions to broaden its exposure to adjacent categories, such as filtration, specialty films, tapes, and healthcare. On July 6, 2022, Schweitzer-Mauduit International, Inc. ("SWM") completed the merger transaction involving Neenah, Inc. ("Neenah").
We believe our research and product development capabilities have played an important role in establishing our reputation for high quality, superior products in both our ATM and FBS segments. Within ATM, we have a history of finding innovative design solutions, including developing products that improve the performance of customers' products and manufacturing operations.
We believe our research and product development capabilities have played an important role in establishing our reputation for high quality, superior products. We have a history of finding innovative design solutions, including developing products that improve the performance of customers' products and manufacturing operations.
Our goal is to ensure that DEI is weaved in all aspects of the employee lifecycle which includes Attract, Engage, Grow, Reward with on-going partnership with our leaders. Mativ is an Equal Employment Opportunity employer committed to providing equal opportunity in all of our employment practices, including selection, hiring, assignment, reassignment, promotion, transfer, compensation, discipline, and termination.
Our goal is to ensure this emphasis is weaved in all aspects of the employee lifecycle which includes Attract, Engage, Grow, Reward with on-going partnership with our leaders. We are an Equal Employment Opportunity employer committed to providing equal opportunity in all of our employment practices, including selection, hiring, assignment, reassignment, promotion, transfer, compensation, discipline, and termination.
Our quarterly earnings conference calls are typically held the morning after our quarterly earnings releases and are available through our website via a webcast. The tentative dates for our quarterly earnings conference calls related to 2024 financial results are May 9, 2024, August 8, 2024, November 7, 2024, and February 20, 2025. These dates are subject to change.
Our quarterly earnings conference calls are typically held the morning after our quarterly earnings releases and are available through our website via a webcast. The tentative dates for our quarterly earnings conference calls related to 2025 financial results are May 8, 2025, August 7, 2025, November 6, 2025, and February 19, 2026. These dates are subject to change.
Executive Officers of the Registrant The names and ages of our executive officers as of February 29, 2024, together with certain biographical information, are as follows: Name Age Position Julie Schertell 55 President and Chief Executive Officer Greg Weitzel 52 Chief Financial Officer Mark Johnson 47 Chief Legal and Administrative Officer Mike Rickheim 49 Chief Human Resources and Communications Officer Ryan Elwart 50 Group President, Sustainable & Adhesive Solutions Christoph Stenzel 54 Group President, Filtration and Advanced Materials Andrew Downard 49 Chief Supply Chain Officer There are no family relationships between any of the directors or any of our executive officers.
Executive Officers of the Registrant The names and ages of our executive officers as of December 31, 2024, together with certain biographical information, are as follows: Name Age Position Julie Schertell 56 President and Chief Executive Officer Greg Weitzel 53 Chief Financial Officer Mark Johnson 48 Chief Legal and Administrative Officer Mike Rickheim 50 Chief Human Resources and Communications Officer Ryan Elwart 51 Group President, Sustainable & Adhesive Solutions Christoph Stenzel 55 Group President, Filtration and Advanced Materials Andrew Downard 50 Chief Supply Chain Officer There are no family relationships between any of the directors or any of our executive officers.
Additionally, employees are encouraged to identify and report workplace conditions that could lead to an injury. Training and Development Mativ launched MyPath, a platform that supports setting objectives, creating a culture of ongoing feedback, differentiating and rewarding individual performance, and creating global learning and development opportunities for our employees.
Additionally, employees are encouraged to identify and report workplace conditions that could lead to an injury. Training and Development We use MyPath, a platform that supports setting objectives, creating a culture of ongoing feedback, differentiating and rewarding individual performance, and creating global learning and development opportunities for our employees. We aim to be an employer of choice.
Financial information about foreign and domestic operations, contained under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 herein and in Notes 13, 14, 17 and 21 ("Restructuring and Other Impairment Activities," "Debt," "Income Taxes," and "Segment Information," respectively) of the Notes to Consolidated Financial Statements contained in "Financial Statements and Supplementary Data" in Part II, Item 8 herein, is incorporated by reference in this Item 1. 4 Advanced Technical Materials Products.
Financial information about foreign and domestic operations, contained under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 herein and in Notes 12, 13, 16 and 20 ("Restructuring and Other Impairment Activities," "Debt," "Income Taxes," and "Segment Information," respectively) of the Notes to Consolidated Financial Statements contained in "Financial Statements and Supplementary Data" in Part II, Item 8 herein, is incorporated by reference in this Item 1.
On November 30, 1995, Kimberly-Clark transferred its tobacco-related paper and other paper products businesses conducted in the United States, France and Canada to the Company and distributed all of the outstanding shares of common stock of the Company to its stockholders (the "spin-off"). As a result, the Company became an independent public company.
Mativ was incorporated in Delaware in 1995 as a wholly-owned subsidiary of Kimberly-Clark Corporation ("Kimberly-Clark"). On November 30, 1995, Kimberly-Clark transferred its tobacco-related paper and other paper products businesses conducted in the United States, France and Canada to the Company and distributed all of the outstanding shares of common stock of the Company to its stockholders (the "spin-off").
Diversity, Equity and Inclusion: We aim to be an employer of choice. To do that, we are committed to fostering diversity, equity and inclusion (DEI) within our corporate culture and functions. To us, DEI means that all employees have an opportunity to thrive at Mativ. We believe this is more than just a program or policy.
To do that, we are committed to fostering diverse and inclusive environments within our corporate culture and functions. To us, this means that all employees have an opportunity to thrive at Mativ. We believe this is more than just a program or policy.
Additional information regarding "Segment Performance" is included in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations". Selected financial data for our segments is available in Note 21. Segment Information of the Notes to Consolidated Financial Statements and a discussion regarding the risks associated with foreign operations is available in Part I, Item 1A.
Selected financial data for our segments is available in Note 20. Segment Information of the Notes to Consolidated Financial Statements and a discussion regarding the risks associated with foreign operations is available in Part I, Item 1A. "Risk Factors".
Most products are performance-based and require extended qualification by customers; however, certain categories may also be subject to price competition and the substitution of lower cost substrates for some less demanding applications. Sales and Distribution.
Our products are generally used in markets that are directly affected by economic business cycles. Most products are performance-based and require extended qualification by customers; however, certain categories may also be subject to the substitution of lower cost substrates for less demanding applications. Sales and Distribution.
Current and non-current assets and liabilities of the EP business are classified as held for sale, and certain prior period amounts have been retrospectively revised to reflect these changes. The consolidated financial statements and the notes thereto, unless otherwise indicated, are on a continuing operations basis. Refer to Note 9.
Effective with the sale, the EP business is presented as a discontinued operation for all periods presented and certain prior period amounts have been retrospectively recasted to reflect these changes. The consolidated financial statements and the notes thereto, unless otherwise indicated, are on a continuing operations basis. Refer to Note 9.
Mativ targets premium applications across diversified and growing end-markets, from filtration to healthcare to sustainable packaging and more. Our broad portfolio of technologies combines polymers, fibers, and resins to optimize the performance of our customers’ products across multiple stages of the value chain. Mativ was incorporated in Delaware in 1995 as a wholly-owned subsidiary of Kimberly-Clark Corporation ("Kimberly-Clark").
Mativ manufactures globally through our family of business-to-business and consumer product brands. Mativ targets premium applications across diversified and growing end-markets, from filtration to healthcare to sustainable packaging and more. Our broad portfolio of technologies combines polymers, fibers, and resins to optimize the performance of our customers’ products across multiple stages of the value chain.
However, some of our specialty inputs are supplied by fewer manufacturers and our results could be more materially affected by the loss or disruption of supply of certain specialty resins or synthetic fibers from those producers. Wood pulp is the primary fiber used in our FBS segment.
However, some of our specialty inputs are supplied by fewer manufacturers and our results could be more materially affected by the loss or disruption of supply of certain specialty resins, mercerized pulp or synthetic fibers from those producers. Paper production uses significant amounts of energy, primarily electricity and natural gas.
At December 31, 2023, Mativ owned about 755 patents and patent applications globally. Human Capital As of December 31, 2023, we had approximately 5,400 full-time employees, of whom approximately 3,150 employees were located in North America, 1,950 employees were located in Europe, and 300 employees were located in Asia Pacific.
Human Capital As of December 31, 2024, we had approximately 5,100 full-time employees, of whom approximately 3,100 employees were located in North America, 1,700 employees were located in Europe, and 300 employees were located in Asia Pacific.
We enter into agreements to procure a portion of our energy requirements for future periods to reduce the uncertainty of future energy costs. 7 The majority of our energy requirements relate to natural gas and electricity in the U.S., and Europe.
We believe that energy supply is generally reliable throughout our manufacturing footprint, although prices can fluctuate significantly based on demand. We enter into agreements to procure a portion of our energy requirements for future periods to reduce the uncertainty of future energy costs. The majority of our energy requirements relate to natural gas and electricity in the U.S., and Europe.
Generally, sales of our products are subject to seasonal fluctuations due to periodic machine downtime and typically lower order volumes in the fourth quarter. Quarterly sales fluctuations can also be influenced by inventory building and/or destocking by our customers. Raw Materials and Energy We use a variety of resins, polymers, and synthetic fibers in our ATM products.
Generally, sales of our products are subject to seasonal fluctuations and periodic machine downtime typically with lower order volumes in the fourth quarter. Quarterly sales fluctuations can also be influenced by inventory building and/or destocking by our customers as well as general market conditions and geopolitical factors.
Aspects of the Company’s operations and businesses are also subject to privacy, data security, and data protection regulations, which impact the way we use and handle data and operate our products and services. 9 The Company is not aware of any regulatory compliance matters that are expected to have a material adverse effect on the Company’s business, competitive position, financial position, results of operations, capital expenditures or cash flows.
The Company is not aware of any regulatory compliance matters that are expected to have a material adverse effect on the Company’s business, competitive position, financial position, results of operations, capital expenditures or cash flows.
Our manufacturing facilities and corporate office have a longstanding tradition of community engagement and reducing our impact on the environment. We maintain our Supplier Code of Conduct, Human Rights Policy, Transparency in Supply Chains Statements and our Sustainable Forestry Policy to further align with our sustainability goals. Additional information can be found in the Ethics section at www.mativ.com .
We maintain our Code of Conduct, Supplier Code of Conduct, Transparency in Supply Disclosure, Sustainable Forestry Policy, Environmental Policy, and Human Rights Policy to further align with our sustainability goals. Additional information can be found on the Ethics and Compliance section of our website at https://mativ.com/about-us/ethics-and-compliance/.
We source a variety of commodity-grade resins, including polypropylene and polyethylene, as well as more specialized materials such as thermoplastic polyurethane. Resin prices can fluctuate significantly and can impact profitability. Commodity grade resin prices can sometimes correlate with crude oil prices while specialty resin prices often do not.
Raw Materials and Energy We use a variety of resins, polymers, and synthetic fibers in our products. We source a variety of commodity-grade resins, including polypropylene and polyethylene, as well as more specialized materials such as thermoplastic polyurethane. Resin prices can fluctuate significantly and can impact profitability.
Research and Development As of December 31, 2023, we employ approximately 170 research and development employees in research and laboratory facilities in the United States, China, France, Germany, Mexico, the Netherlands, Spain and the United Kingdom. We are dedicated to developing product innovations and improvements to meet the needs of individual customers.
Research and Development As of December 31, 2024, we employ approximately 130 research and development employees in research and laboratory facilities around the world. We are dedicated to developing product innovations and continuous improvements to meet the evolving needs of our customers.
In some cases, we are the sole supplier of certain products to our top customers, though no customer represents more than 10% of our consolidated net sales. Our products are generally used in markets that are directly affected by economic business cycles.
No customer represents more than 10% of our consolidated net sales. Our products are generally used in markets that are directly affected by economic business cycles. Sales and Distribution. SAS products are sold through distribution and direct channels. We typically deliver our products to customers by truck, rail and ocean-going vessels. Competition.
Intellectual Property Patents, trade secrets and trademarks are an important part of Mativ’s intellectual property. Mativ’s products are sold around the world under various trademarks. Many of the processes used to make Mativ's products are kept as trade secrets. Mativ owns, or holds licenses to use, numerous U.S. and foreign patents.
Many of the processes used to make Mativ's products are kept as trade secrets. Mativ owns, or holds licenses to use, numerous U.S. and foreign patents. Mativ’s research and development activities generate a steady stream of inventions that are covered by new patents or trade secrets.
Generally, the applications and customers the ATM segment serves are in growing end-markets, and as a percentage of total ATM segment net sales in 2023 were as follows: industrials – 33%, filtration – 25%, healthcare – 16%, protective solutions – 16%, and release liners – 10%. These products are highly engineered and often customized.
Markets and Customers. The applications and customers the SAS segment serves are in a combination of growing and mature end-markets. A percentage of total SAS segment net sales in 2024 were as follows tape, labels & liners – 50%, paper & packaging – 27%, and healthcare & other – 23%. Many of these products are highly engineered and often customized.
Combined with a relentless pursuit of commercial excellence, deep-rooted bias for continuous improvement, on-going efforts to streamline costs, and an agile approach to execution, we feel we have a comprehensive strategy that will create long-term, sustainable value for our customers, employees, and shareholders. 2 AVAILABLE INFORMATION Our filings with the Securities and Exchange Commission ("SEC"), which filings include this Annual Report on Form 10-K, Proxy Statements, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all related amendments, are available, free of charge, on the SEC's website at www.sec.gov and on the Investor Relations section of our website at www.mativ.com .
We continue to look for ways to enhance the sustainability of our business and make a positive impact on the communities in which we live and serve. 4 AVAILABLE INFORMATION Our filings with the Securities and Exchange Commission ("SEC"), which filings include this Annual Report on Form 10-K, Proxy Statements, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all related amendments, are available, free of charge, on the SEC's website at www.sec.gov and on the Investor Relations section of our website at www.mativ.com .
Unless the context indicates otherwise, references to “Mativ,” the “Company,” “we,” “us,” “our,” or similar terms include Mativ Holdings, Inc. and our consolidated subsidiaries.
Unless the context indicates otherwise, references to “Mativ,” the “Company,” “we,” “us,” “our,” or similar terms include Mativ Holdings, Inc. and our consolidated subsidiaries. GENERAL Background Mativ Holdings, Inc. is a global leader in specialty materials, solving our customers’ most complex challenges by engineering bold, innovative solutions that connect, protect, and purify our world.
Additional information regarding agreements for the supply of certain raw materials and energy is included in Note 20. Commitments and Contingencies, of the Notes to Consolidated Financial Statements.
We consider these to be a relatively stable energy sources historically; however, the recent geopolitical events in various geographies in Europe and Asia have resulted in more volatile energy prices in Europe. Additional information regarding agreements for the supply of certain raw materials and energy is included in Note 19. Commitments and Contingencies, of the Notes to Consolidated Financial Statements.
Mativ’s research and development activities generate a steady stream of inventions that are covered by new patents or trade secrets. In general, no single patent or group of related patents is material to the conduct of Mativ’s business as a whole or to any of Mativ’s business segments.
In general, no single patent or group of related patents is material to the conduct of Mativ’s business as a whole or to any of Mativ’s business segments. At December 31, 2024, Mativ owned about 815 patents and patent applications globally.
Discontinued Operations of the Notes to Consolidated Financial Statements for more information on the discontinued operation and transaction.
Discontinued Operations of the Notes to Consolidated Financial Statements for more information on the discontinued operation and transaction. 1 Mativ and its subsidiaries manufacture on three continents, conduct business in over 90 countries and operate 35 production locations worldwide.
We also source synthetic fibers (distinct from the natural fibers used in our FBS segment), such as polyester, and specialty pulps, such as mercerized pulp. We have multiple sources for most of our raw material needs.
Commodity grade resin prices can sometimes correlate with crude oil prices while specialty resin prices often do not. We also source synthetic fibers such as polyester, and commodity-grade wood pulp and specialty pulps, such as mercerized and flash dried pulp. 7 We have multiple sources for most of our raw material needs.
Our principal executive office is located at 100 Kimball Place, Suite 600, Alpharetta, Georgia 30009 and our telephone number is (770) 569-4229.
Our products are sold globally, though are most prevalent in North America and Europe with, to a lesser extent, Asia-Pacific and the rest of the world making up the remainder. Our principal executive office is located at 100 Kimball Place, Suite 600, Alpharetta, Georgia 30009 and our telephone number is (770) 569-4229.
Our manufacturing process consists of taking basic inputs, such as fibers and chemicals, to create highly engineered media, such as nonwovens, films, specialty paper, and advanced netting.
Our stock is traded on the New York Stock Exchange ("NYSE") under the symbol "MATV." Strategic Overview As a specialty materials manufacturing company, Mativ’s primary processes consist of taking basic inputs, such as fibers, resins and chemicals, to create highly engineered media, such as nonwovens, films, specialty paper and netting.
We then further process our media through coating, saturating, adhesive application, and advanced converting manufacturing processes to impart specific product attributes that are valued by our customers, enhancing Mativ’s value proposition as a solutions provider. With the growth of our ATM segment, our technical expertise around the production, coating, and converting of polymer and resin-based materials is increasing.
We then further process our media through coating, saturating, adhesive application and advanced converting processes to impart specific product attributes that are valued by our customers and customized to meet their unique needs.
On November 30, 2023, the Company completed the sale of its EP business. With the sale of the EP business, Mativ ceased participating in tobacco-based products markets. 1 Effective with the Offer, the EP business is presented as a discontinued operation for all periods presented.
On November 30, 2023, the Company completed the sale of the Engineered Papers business ("EP business") to Evergreen Hill Enterprise Pte. Ltd. ("Evergreen Hill Enterprise"). With the sale of the EP business (the "EP Divestiture"), Mativ ceased participating in tobacco-based product markets.
We believe our commitment to research and development, coupled with our investment in new technology and equipment, has positioned us to take advantage of growth opportunities in many places around the world. Within FBS, our research and development has enabled us to establish and sustain leading shares in premium specialty papers while accelerating growth in the packaging space.
We believe our commitment to research and development, coupled with our investment in new technology and equipment, has positioned us to take advantage of growth opportunities in our target markets. Intellectual Property Patents, trade secrets and trademarks are an important part of Mativ’s intellectual property. Mativ’s products are sold around the world under various trademarks.
Information from our website is not incorporated by reference into this Annual Report on Form 10-K. Additional information about Mativ's governance can also be found in our proxy statement. Working Capital We normally maintain approximately 50 to 90 days of inventories to support our operations.
The Governance section of our website at https://ir.mativ.com/governance/governance-documents/default.aspx includes our Code of Conduct, by-laws, corporate governance guidelines, and Board of Directors committee charters. Additional information about Mativ's governance can also be found in our proxy statement. Working Capital We normally maintain approximately 50 to 70 days of inventories to support our operations.
We typically deliver our products to customers by truck, rail and ocean-going vessels. Competition. Our ATM products are typically leaders in their respective categories and compete against specialty products made by competitors such as Shaoxing Naite Plastics Co.
Our FAM products are typically leaders in their respective categories and compete against specialty products made by competitors such as Shaoxing Naite Plastics Co. Ltd., 3M Company, Covestro AG, ORAFOL 6 Europe GmbH, Hollingsworth and Vose Company, Ahlstrom Holding 3 Oy. We believe our FAM products compete primarily on product features, innovation, quality and customer service. Seasonality.
The following are more detailed descriptions of our key products and applications: Filtration: We produce highly engineered media and components aiding in the separation and purification of air and liquids for a variety of applications.
The segment's key product categories include: • Filtration & netting - includes specialty filtration media and components aiding in the separation and purification of air and liquids for a variety of applications, such as transportation applications, water filtration, industrial processes, life science, HVAC and air pollution control.
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GENERAL Background Mativ Holdings, Inc. is a global leader in manufacturing specialty materials, making impacts on the world every day through a wide range of critical components and engineered solutions that solve our customers’ most complex challenges. Mativ manufactures globally through our family of business-to-business and consumer product brands.
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Mativ’s long-term growth ambition is focused on enhancing its position as a global supplier of choice, driving performance by engineering unique, innovative solutions that connect, protect, and purify our world. Fuel our customers’ successes.
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On August 1, 2023, the Company entered into a final, binding and irrevocable offer letter (the “Offer Letter”) with Evergreen Hill Enterprise Pte.
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We target leading customers in specialized, growing segments of materials markets, and we create value for our customers by combining capabilities, technologies, and service platforms to produce tailored solutions that uniquely solve their most complex challenges.
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Ltd., an affiliate of PT Bukit Muria Jaya (“Evergreen Hill Enterprise”) pursuant to which Evergreen Hill Enterprise made a binding offer (the “Offer”) to acquire the Company’s Engineered Papers business ("EP business") for $620.0 million in cash, subject to customary closing date adjustments (the “EP Divestiture”).
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We have an agile supply chain and manufacturing base that enables us to efficiently produce customized offerings, often in smaller batches, that provide premium quality and unique attributes. We also stretch across layers of the value chain, combining our technologies to provided added value to our products and a more complete solution.
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Pursuant to the terms of the Offer Letter, following the conclusion of the required employee consultation process with its French works councils (the "French Consultation Process"), the Company accepted Evergreen Hill Enterprise's Offer and countersigned the Purchase Agreement, dated as of August 1, 2023 (the "Purchase Agreement"), with respect to the EP Divestiture on October 4, 2023.
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Further, our products are specified and often undergo rigorous qualification cycles, and we are sought out as a partner for innovation opportunities. This creates deep customer relationships, which we believe fuels our ability to grow in our categories.
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Mativ and its subsidiaries manufacture on three continents, conduct business in over 100 countries and operate 40 production locations worldwide, with offices and facilities in the United States, United Kingdom, China, Germany, France, Belgium, Poland, India, Canada, Spain, Italy, Mexico, Netherlands, Malaysia, and Luxembourg.
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Examples of this include our ability to bundle multiple components (media, support, cores and tubes) for water filtration, our ability to extrude and coat our advanced films for specified attributes, our ability to create unique colors, textures and finishes for premium packaging and consumer applications, and our ability to modify release characteristics for various adhesive applications.
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Our stock is traded on the New York Stock Exchange ("NYSE") under the symbol "MATV." Strategic Overview Mativ is focused on becoming the global leader in specialty materials, driving growth by engineering unique, innovative solutions to solve complex customer challenges.
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Capture accelerated growth potential powered by key trends and innovation. Our businesses are aligned with key macro trends and end markets with strong growth outlooks. In addition to our existing product lines, our team uses these long-term trends to guide innovation efforts and bring to life solutions that support our customers’ evolving needs.
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The Company participates in a number of growing end-markets and has a strong reputation in the categories and geographies in which it competes, often occupying a leading position in those spaces.
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Key themes such as the demand for cleaner air and water, modern building practices, increased uses of adhesives, advancements in health and wellness and the desire for sustainable, eco-friendly alternatives, align with our offerings and provide long-term support for demand.
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The common strengths that fuel the Company’s competitive advantage are centered on five key attributes: (1) customer collaboration—enduring track record of serving our industry-leading customers as a trusted partner around the world (2) design and material science know-how—uniquely combining inputs to develop and innovate valued solutions for demanding applications (3) product and technology portfolio—deep expertise to combine unique capabilities to deliver premium functionality and quality (4) global manufacturing and supply chain—highly responsive, agile, and flexible to reliably serve customers everywhere (5) people and values—a distinct and engaging environment with industry-leading experts and experienced leaders focused on driving long-term value.
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In our filtration category, we produce multiple critical components of reverse osmosis filters supporting the increasing demand for clean water, as well as other highly engineered media to support rising needs for air and liquid purification in HVAC, industrial and life science applications.
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Mativ participates in a number of key growing product categories, such as filtration, specialty tapes, release liners, specialty films, and premium packaging, with strong trends supporting the positive outlook of our business, such as the need for clean air and water, personal health and wellness, performance coating solutions, and sustainable alternatives.
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Our advanced films are used in automotive and building applications to safeguard surfaces from sunlight, sound, impact, water, and temperature—increasingly relevant to protect vehicles and buildings.
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The Company’s growth ambition centers on leveraging its competitive advantages to capture growth in these categories while extending participation in attractive product segments, geographies, and value-chain positions to fuel customer success.
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Release liners are essential in the activation process of adhesives in both temporary and permanent connection applications, and are used in growing areas such as hygiene products for adult and feminine care, construction and labeling.
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We focus our resources and deploy our capital in a disciplined manner to enhance our competitive position, adding key technologies, broadening capabilities, and creating innovative products that help support our ability to win in the marketplace.
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Our healthcare lines support advanced healing, wound cleansing, skin-friendly adhesives, as well as device fixation for wearable medical devices—all influenced by an aging population and increased global focus on health and wellness.
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Effective with the Merger, the Company reassessed its reportable segments and concluded that it had two operating segments that are also the reportable segments for financial reporting purposes: Advanced Technical Materials ("ATM") and Fiber-Based Solutions ("FBS"). ATM was comprised of the legacy SWM Advanced Materials & Structures segment and certain legacy Neenah segments allocated to ATM.
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Our tapes and industrial products provide solutions used in growing areas such as cable harnesses and tape for electric vehicles, and protective coverings for cables used in infrastructure and construction. Lastly, our paper and packaging business addresses needs for sustainability and eco-friendly alternatives to plastic while supporting brand aesthetics and the customer experience. 2 Leverage economies of scale.
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FBS was comprised of the legacy SWM Engineered Papers segment and the legacy Neenah Fine Paper and Packaging segment. As such, there were no changes to the historical results of these segments. For both ATM and FBS, the segments were allocated based on performance, market focus, technologies, and reporting structure.
Added
We continue to capitalize on value creation opportunities created by the Merger. We have realized the majority of the previously announced $65.0 million of synergies expected from the transaction, and we are continuing to execute on plans for incremental value.
Removed
Effective July 1, 2023, and as a result of our ongoing integration efforts, we identified a change in our operating segments to align with our end markets due to changes in segment level management and the related internal review of operating results.
Added
These savings included selling, general and administrative reductions (including redundant public company costs), supply chain efficiencies (including procurement, logistics and operating optimization) and other cost reductions, such as purchase services and leased office consolidation. Further, we are executing on significant incremental revenue opportunities.
Removed
Following the change in operating segments, in July 2023, the ATM reportable segment remained an aggregation of the Company's Industrials, Protective solutions, Filtration, Healthcare, and Release liners operating segments.
Added
We continue to identify strategic cross-selling opportunities and innovation in key categories like filtration, healthcare, release liners and tape. We also see geographic expansion as a growth opportunity to complement our expanded footprint in Asia, North America and Europe, demonstrated by recent growth investments in our sites in Italy, Canada, the United Kingdom and Mexico.
Removed
ATM's end markets provided solutions that filter and purify air and liquids, supported adhesive and protective applications, advanced healing and wellness, and solved some of material science’s most demanding performance needs across a number of categories.
Added
Lastly, we are leveraging a more comprehensive value chain position, where we believe we can cross-source and present a more complete offerings to our customers. Transform the portfolio. We focus our investments, resources and efforts towards categories with the highest value-creation potential, focused on growth and margin-accretive opportunities.
Removed
The FBS reportable segment leveraged the Company’s extensive natural fiber capabilities to provide specialty solutions for various end-uses, including sustainable packaging, imaging and communications, home and office, consumer goods, and other applications. As a result of the EP Divestiture, the EP business is presented as a discontinued operation and no longer reported in the FBS reportable segment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

58 edited+14 added−7 removed126 unchanged
Biggest changeThe extent to which COVID-19 or another similar public health crisis impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including a resurgence of COVID-19, new variants, the timing or effectiveness of vaccine roll-outs globally, the timing of easing of preventative or mitigation measures or mandates, the impact of any variants that emerge, or any impact of a global vaccine roll-out on the global economy. 23 Our business depends upon good relations with our employees.
Biggest changeThe extent to which public health crisis impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. Our business depends upon good relations with our employees.
Foreign Corrupt Practices Act ("FCPA") and other anti-corruption laws or trade control laws, as well as other laws governing our operations; • The effect of foreign currency exchange rates; • We could be subject to changes in our tax rates, the adoption of new U.S., or foreign tax legislation or exposure to additional tax liabilities; • Competition from several established competitors and limited market transparency; • The availability of credit and changes in interest rates; • Our failure to comply with the covenants contained in our credit agreements and other debt instruments could result in an event of default that could cause acceleration of our indebtedness; • Future dividends on our common stock may be restricted or eliminated; • Risks related to our internal and external expansion plans and asset dispositions; • The substantial costs related to the integration of Neenah; • Our failure to realize some or all of the anticipated benefits of the Merger; • Our failure to recognize the strategic benefits of the EP Divestiture; • A loss of customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners as a result of the Merger; • Our future results may suffer if we do not effectively manage our expanded operations; • We may not successfully integrate acquisitions into Mativ's operations; • Our restructuring activities are time-consuming and expensive; • The cost and availability of raw materials and energy; • A failure of, or a security breach in, a key information technology system could compromise our information and expose us to liability; • We rely on a limited number of key employees; • We face various risks related to public health emergencies and similar health-related outbreaks such as the COVID-19 pandemic; • Our business is subject to various environmental laws, regulations and related litigation that could impose substantial costs or other liabilities on us; • Environmental, social and governance ("ESG") issues may have an adverse effect on our business, financial condition and results of operations, the desirability of our stock, and may damage our reputation; • Increases in costs of pension benefits may reduce our profitability; • We are subject to various legal actions and other claims; • Any loss or interruption of the operations of our facilities; • Fluctuations in construction and infrastructure spending; and 13 • We have historically experienced significant cost savings and productivity benefits relating to our ongoing operational excellence program which we may not be able to achieve in the future.
Foreign Corrupt Practices Act ("FCPA") and other anti-corruption laws or trade control laws, as well as other laws governing our operations; • The effect of foreign currency exchange rates; • We could be subject to changes in our tax rates, the adoption of new U.S., or foreign tax legislation or exposure to additional tax liabilities; • Competition from several established competitors and limited market transparency; • The availability of credit and changes in interest rates; • Our failure to comply with the covenants contained in our credit agreements and other debt instruments could result in an event of default that could cause acceleration of our indebtedness; • Future dividends on our common stock may be restricted or eliminated; • Risks related to our internal and external expansion plans and asset dispositions; • The substantial costs related to the integration of Neenah; • Our failure to realize some or all of the anticipated benefits of the Merger; • Our failure to recognize the strategic benefits of the EP Divestiture; • A loss of customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners as a result of the Merger; • Our future results may suffer if we do not effectively manage our expanded operations; • We may not successfully integrate acquisitions into Mativ's operations; • Our restructuring activities are time-consuming and expensive; • The cost and availability of raw materials and energy; • A failure of, or a security breach in, a key information technology system could compromise our information and expose us to liability; • We rely on a limited number of key employees; • We face various risks related to public health emergencies and similar health-related outbreaks such as the COVID-19 pandemic; • Our business is subject to various environmental laws, regulations and related litigation that could impose substantial costs or other liabilities on us; • Environmental, social and governance ("ESG") issues may have an adverse effect on our business, financial condition and results of operations, the desirability of our stock, and may damage our reputation; • Increases in costs of pension benefits may reduce our profitability; • We are subject to various legal actions and other claims; • Any loss or interruption of the operations of our facilities; • Fluctuations in construction and infrastructure spending; and 15 • We have historically experienced significant cost savings and productivity benefits relating to our ongoing operational excellence program which we may not be able to achieve in the future.
If we are unable to meet our ESG goals or evolving investor, industry, or stakeholder expectations and standards, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, customers and consumers may choose to 24 stop purchasing our products or purchase products from another company or a competitor, and our reputation, the desirability of our stock to investors, and our business or financial condition may be adversely affected.
If we are unable to meet our ESG goals or evolving investor, industry, or stakeholder expectations and standards, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, customers and consumers may choose to stop purchasing our products or purchase products from another company or a competitor, and our reputation, the desirability of our stock to investors, and our business or financial condition may be adversely affected.
Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws or Trade Control laws by U.S. or foreign authorities could also have an adverse impact on our reputation, business, financial condition and results of operations. Fluctuations in foreign currency exchange rates could adversely impact our financial condition, results of operations and cash flows.
Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws or Trade Control laws by U.S. or foreign authorities could also have an adverse impact on our reputation, business, financial condition and results of operations. 18 Fluctuations in foreign currency exchange rates could adversely impact our financial condition, results of operations and cash flows.
These integration costs may result in Mativ taking significant charges against earnings, and the amount and timing of such charges are uncertain at present. Combining SWM and Neenah may be more difficult, costly or time consuming than expected, and Mativ may fail to realize some or all of the anticipated benefits of the Merger.
These integration costs may result in Mativ taking significant charges against earnings, and the amount and timing of such charges are uncertain at present. 22 Combining SWM and Neenah may be more difficult, costly or time consuming than expected, and Mativ may fail to realize some or all of the anticipated benefits of the Merger.
Any interruption or curtailment of operations at any of our production facilities due to drought or low flow conditions at the principal water source or another cause could materially and adversely affect our operating results and financial condition. Fluctuations in construction and infrastructure spending can impact demand for certain of our products.
Any interruption or curtailment of operations at any of our production facilities due to drought or low flow conditions at the principal water source or another cause could materially and adversely affect our operating results and financial condition. 28 Fluctuations in construction and infrastructure spending can impact demand for certain of our products.
Changes in our portfolio of businesses, assets and products, whether through acquisition, disposition or internal growth, present additional risks, including causing us to incur unknown or new types of liabilities, subjecting us to new regulatory frameworks and new market risks, and acquiring operations in new geographic regions with challenging labor, regulatory and tax regimes.
Changes in our portfolio of businesses, assets and products, whether through acquisition, disposition or 21 internal growth, present additional risks, including causing us to incur unknown or new types of liabilities, subjecting us to new regulatory frameworks and new market risks, and acquiring operations in new geographic regions with challenging labor, regulatory and tax regimes.
In addition, we may experience greater dis-synergies than expected, the impact of the divestiture on our revenue may be larger than projected, and some divestitures may be dilutive to earnings. There can be no assurance whether the strategic benefits and expected financial impact of any divestiture, including the EP Divestiture, will be 19 achieved.
In addition, we may experience greater dis-synergies than expected, the impact of the divestiture on our revenue may be larger than projected, and some divestitures may be dilutive to earnings. There can be no assurance whether the strategic benefits and expected financial impact of any divestiture, including the EP Divestiture, will be achieved.
The volume of oil or gas flowing through pipeline systems that ultimately connect to Western Europe also has been cut off or restricted in the past, and such actions can adversely impact the supply of energy to Western Europe and, consequently, the cost and availability of electricity to our European operations.
The volume of oil or gas flowing through pipeline systems that ultimately connect to Western Europe also has been cut off or restricted in the past, and such actions can adversely impact the 24 supply of energy to Western Europe and, consequently, the cost and availability of electricity to our European operations.
We believe that we are operating in substantial compliance with these laws and regularly incur capital and operating expenditures in order to achieve future compliance. However, these laws may change, which could require changes in our practices, additional capital expenditures or loss of carbon credits, and we may discover aspects of our business that are not in compliance.
We believe that we are operating in substantial compliance with these laws and regularly incur capital and operating expenditures in order to achieve future compliance. However, these laws may change, which could require changes in our practices, additional capital 26 expenditures or loss of carbon credits, and we may discover aspects of our business that are not in compliance.
In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted. 15 We are also subject to other laws and regulations governing our international operations, including regulations administered by the U.S.
In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted. We are also subject to other laws and regulations governing our international operations, including regulations administered by the U.S.
Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments, and we may be unable to refinance or restructure the payments on indebtedness on favorable terms, or at all. 18 Future dividends on our common stock may be restricted or eliminated.
Our assets or cash flows may not be sufficient to fully repay borrowings under our outstanding debt instruments, and we may be unable to refinance or restructure the payments on indebtedness on favorable terms, or at all. Future dividends on our common stock may be restricted or eliminated.
Failure to successfully integrate acquired companies into Mativ's operations may have an adverse effect on our business, financial condition, results of operations, and cash flows. Our restructuring activities are time-consuming and expensive and could significantly disrupt our business.
Failure to successfully integrate acquired companies into Mativ's operations may have an adverse effect on our business, financial condition, results of operations, and cash flows. 23 Our restructuring activities are time-consuming and expensive and could significantly disrupt our business.
Although we do not believe that any of the currently pending actions or claims against us will have a material adverse impact on our financial condition, results of operations and cash flows, we cannot provide any assurances in this regard. Information concerning some of these actions that currently are pending is contained in Note 20.
Although we do not believe that any of the currently pending actions or claims against us will have a material adverse impact on our financial condition, results of operations and cash flows, we cannot provide any assurances in this regard. Information concerning some of these actions that currently are pending is contained in Note 19.
These changes, or other changes in other environmental laws or the interpretation thereof, new enforcement of laws, the identification of new facts or the failure of other parties to perform remediation at our current or former facilities could be costly and lead to new or greater liabilities that could materially adversely affect our business, results of operations, cash flows or financial condition.
These changes, or other changes in other environmental laws, regulations, standards or the interpretation thereof, new enforcement of laws, the identification of new facts or the failure of other parties to perform remediation at our current or former facilities could be costly and lead to new or greater liabilities that could materially adversely affect our business, results of operations, cash flows or financial condition.
Ultimately, our various patents will expire and some may be held invalid in certain jurisdictions before their expiration dates. In addition to protecting certain of our technological advantages through patenting, we also protect a significant amount of our technological advantages as trade secrets, especially with regard to our ATM segment.
Ultimately, our various patents will expire and some may be held invalid in certain jurisdictions before their expiration dates. In addition to protecting certain of our technological advantages through patenting, we also protect a significant amount of our technological advantages as trade secrets, especially with regard to our FAM segment.
The challenges involved in executing the actions that are part of our ongoing and, potentially future, restructuring plans include: • demonstrating to customers that the restructuring activities will not result in adverse changes in service standards or business focus; • consolidating administrative infrastructure and manufacturing operations while maintaining adequate controls throughout the execution of the restructuring; • preserving distribution, sales and other important relationships and resolving potential conflicts that may arise; • estimating, managing and minimizing the cost of the restructuring activities; • minimizing the diversion of management attention from ongoing business activities; • maintaining employee morale, retaining key employees, maintaining reasonable collective bargaining agreements and avoiding strikes, work stoppages or other forms of labor unrest while implementing restructuring programs that often include reductions in the workforce; • securing government approval of such plans, where necessary, and managing the litigation and associated liabilities that often are associated with restructuring actions; • incurring costs associated with delays in restructuring activities caused by labor negotiations and/or governmental approvals; • coordinating and combining operations, which may be subject to additional constraints imposed by collective bargaining agreements and local laws and regulations; and • achieving the anticipated levels of net cost savings and efficiency as a result of the restructuring activities.
The challenges involved in executing the actions that are part of our ongoing and, potentially future, restructuring plans include: • demonstrating to customers that the restructuring activities will not result in adverse changes in service standards or business focus; • consolidating administrative infrastructure and manufacturing operations while maintaining adequate controls throughout the execution of the restructuring; • preserving distribution, sales and other important relationships and resolving potential conflicts that may arise; • estimating, managing and minimizing the cost of the restructuring activities; • minimizing the diversion of management attention from ongoing business activities; • maintaining employee morale, retaining key employees, maintaining reasonable collective bargaining agreements and avoiding strikes, work stoppages or other forms of labor unrest while implementing restructuring programs that often include reductions in the workforce; • securing government approval of such plans, where necessary, and managing the litigation and associated liabilities that often are associated with restructuring actions; • incurring costs associated with delays in restructuring activities caused by labor negotiations and/or governmental approvals; • coordinating and combining operations, which may be subject to additional constraints imposed by collective bargaining agreements and local laws and regulations; and • achieving the anticipated levels of net cost savings and efficiency, or doing so on the timelines originally projected, as a result of the restructuring activities.
While not an exhaustive list, the following important risk factors could affect our future results, including our actual results for 2023 and thereafter and could also cause our actual results to differ materially from those expressed in any forward-looking statements we have made or may make.
While not an exhaustive list, the following important risk factors could affect our future results, including our actual results for 2024 and thereafter and could also cause our actual results to differ materially from those expressed in any forward-looking statements we have made or may make.
The Company has both funded and unfunded pension plans and we make contributions to our pension trusts (where applicable) based on many factors, including regulatory guidelines, investment returns of the trusts, and availability of cash for pension contributions versus other priorities. For a discussion regarding our pension obligations, refer to Note 18.
The Company has both funded and unfunded pension plans and we make contributions to our pension trusts (where applicable) based on many factors, including regulatory guidelines, investment returns of the trusts, and availability of cash for pension contributions versus other priorities. For a discussion regarding our pension obligations, refer to Note 17.
In that event, we may be subject to significant claims for damages or disruptions to our operations. 14 Because of the geographic diversity of our business, we are subject to a range of international risks. Our operations are located in many countries around the world and operate, to a degree, in a decentralized manner.
In that event, we may be subject to significant claims for damages or disruptions to our operations. 16 Because of the geographic diversity of our business, we are subject to a range of international risks. Our operations are located in many countries around the world and operate, to a degree, in a decentralized manner.
Restructuring of our existing operations, or as a result of acquisitions, involves issues that are complex, time-consuming and expensive and could significantly disrupt our business as well as garner review from regulatory authorities which could result in financial impacts to the Company.
Restructuring of our existing operations, or as a result of acquisitions, dispositions or mergers, involves issues that are complex, time-consuming and expensive and could significantly disrupt our business as well as garner review from regulatory authorities which could result in financial impacts to the Company.
Work stoppages, slowdowns or legal action by our unionized employees may have a material adverse effect on our business, financial condition, results of operations and cash flows. We employ approximately 5,400 employees, including certain manufacturing employees represented by unions.
Work stoppages, slowdowns or legal action by our unionized employees may have a material adverse effect on our business, financial condition, results of operations and cash flows. We employ approximately 5,100 employees, including certain manufacturing employees represented by unions.
We are starting to see increased competition for some of our ATM products from companies in China, which, we believe, may have lower operating costs than us, resulting in a potential price advantage for such companies.
We are starting to see increased competition for some of our FAM products from companies in China, which, we believe, may have lower operating costs than us, resulting in a potential price advantage for such companies.
The OECD has recommended that certain aspects of this approach, referred to as “Pillar Two”, be made effective beginning in 2024, and many jurisdictions, including most European Member States, have already legislated Pillar Two into their statutory law and others are in the process of doing so.
The OECD has recommended that certain aspects of this approach, referred to as “Pillar Two”, be made effective beginning in 2024, and many jurisdictions relevant to the Company, including most European Member States, have already legislated Pillar Two into their statutory law in varying degrees and others are in the process of doing so.
If we are unable to offer attractive compensation packages in the future, it could limit our ability to attract and retain key employees. Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases such as the COVID-19 pandemic have adversely affected, and could in the future, adversely affect our business and the business of our customers and suppliers.
If we are unable to offer attractive compensation packages in the future, it could limit our ability to attract and retain key employees. Public health emergencies or outbreaks of epidemics, pandemics, or contagious diseases have adversely affected, and could in the future, adversely affect our business and the business of our customers and suppliers.
The cost of wood pulp, which is the largest component of the raw materials that we use in our FBS segment, and some resins used by our 21 ATM segment are highly cyclical and can be more volatile than general consumer or producer inflationary changes in the general economy.
The cost of wood pulp, which is the largest component of the raw materials that we use in our SAS segment, and some resins used by our FAM segment are highly cyclical and can be more volatile than general consumer or producer inflationary changes in the general economy.
There are inherent control and fraud risks in such a structure. Moreover, we have manufacturing facilities in twelve countries and sell products in over 100 countries, many of which are emerging and undeveloped markets.
There are inherent control and fraud risks in such a structure. Moreover, we have manufacturing facilities in 11 countries and sell products in over 90 countries, many of which are emerging and undeveloped markets.
National and international disputes such as war, border closures, civil disturbances and terrorist acts, including Russia's invasion of Ukraine, the conflict between Israel and Hamas and related disturbances in the Middle East may increase the likelihood of already strained supply interruptions and further hinder our ability to access the materials and energy we need to manufacture our products.
National and international disputes such as war, border closures, civil disturbances and terrorist acts, including Russia's invasion of Ukraine and geopolitical conflicts in the Middle East may increase the likelihood of already strained supply interruptions and further hinder our ability to access the materials and energy we need to manufacture our products.
Further, some of the resins we use in our ATM segment are only available from a single supplier, or a limited number of suppliers. Consequently, such supplier(s) can control the availability and thus the cost of the resins we use, notwithstanding any changes in the cost of oil.
Further, some of the resins we use in our FAM segment are only available from a single supplier, or a limited number of suppliers. Consequently, such supplier(s) can control the availability and thus the cost of the resins we use, notwithstanding any changes in the cost of oil or the impact of broader economic conditions.
As of December 31, 2023, the percentage of the Company’s fixed and floating interest rate debt was 31.0% and 69.0%, respectively. The Company has entered into a number of interest rate hedge transactions to convert floating rate debt to fixed.
As of December 31, 2024, the percentage of the Company’s fixed and floating interest rate debt was 36.0% and 64.0%, respectively. The Company has entered into a number of interest rate hedge transactions to convert floating rate debt to fixed.
Any failure to achieve our ESG goals or a perception (whether or not valid) of our failure to act responsibly with respect to the environmental, human capital, or social issues, or to effectively respond to new, or changes in, legal or regulatory requirements concerning environmental or other ESG matters, or increased operating or manufacturing costs due to increased regulation or environmental causes could adversely affect our business and reputation and increase risk of litigation.
Any failure to achieve our ESG goals or a perception (whether or not valid) of our failure to act responsibly with respect to the environmental, human capital, or social issues, or to effectively respond to new, or changes in, legal or regulatory requirements concerning environmental or other ESG matters, or increased operating or manufacturing costs due to increased regulation or environmental causes could adversely affect our business and reputation and increase risk of litigation. 27 Increases in costs of pension benefits may reduce our profitability and could impact our cash reserves.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional information. 22 The Company is subject to laws of various countries where it operates or does business related to solicitation, collection, processing, transferring, storing or use of consumer, customer, vendor or employee information or related data, including the GDPR which went into effect in May 2018, the CCPA, which went into effect on January 1, 2020, and various U.S. state level privacy regulations.
The Company is subject to laws of various countries where it operates or does business related to solicitation, collection, processing, transferring, storing or use of consumer, customer, vendor or employee information or related data, including the GDPR which went into effect in May 2018, the CCPA, which went into effect on January 1, 2020, and various U.S. state level privacy regulations.
Mativ’s future success will depend, in part, upon its ability to manage this expanded business, which will pose substantial challenges for 20 management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
Following the completion of the Merger, the size of our business increased significantly. Mativ’s future success will depend, in part, upon its ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
Risk Factors Summary Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, those relating to: • Our technological advantages are unlikely to continue indefinitely; • Policing our intellectual property and patent rights is costly and may be unsuccessful; • International geopolitical and other risks associated with our sales and operations outside of the United States, due to political unrest, terrorist acts, and national and international disputes, including Russia's invasion of Ukraine and the conflict between Israel and Hamas; • Failure to comply with the U.S.
Risk Factors Summary Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, those relating to: • Our technological advantages are unlikely to continue indefinitely; • Policing our intellectual property and patent rights is costly and may be unsuccessful; • International geopolitical and other risks associated with our sales and operations outside of the United States, due to political unrest, terrorist acts, and national and international disputes; • Risks related to our dependence on foreign imports and exports; • Failure to comply with the U.S.
Our foreign sales and operations may be adversely affected by supply chain disruptions due to political unrest, terrorist acts, and national and international dispute, including Russia's invasion of Ukraine and the conflict between Israel and Hamas. We conduct a portion of our sales and manufacturing outside the United States.
Our foreign sales and operations may be adversely affected by supply chain disruptions due to political unrest, terrorist acts, and national and international dispute. We conduct a portion of our sales and manufacturing outside the United States.
Changes in the laws and regulations described above, adverse interpretations or applications of such laws and regulations, and the outcome of various court and regulatory proceedings, including in Europe and Brazil, could adversely impact the Company's business in a variety of ways, including increasing expenses, increasing liabilities, decreasing sales, limiting its ability to repatriate funds and generally conduct business, all of which could adversely affect our financial condition, results of operations and cash flows.
Changes in the laws and regulations described above, adverse interpretations or applications of such laws and regulations, and the outcome of various court and regulatory proceedings, could adversely impact the Company's business in a variety of ways, including increasing expenses, increasing liabilities, decreasing sales, limiting its ability to repatriate funds and generally conduct business, all of which could adversely affect our financial condition, results of operations and cash flows. 17 We are subject to risks related to our dependence on foreign imports and exports.
Including the impact of these transactions, as of December 31, 2023, the percentage of the Company’s debt subject to fixed and floating rates of interest was 77.0% and 23.0%, respectively.
Including the impact of these transactions, as of December 31, 2024, the percentage of the Company’s debt subject to fixed and floating rates of interest was 89.0% and 11.0%, respectively.
As a result of these competitive advantages, our competitors and potential competitors may be able to respond more quickly to market forces, take advantage of acquisitions or other opportunities more readily, undertake more extensive marketing campaigns for their brands, products and services, more successfully utilize developing technology, including data analytics, artificial intelligence, and machine learning, and make more attractive offers to our existing and potential customers. 17 We are dependent upon the availability of credit, and changes in interest rates can impact our business.
As a result of these competitive advantages, our competitors and potential competitors may be able to respond more quickly to market forces, take advantage of acquisitions or other opportunities more readily, undertake more extensive marketing campaigns for their brands, products and services, more successfully utilize developing technology, including data analytics, artificial intelligence, and machine learning, and make more attractive offers to our existing and potential customers.
Increases in costs of pension benefits may reduce our profitability and could impact our cash reserves. Our results of operations may be negatively affected by expenses we record for our defined benefit pension plans. Generally accepted accounting principles in the U.S., require that we calculate income or expense for the plans using actuarial valuations.
Our results of operations may be negatively affected by expenses we record for our defined benefit pension plans. Generally accepted accounting principles in the U.S., require that we calculate income or expense for the plans using actuarial valuations.
At the end of 2023, the combined projected benefit obligation of our pension plans had a net underfunding of $11.8 million.
At the end of 2024, the combined projected benefit obligation of our pension plans had a net underfunding of $5.5 million.
In the event of material unforeseen events that impact our financial performance, particularly during a time when we have material amounts of debt, a situation could arise where we are unable to fully draw from our existing credit facility notwithstanding that there is otherwise available capacity.
In the event of material unforeseen events that impact our financial performance, particularly during a time when we have material amounts of debt, a situation could arise where we are unable to fully draw from our existing credit facility notwithstanding that there is otherwise available capacity. 20 Our credit facilities are secured by substantially all of the personal property of the Company and its domestic subsidiaries.
Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on Mativ during this transition period and for an undetermined period after completion of the Merger on the combined Company.
Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on Mativ during this transition period and for an undetermined period after completion of the Merger on the combined Company. Mativ’s future results may suffer if it does not effectively manage its expanded operations following the Merger.
Any such access, disclosure or other loss of information could result in legal claims, proceedings, or regulatory penalties, including penalties under EU privacy laws, and could disrupt our operations.
Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims, proceedings, or regulatory penalties, including penalties under EU privacy laws, and could disrupt our operations.
We believe our ATM products compete primarily on product features, innovations and customer service. Some of these competitors are larger than we are and have more resources, thus the actions of these competitors could have an impact on the results of our ATM segment operations.
Some of these competitors are larger than we are and have more resources, thus the actions of these competitors could have an impact on the results of our FAM segment operations.
Not only could these cost overruns and delays impact our financial statements but a delay in the completion of a needed IT project could adversely impact our ability to run our business and make fully informed decisions.
Not only could these cost overruns and delays impact our financial statements but a delay in the completion of a needed IT project could adversely impact our ability to run our business and make fully informed decisions. 25 We rely on a limited number of key employees and our failure to recruit and/or retain senior management and key employees globally could harm our business.
Our ATM segment products compete to some degree against specialty products made by competitors such as Shaoxing Naite Plastics Co. Ltd., 3M Company, Covestro AG, ORAFOL Europe GmbH, Hollingsworth and Vose Company, Advanced Medical Solutions Group plc, Avery Dennison, Ahlstrom Holding 3 Oy, Mondi plc, Loparex LLC, Monadnock Paper Mills, Inc., and Potsdam Specialty Paper, Inc.
Our FAM segment products compete to some degree against specialty products made by competitors such as Shaoxing Naite Plastics Co. Ltd., 3M Company, Covestro AG, ORAFOL Europe GmbH, Hollingsworth and Vose Company, Advanced Medical Solutions Group plc, and Ahlstrom Holding 3 Oy. We believe our FAM products compete primarily on product features, innovations and customer service.
If our future revenues, costs and results of operations are significantly affected by economic conditions abroad and/or we are unable to effectively hedge these risks, they could materially adversely affect our financial condition, results of operations and cash flows. 16 The Company could be subject to changes in its tax rates, the adoption of new U.S., or foreign tax legislation or exposure to additional tax liabilities.
If our future revenues, costs and results of operations are significantly affected by economic conditions abroad and/or we are unable to effectively hedge these risks, they could materially adversely affect our financial condition, results of operations and cash flows.
We rely on a limited number of key employees and our failure to recruit and/or retain senior management and key employees globally could harm our business. The loss of any of our key employees, including our CEO and her direct reports, could adversely affect our business and thus our financial condition, results of operations and cash flows.
The loss of any of our key employees, including our CEO and her direct reports, could adversely affect our business and thus our financial condition, results of operations and cash flows.
The Company is subject to taxes in the U.S. and in foreign jurisdictions where a number of the Company’s subsidiaries are organized. The Company’s future effective tax rate could be affected by changes in the mix of earnings in countries with differing statutory tax rates or future changes in tax laws or new interpretations of existing tax laws.
The Company’s future effective tax rate could be affected by changes in the mix of earnings in countries with differing statutory tax rates or future changes in tax laws or new interpretations of existing tax laws.
If the Company’s effective tax rates were to increase, or if any ultimate determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s operating results, cash flows, and financial condition could be adversely affected.
If the Company’s effective tax rates were to increase, or if any ultimate determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s operating results, cash flows, and financial condition could be adversely affected. 19 In particular, the Organization for Economic Cooperation and Development (“OECD”) has reached agreement on an approach to establish a minimum global tax, set at 15%, for large multi-national enterprises, such as the Company.
We may utilize a combination of variable and fixed-rate debt consisting of short-term and long-term instruments. We selectively hedge our exposure to interest rate increases on our variable rate long-term debt when we believe that it is practical to do so.
We selectively hedge our exposure to interest rate increases on our variable rate long-term debt when we believe that it is practical to do so. We have utilized various forms of interest rate hedge agreements, including interest rate swap agreements, forward rate agreements and cross currency swaps.
We are subject to public health emergencies, such as the COVID-19 pandemic, which has had and may continue to have an impact on our business and the business of our customers and suppliers. The response to the COVID-19 pandemic negatively affected the global economy, disrupted global supply chains, and created significant disruption in the markets in which we operate.
We are subject to public health emergencies, which has had and may continue to have an impact on our business and the business of our customers and suppliers.
Moreover, natural disasters, political crises, public health crises (such as the ongoing COVID-19 pandemic and the measures put in place to reduce its spread) or other unforeseen catastrophic events in any of the countries in which we operate may negatively impact our facilities, our supply 25 chain or customers.
Moreover, natural disasters, political crises, public health crises or other unforeseen catastrophic events in any of the countries in which we operate may negatively impact our facilities, our supply chain or customers. If we experience supply disruptions, we may not be able to develop alternate sourcing quickly.
Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or be breached due to employee or third-party error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.
Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or be breached due to employee or third-party error, malfeasance or other disruptions. We have in the past, and may again in the future be subject to similar cyber-attacks or other disruptions.
Our credit facilities are secured by substantially all of the personal property of the Company and its domestic subsidiaries. In the event of a default on these agreements, substantially all of the assets of the Company could be subject to foreclosure or liquidation by the secured creditors.
In the event of a default on these agreements, substantially all of the assets of the Company could be subject to foreclosure or liquidation by the secured creditors. We may utilize a combination of variable and fixed-rate debt consisting of short-term and long-term instruments.
Also, in that same time period, the cost of polypropylene has fluctuated significantly based on a number of factors, including changes in global oil markets.
Likewise, the cost of polypropylene can fluctuate significantly based on a number of factors, including as a result of changes in global oil markets and broader economic conditions.
We supplement operating cash flow with bank borrowings under a secured credit agreement with a syndicate of banks. Borrowings under this agreement will mature in 2027 and 2028. To date, we have been able to access credit when needed and on commercially reasonable terms.
We are dependent upon the availability of credit, and changes in interest rates can impact our business. We supplement operating cash flow with bank borrowings under a secured credit agreement with a syndicate of banks. Borrowings under this agreement will mature in 2027 and 2028.
The Company expects that Pillar Two will introduce new challenges with respect to compliance with Pillar Two reporting requirements. Therefore, the Company continues to monitor for updates as countries within its global footprint announce Pillar Two legislation and related guidance.
Further, uncertainty exists as to whether the adoption of Pillar Two in certain jurisdictions may result in reactions in other countries that are meaningful to the Company’s overall tax profile, notably, the United States. Therefore, the Company continues to monitor for updates as countries within its global footprint announce Pillar Two legislation and related announcements, policies, and/or guidance.
Removed
In particular, the Organization for Economic Cooperation and Development (“OECD”) has reached agreement on an approach to establish a minimum global tax, set at 15%, for large multi-national enterprises, such as the Company.
Added
We conduct business in over 90 countries and operate 35 production locations worldwide. As a result, our business highly depends on global trade, as well as trade and cost factors that impact the specific countries in which we operate.
Removed
We have utilized various forms of interest rate hedge agreements, including interest rate swap agreements, forward rate agreements and cross currency swaps.
Added
Trade discussions with the United States and its various trading partners are fluid, and existing and future trade agreements are, and are expected to continue to be, subject to a number of uncertainties. For instance, recent events, including the new Presidential administration, have resulted in substantial regulatory uncertainty regarding international trade and trade policy.
Removed
The Merger may result in a loss of customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners and may result in the termination of existing contracts. Due to the Merger, some of the customers, distributors, suppliers, vendors, landlords, and other business partners of Mativ may terminate or scale back their current or prospective business relationships with Mativ.
Added
For example, President Trump and members of the U.S. Congress have called for substantial changes to tax polices, increases to tariffs on foreign imports into the United States, the imposition of new tariffs and border taxes.
Removed
Some customers may not wish to source a larger percentage of their needs from a single company or may feel that Mativ is too closely allied with one of their competitors. If relationships with customers, distributors, suppliers, vendors, landlords, joint venture partners and other business partners are adversely affected by the Merger, Mativ’s business and financial performance could suffer.
Added
The Trump administration has also raised the possibility of other initiatives that may affect international trade, including renegotiation of trade agreements with other countries and the possible introduction of import duties or tariffs. Many of our raw materials imports are subject to existing duties, tariffs and quotas.
Removed
Mativ’s future results may suffer if it does not effectively manage its expanded operations following the Merger. Following the completion of the Merger, the size of our business increased significantly.
Added
The possible implementation of tariffs or border taxes could increase our cost of goods sold, which could in turn require us to increase our prices and, in the event consumer demand declines as a result, negatively impact our financial performance.
Removed
During the year ended December 31, 2022, the Company became aware of a cyber attack that had been made against certain systems within the Company's network environment. Refer to Part II, Item 7.
Added
Furthermore, certain of our competitors may be better positioned than us to withstand or react to these challenges, and as a result we may lose market share to such competitors.
Removed
If we experience supply disruptions, we may not be able to develop alternate sourcing quickly.
Added
Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the U.S. or abroad, we cannot predict the impact, if any, that these changes could have to our business.
Added
If further tariffs are imposed on a broader range of imports, or if further retaliatory trade measures are taken by other countries in response to additional tariffs, we may be required to raise our prices or incur additional expenses, which may result in the loss of customers and harm our operating performance, sales and earnings.
Added
The Company could be subject to changes in its tax rates, the adoption of new U.S., or foreign tax legislation or exposure to additional tax liabilities. The Company is subject to taxes in the U.S. and in foreign jurisdictions where a number of the Company’s subsidiaries are organized.
Added
Pillar Two has introduced new complexity and uncertainty to the Company’s assessment of its taxes and further interpretation, adoption, and implementation of Pillar Two measures will continue to introduce new challenges with respect to compliance with its reporting requirements and may impact the Company’s effective tax rate and cash tax payments in future years.
Added
To date, we have been able to access credit when needed and on commercially reasonable terms.
Added
Similarly, while currently subject to a stay pending judicial review, the SEC has adopted extensive climate-related reporting requirements. The European Union has also established similar regulations, such as the Corporate Sustainability Reporting Directive (“CSRD”), and the European Union Deforestation Regulations (“EUDR”). The CSRD establishes extensive ESG-related disclosure requirements based on the European Sustainability Reporting Standards, including certain assurance obligations.
Added
The EUDR places limitations on the sale in the European Union of products linked to deforestation or the degradation of forests, and requires companies to implement due diligence systems to verify covered commodities and related products were not produced on deforested land.
Added
The standards used to identify and collect the information and data required pursuant to these emerging regulations are still developing and uncertain, which could result in increased costs related to complying with applicable reporting obligations under these standards, and could increase the risk of failing to comply.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company believes it has contained the incident, which only affected certain systems, and it has restored operations and notified affected individuals. The Company has put in place remediation measures designed to help prevent future similar attacks and has proactively undertaken to implement certain other enhancements to its security system.
Biggest changeThe Company put in place remediation measures designed to help prevent future similar attacks and implemented certain other enhancements to its security system. Governance Oversight of cybersecurity risk is a joint responsibility of the Board of Directors and the Audit Committee.
We employ a range of tools and services to inform our assessment, identification and management of material risks from cybersecurity threats, which include from time to time: • monitoring emerging data protection laws and implementing responsive changes to our processes; • undertaking periodic reviews of our policies with customers, partners, and suppliers and statements related to cybersecurity; • conducting cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; • conducting phishing email simulations for employees and contractors with access to corporate email systems; • requiring employees, as well as third-parties who provide services on our behalf, to treat information and data with care; and • educating our teams on incident response, conducting tabletop exercises and using the findings to improve our processes and technologies.
We employ a range of tools and services to inform our assessment, identification and management of material risks from cybersecurity threats, which include from time to time: • monitoring emerging data protection laws and implementing responsive changes to our processes; • undertaking periodic reviews of our policies with customers, partners, and suppliers and statements related to cybersecurity; • conducting cybersecurity management and incident training for employees involved in our systems and processes that handle sensitive data; • conducting phishing email simulations for employees and contractors with access to corporate email systems; • requiring employees, as well as third-parties who provide services on our behalf, to treat information and 29 data with care; and • educating our teams on incident response, conducting tabletop exercises and using the findings to improve our processes and technologies.
Item 1C. Cybersecurity 26 Risk management and strategy We have developed processes for assessing, identifying and managing material risks from cybersecurity threats. Our enterprise risk management system incorporates risks from cybersecurity threats alongside other risks to the company.
Item 1C. Cybersecurity Risk management and strategy We have developed processes for assessing, identifying and managing material risks from cybersecurity threats. Our enterprise risk management system incorporates risks from cybersecurity threats alongside other risks to the company.
His educational background includes a master’s in business administration in Information Systems from The State University of New York at Albany, and a bachelor’s degree in electrical engineering from Harcourt Butler Technological Institute, Kanpur, India. 28
His educational background includes a master’s in business administration in Information Systems from The State University of New York at Albany, and a bachelor’s degree in electrical engineering from Harcourt Butler Technological Institute, Kanpur, India. 30
In addition, the Company incurred financial costs to investigate and remediate the incident, some of which are expected to be mitigated by insurance. During the incident, the attackers accessed and exfiltrated Company data, including some personally identifying information of certain Company employees.
In addition, the Company incurred financial costs to investigate and remediate the incident, some of which was mitigated by insurance. During the incident, the attackers accessed and exfiltrated Company data, including some personally identifying information of certain Company employees. The Company contained the incident, notified affected individuals, and restored operations.
Additionally, the CIO briefs the Board of Directors on information security matters at least annually. In addition to oversight by the Audit Committee and the Board of Directors, our CIO chairs a Working Council that includes our Chief Financial Officer, Chief Human Resources and Communications Officer and our Chief Legal and 27 Administrative Officer.
In addition to oversight by the Audit Committee and the Board of Directors, our CIO chairs a Working Council that includes our Chief Financial Officer, Chief Human Resources and Communications Officer and our Chief Legal and Administrative Officer.
Governance Oversight of cybersecurity risk is a joint responsibility of the Board of Directors and the Audit Committee. The Company’s Chief Information Officer (the “CIO”) provides quarterly updates to the Audit Committee and the chair of the Audit Committee regularly updates the Board of Directors on cybersecurity matters potentially impacting the Company.
The Company’s Chief Information Officer (the “CIO”) provides quarterly updates to the Audit Committee and the chair of the Audit Committee regularly updates the Board of Directors on cybersecurity matters potentially impacting the Company. Additionally, the CIO briefs the Board of Directors on information security matters at least annually.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur principal production facilities as of December 31, 2023 are summarized below: Geographic Region ATM FBS U.S. (1) 17 7 Europe 11 1 Asia/Pacific 3 0 Americas (excluding U.S.) 1 0 Total (2) 32 8 (1) The manufacturing site in Quakertown, Pennsylvania serves both the ATM and FBS segments.
Biggest changeOur principal production facilities as of December 31, 2024 are summarized below: Geographic Region FAM SAS U.S. 10 10 Europe 3 7 Asia/Pacific 1 2 Americas (excluding U.S.) 0 2 Total (1) 14 21 (1) Includes leased sites as follows: United States - 8, Europe - 2, Asia/Pacific - 3, Americas - 1.
Item 2. Properties As of December 31, 2023, we conduct business in over 100 countries and operate 40 production locations worldwide, with offices and facilities in the United States, United Kingdom, China, Germany, France, Belgium, Poland, India, Canada, Spain, Italy, Mexico, Netherlands and Luxembourg.
Item 2. Properties As of December 31, 2024, we conduct business in over 90 countries and operate 35 production locations worldwide, with offices and facilities in the United States, United Kingdom, China, Germany, France, Belgium, India, Canada, Spain, Italy, Mexico, and Luxembourg.
(2) Includes leased sites as follows: United States - 6, Europe - 2, Asia/Pacific - 3, Americas - 1. We consider all of our operating facilities to be well-maintained, suitable for conducting our operations and business, and adequately insured.
We consider all of our operating facilities to be well-maintained, suitable for conducting our operations and business, and adequately insured.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

5 edited+1 added−6 removed2 unchanged
Biggest changeHowever, future events, such as changes in existing laws and regulations, or unknown contamination or costs of remediation of sites owned, operated or used for waste disposal by the Company (including contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional costs which could have a material effect on its financial condition or results of operations.
Biggest changeHowever, future events, such as changes in existing laws and regulations, or unknown contamination or costs of remediation of sites owned, operated or used for waste disposal by the Company (including contamination caused by prior owners and operators of such sites or other waste generators) may give rise to additional costs which could have a material effect on its financial condition or results of operations. 31 Indemnification Matters In connection with our spin-off from Kimberly-Clark in 1995, we undertook to indemnify and hold Kimberly-Clark harmless from claims and liabilities related to the businesses transferred to us that were not identified as excluded liabilities in the related agreements.
The nature of the Company's operations exposes it to the risk of claims with 29 respect to various environmental matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims.
The nature of the Company's operations exposes it to the risk of claims with respect to various environmental matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims.
In connection with the EP Divestiture, we undertook to indemnify and hold Evergreen Hill Enterprise harmless from claims and liabilities related to the EP business that were identified as excluded or specified liabilities in the related agreements up to an amount not to exceed $10 million. As of December 31, 2023, there were no material claims pending under this indemnification.
As of December 31, 2024, there were no material claims pending under this indemnification. In connection with the EP Divestiture, we undertook to indemnify and hold Evergreen Hill Enterprise harmless from claims and liabilities related to the EP business that were identified as excluded or specified liabilities in the related agreements up to an amount not to exceed $10 million.
Item 3. Legal Proceedings General We are involved in various legal proceedings relating to contracts, commercial disputes, taxes, environmental issues, employment and workers' compensation claims, product liability and other matters. We periodically review the status of these proceedings with both inside and outside counsel.
Item 3. Legal Proceedings General In the ordinary course of business, we are involved in various legal proceedings from time to time, including relating to contracts, commercial disputes, taxes, environmental issues, employment and workers' compensation claims, product liability and other matters. We periodically review the status of these proceedings with both inside and outside counsel.
We believe that the ultimate disposition of these matters will not have a material effect on the results of operations in a given quarter or year, but no assurances can be given in this regard. Below is a summary of major outstanding litigation.
We believe that the ultimate disposition of these matters will not have a material effect on the results of operations in a given quarter or year, but no assurances can be given in this regard. Refer to Note 19. Commitments and Contingencies, of the Notes to Consolidated Financial Statements for additional information.
Removed
Litigation Germany In January 2015, the Company initiated patent infringement proceedings in Germany against Glatz under multiple low ignition propensity ("LIP") related patents. In December 2017, the Dusseldorf Appeal Court affirmed the German District Court judgment on infringement of EP1482815 against Glatz.
Added
As of December 31, 2024, there were no material claims pending under this indemnification.
Removed
The Company filed an action against Glatz in the German District Court to set the amount of damages for the infringement and Glatz filed a counterclaim. Glatz filed an action in the German Patent Court to invalidate the German part of EP1482815.
Removed
The German Patent Court held that some of the patent claims at issue were invalid and also that another claim at issue was valid. The Company appealed the portion of the decision with respect to the claims held to be invalid.
Removed
The German Supreme Court held that the claims of German counterpart of EP1482815 relevant to the Glatz infringement action were invalid. This ruling has the effect of nullifying the infringement decision and injunction against Glatz and the Company’s claim for damages against Glatz. Glatz’s counterclaim against the Company was settled in June 2023.
Removed
The Company recognized a $4.9 million loss during the three months ended June 30, 2023, which was included in Other income (expense), net in the Consolidated Statements of Income (Loss). The settlement was paid in the three months ended September 30, 2023.
Removed
Indemnification Matters In connection with our spin-off from Kimberly-Clark in 1995, we undertook to indemnify and hold Kimberly-Clark harmless from claims and liabilities related to the businesses transferred to us that were not identified as excluded liabilities in the related agreements. As of December 31, 2023, there were no material claims pending under this indemnification.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities. We had no unregistered sales of equity securities during the fiscal year ended December 31, 2023. Repurchases of Equity Securities.
Biggest changeRecent Sales of Unregistered Securities. We had no unregistered sales of equity securities during the fiscal year ended December 31, 2024. Repurchases of Equity Securities. The Company did not repurchase shares during 2024 and the remaining amount of share repurchases currently authorized by our Board of Directors as of December 31, 2024 is $22.0 million.
The following graph compares the total cumulative stockholder return on our Common Stock during the period from December 31, 2018 through December 31, 2023 with the comparable cumulative total returns of the Russell 2000, S&P SmallCap 600 Capped Materials Index and self-constructed peer group, both of which we consider to be reflective of the performance of the industries in which we operate.
The following graph compares the total cumulative stockholder return on our Common Stock during the period from December 31, 2018 through December 31, 2024 with the comparable cumulative total returns of the Russell 2000, S&P SmallCap 600 Capped Materials Index and self-constructed peer group, both of which we consider to be reflective of the performance of the industries in which we operate.
Debt of the Notes to Consolidated Financial Statements, none of which under normal business conditions materially limit our ability to pay such dividends. We 31 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 of the Notes to Consolidated Financial 33 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.
Our common stock, $0.10 par value per share ("Common Stock") is trading on the New York Stock Exchange (NYSE") under the symbol "MATV." Prior to the Merger, our Common Stock was listed on the NYSE, trading under the symbol "SWM" since November 30, 1995. On February 26, 2024, our stock closed at $16.30 per share. Performance Graph.
Our common stock, $0.10 par value per share ("Common Stock") is trading on the New York Stock Exchange (NYSE") under the symbol "MATV." Prior to the Merger, our Common Stock was listed on the NYSE, trading under the symbol "SWM" since November 30, 1995. On February 24, 2025, our stock closed at $7.01 per share. Performance Graph.
On February 21, 2024, we announced a cash dividend of $0.10 per share payable on March 22, 2024 to stockholders of record as of the close of business on March 8, 2024. Our credit agreement covenants require that we maintain certain financial ratios, as disclosed in Note 14.
On February 19, 2025, we announced a cash dividend of $0.10 per share payable on March 28, 2025 to stockholders of record as of the close of business on March 14, 2025. Our credit agreement covenants require that we maintain certain financial ratios, as disclosed in Note 13.
As of February 26, 2024, there were 1902 stockholders of record. Dividends. We have declared and paid cash dividends on our Common Stock every fiscal quarter since the second quarter of 1996. In 2023, 2022 and 2021, we declared and paid cash dividends totaling $1.00, $1.68, and $1.76 per share, respectively.
As of February 24, 2025, there were 1,775 stockholders of record. Dividends. We have declared and paid cash dividends on our Common Stock every fiscal quarter since the second quarter of 1996. In 2024, 2023 and 2022, we declared and paid cash dividends totaling $0.40, $1.00, and $1.68 per share, respectively.
In August 2023, the Board of Directors authorized the repurchase of shares of Mativ Common Stock in an amount not to exceed $30.0 million. Under the current $30.0 million authorization for the share repurchases, the Company purchased 539, 386 shares for $8.0 million as of February 26, 2024.
In August 2023, the Board of Directors authorized the repurchase of shares of Mativ Common Stock in an amount not to exceed $30.0 million. Under the current $30.0 million authorization for the share repurchases, the Company purchased 539,386 shares for $8.0 million cumulatively as of February 24, 2025. Item 6. Reserved 34
Removed
The following table indicates the cost of and number of shares of our Common Stock we have repurchased during 2023 and the remaining amount of share repurchases currently authorized by our Board of Directors as of December 31, 2023: Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs (# shares) (in millions) January 1 - March 31, 2023 54,435 $ 24.37 — $ — $ — April 1 - June 30, 2023 64,344 20.37 — — — July 1-September 30, 2023 281,920 15.83 280,939 4.4 — October 1-October 31, 2023 258,447 13.70 258,447 3.6 25.6 November 1-November 30, 2023 — — — — 22.0 December 1-December 31, 2023 — — — — 22.0 Total 2023 659,146 $ 16.14 539,386 $ 8.0 $ 22.0 Transactions represent the purchase of vested restricted shares from employees to satisfy minimum tax withholding requirements upon vesting of stock-based awards and shares purchased as part of our repurchase program approved in July 2023 and announced on August 2, 2023.
Removed
From time to time, the Company uses corporate 10b5-1 plans to allow for share repurchases to be made at predetermined stock price levels, without restricting such repurchases to specific windows of time. Any future common stock repurchases will be dependent upon various factors, including the stock price of our Common Stock, strategic opportunities, strategic outlook and cash availability.
Removed
From time-to-time, certain of our officers and directors may sell shares pursuant to personal 10b5-1 plans. 32

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRisk 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, including the recent EP Divestiture; • The possibility the Company may be unable to achieve the strategic benefits of the EP Divestiture; • Adverse changes in the filtration, release liners, protective solutions, industrials and healthcare sectors impacting key ATM segment customers; • Changes in the source and intensity of competition in our commercial end-markets: filtration, protective solutions, release liners, healthcare, and industrials for ATM, and packaging and specialty papers for FBS; • Adverse changes in sales or production volumes, pricing and/or manufacturing costs in our ATM or FBS operating segments; 47 • 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; • The possibility that Mativ may be unable to successfully integrate Neenah's operations with those of Mativ and achieve expected synergies and operating efficiencies within the expected time-frames or at all; • Potential adverse reactions or changes to business relationships resulting from the Merger, including as it relates to the Company's ability to successfully renew existing client contracts on favorable terms or at all and obtain new clients; • Our ability to attract and retain key personnel, including as a result of the Merger, labor shortages, labor strikes, stoppages or other disruptions; • The substantial indebtedness Mativ has incurred and assumed in connection with the Merger and the need to generate sufficient cash flows to service and repay such debt; • 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 Real) 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, including the dilution caused by Mativ’s issuance of additional shares of its common stock in connection with the Merger; • Changes in employment, wage and hour laws and regulations in the U.S., France and elsewhere, including the loi de Securisation de l'emploi in France, unionization rules and regulations by the National Labor Relations Board in the U.S., 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, 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; • 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, including the COVID-19 pandemic and its variant strains; • 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; 48 • The impact of cybersecurity risks related to breaches of security pertaining to sensitive Company, customer, or vendor information, as well as breaches in the technology that manages operations and other business processes; and • Other factors described elsewhere in this document and from time to time in documents that we file with the SEC.
Biggest changeRisk 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; • 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; 47 • 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, 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; • 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; • 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.
Subject to certain conditions, including the absence of a default or event of default under the Credit Agreement, 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 financial 43 covenants set forth in the Credit Agreement and the aggregate of such increases does not exceed $400.0 million.
Subject to certain conditions, including the absence of a default or event of default under the Credit Agreement, 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 financial covenants set forth in the Credit Agreement and the aggregate of such increases does not exceed $400.0 million.
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.
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 45 transactions with the Company’s affiliates.
The 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 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.
During the year ended December 31, 2023, 42 financing activities primarily consisted of payments on our long-term debt of $834.6 million, $241.0 million of borrowings under the revolving credit facility and $55.3 million of dividends paid to the Company's stockholders.
During the year ended December 31, 2023, financing activities primarily consisted of payments on our long-term debt of $834.6 million, $241.0 million of borrowings under the revolving credit facility and $55.3 million of dividends paid to the Company's stockholders.
The Indenture also contains certain customary events of default, including failure to make payments in respect of the principal amount of the Notes, failure to make payments of interest on the Notes when due and payable, failure to comply with certain covenants and agreements and certain events of bankruptcy or insolvency.
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.
Refer to Note 14. 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 13. 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.
The covenants contained in our Indenture and amended Credit Agreement, each, as defined below in "Debt Instruments and Related Covenants," require that we maintain certain financial ratios, as disclosed in Note 14. Debt of the Notes to Consolidated Financial Statements, none of which under normal business conditions materially limit our ability to pay such dividends.
The covenants contained in our Indenture and amended Credit Agreement, each, as defined below in "Debt Instruments and Related Covenants," require that we maintain certain financial ratios, as disclosed in Note 13. Debt of the Notes to Consolidated Financial Statements, none of which under normal business conditions materially limit our ability to pay such dividends.
For a comparison of the Company’s results of operations for the year ended December 31, 2022 to the year ended December 31, 2021, 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, 2022, which was filed with the U.S.
For a comparison of the Company’s results of operations for the year ended December 31, 2023 to the year ended December 31, 2022, 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, 2023, which was filed with the U.S.
The Company was in compliance with all of its covenants under the Indenture at December 31, 2023. For a comparison of liquidity and capital resources and the Company’s cash flow activities for the fiscal year ended December 31, 2022 and 2021, refer to Item 7.
The Company was in compliance with all of its covenants under the Indenture at December 31, 2024. For a comparison of liquidity and capital resources and the Company’s cash flow activities for the fiscal year ended December 31, 2023 and 2022, refer to Item 7.
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 20.
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 19.
The Company was in compliance with all of its covenants under the amended Credit Agreement at December 31, 2023. With the current level of borrowing and forecasted results, we expect to remain in compliance with our amended Credit Agreement financial covenants.
The Company was in compliance with all of its covenants under the amended Credit Agreement at December 31, 2024. With the current level of borrowing and forecasted results, we expect to remain in compliance with our amended Credit Agreement financial covenants.
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. 49
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. 48
For both segments, we expect our 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 both 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.
Changes to the forecasted revenue growth, earnings before income taxes, depreciation and amortization (“EBITDA”), net debt, and benefits from Merger 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, 2023 and December 31, 2022 were 53.8% and 58.9%, respectively.
Changes to the forecasted revenue growth, earnings before income taxes, depreciation and amortization (“EBITDA”), net debt, and benefits from Merger 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, 2024 and December 31, 2023 were 55.9% and 53.8%, respectively.
The Company may redeem some or all of the Notes at any time on or after October 1, 2021, at the redemption prices set forth in the Indenture, together with accrued and unpaid interest, if any, to, but excluding, the redemption date.
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.
Commitments and Contingencies of the Notes to Consolidated Financial Statements. 35 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 25% of our total assets as of December 31, 2023.
Commitments and Contingencies of the Notes to Consolidated Financial Statements. 36 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 25% of our total assets as of December 31, 2024.
In addition, 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 SWM Luxembourg.
In addition, 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).
Under the terms of the amended Credit Agreement, the Company is required to maintain certain financial ratios and comply with certain financial covenants, including maintaining a net debt to EBITDA ratio, as defined in the amended Credit Agreement, calculated on a trailing four fiscal quarter basis, not greater than 4.50x and an interest coverage ratio, also as defined in the amended Credit Agreement, of not less than 3.00x.
Under the terms of the amended Credit Agreement, the Company is required to maintain certain financial ratios and comply with certain financial covenants, including maintaining a net debt to EBITDA ratio, as defined in the amended Credit Agreement, calculated on a trailing four fiscal quarter basis, not greater than 5.50x and an interest coverage ratio, also as defined in the amended Credit Agreement, of not less than 2.50x.
Share Repurchases In 2023 we repurchased 659,146 shares of our common stock at a cost of $10.7 million, of which $8.0 million were repurchased as part of the share buyback program authorized by the Board of Directors in August 2023. In 2022, we repurchased 273,027 shares of our common stock at a cost of $6.9 million.
Share Repurchases In 2023, we repurchased 659,146 shares of our common stock at a cost of $10.7 million of which $8.0 million were repurchased as part of the share buyback program authorized by the Board of Directors in August 2023.
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. Cash Requirements As of December 31, 2023, $117.3 million of our $120.2 million of cash and cash equivalents was held by foreign subsidiaries.
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. Cash Requirements As of December 31, 2024, $78.2 million of our $94.3 million of cash and cash equivalents was held by foreign subsidiaries.
Forward-looking statements herein are made only as of the date of this document, and we do not undertake any 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.
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.
The weighted average effective interest rate on our debt facilities, including the impact of interest rate hedges, was approximately 5.98% and 5.11% for the years-ended December 31, 2023 and 2022, respectively.
The weighted average effective interest rate on our debt facilities, including the impact of hedges, was approximately 6.41% and 5.98% for the years-ended December 31, 2024 and 2023, respectively.
We have certain purchase obligations as of December 31, 2023, 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 $79.2 million of which $69.4 million is obligated over the next year and the remainder is obligated over the next five years.
We have certain purchase obligations as of December 31, 2024, 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 $100.6 million of which $84.3 million is obligated over the next year and the remainder is obligated over the next five years.
Segment Information of the Notes to the Consolidated Financial Statements for information on our segments after the Merger. 34 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.
Discontinued Operations of the Notes to Consolidated Financial Statements for more information on the discontinued operation and transaction. 35 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.
The Credit Agreement was further amended effective February 22, 2022 to adjust the step-down schedule for the maximum net debt to EBITDA ratio. Refer to Note 14. 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 $160.5 million as of December 31, 2023.
The Credit Agreement was further amended effective 43 February 22, 2022 to adjust the step-down schedule for the maximum net debt to EBITDA ratio. Refer to Note 14. Debt of the Notes to Consolidated Financial Statements for additional information about the Term Loan B Facility.
Shares that are not part of the buyback program are repurchased for the value of employees' stock-based compensation share awards surrendered to satisfy their personal statutory income tax withholding obligations.
Shares that are not part of the buyback program are repurchased or retired for the value of employees' stock-based compensation share awards surrendered to satisfy their personal statutory income tax withholding obligations. In 2024, this activity was immaterial.
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%.
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%.
Debt Instruments and Related Covenants The following table presents activity related to our debt instruments for the years-ended (in millions): Years Ended December 31, 2023 2022 Proceeds from long-term debt $ 241.0 $ 774.9 Payments on long-term debt (834.6) (340.6) Net (payments) proceeds from borrowings $ (593.6) $ 434.3 Net repayments from borrowings were $593.6 million during the year ended December 31, 2023 compared to net proceeds from borrowings of $434.3 million during the prior year-end.
Debt Instruments and Related Covenants The following table presents activity related to our debt instruments for the years-ended (in millions): Years Ended December 31, 2024 2023 Proceeds from long-term debt $ 531.0 $ 241.0 Payments on long-term debt (554.7) (834.6) Net (payments) proceeds from borrowings $ (23.7) $ (593.6) Net payments from borrowings were $23.7 million during the year ended December 31, 2024 compared to net payments from borrowings of $593.6 million during the prior year-end.
Subsequent Event of the Notes to Consolidated Financial Statements, the Company plans to reorganize into two new segments starting in the first quarter of 2024: Filtration & Advanced Materials (FAM), focused primarily on filtration, industrial netting, and protective solutions end markets, and Sustainable & Adhesive Solutions (SAS), focused primarily on the tape, release liners, industrials, healthcare, and packaging and specialty papers end markets.
OUTLOOK The Company reorganized into two new segments starting in the first quarter of 2024: Filtration & Advanced Materials (FAM), focused primarily on filtration, industrial netting, and protective solutions end markets, and Sustainable & Adhesive Solutions (SAS), focused primarily on the tape, release liners, industrials, healthcare, and packaging and specialty papers end markets.
The applicable margin for borrowings under the revolving credit agreement is expected to range from 1.00% to 2.50% for SOFR loans and EURIBOR loans, and from 0.00% to 1.50% for base rate loans, in each case, depending on the Company’s then current net debt to EBITDA ratio.
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.
The applicable margin for borrowings under the Term Loan A Credit Facility is expected to range from 1.25% to 2.75% for SOFR loans and from 0.25% to 1.75% for base rate loans, in each case depending on the Company’s then current net debt to EBITDA ratio. 44 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 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.
Net Loss and Loss per Share Net loss in the year ended December 31, 2023 was $507.7 million, or $9.33 per diluted share, compared to net loss of $68.9 million, or $1.64 per diluted share, during the prior year period.
Net Loss and Loss per Share Net loss in the year ended December 31, 2024 was $48.7 million, or $0.90 per diluted share, compared to net loss of $507.7 million, or $9.33 per diluted share, during the prior year period.
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.
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.
Debt interest obligations as of December 31, 2023 amount to $294.9 million over the next five years, Approximately $88.0 million, $87.9 million, and $82.2 million is due annually in 2024, 2025, and 2026, respectively, with the remainder being due in 2027 and 2028. Other Obligations.
Debt interest obligations as of December 31, 2024 amount to $281.7 million over the next five years, Approximately $83.2 million, $83.1 million, and $56.0 million is due annually in 2025, 2026, and 2027, respectively, with the remainder being due in 2028 and 2029. Other Obligations.
We have made this election and our transition tax due as a contractual obligation.as of December 31, 2023 is $13.9 million of which $6.2 million is due in the next year and $7.7 million is due in 2025. We have no obligations due in the years 2026 through 2028 and thereafter. 46 OUTLOOK As outlined in Note 22.
We have made this election and our transition tax due as a contractual obligation as of December 31, 2024 is $7.7 million of which $7.7 million is due in the next year. We have no obligations due in the years 2026 through 2029 and thereafter.
"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, 2022, which was filed with the U.S. Securities and Exchange Commission on March 1, 2023.
"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, 2023, which was filed with the U.S. Securities and Exchange Commission on February 29, 2024. Other Factors affecting Liquidity and Capital Resources Debt Interest Obligations.
Additionally, we added a $650.0 million delayed draw term loan facility (the "Delayed Draw Term Loan Facility") to be funded concurrent with the closing of the Merger. On July 5, 2022, in connection with the consummation of the Merger, the Company borrowed $650.0 million under the Delayed Draw Term Loan Facility.
Additionally, we added a $650.0 million delayed draw term loan facility (the "Delayed Draw Term Loan Facility") to be funded concurrent with the closing of the Merger.
Income Taxes The $26.8 million expense and $27.6 million benefit for income taxes in the years-ended December 31, 2023 and 2022, respectively, resulted in an effective tax rate of (5.6)% compared with 28.6% in the prior year. The net change was primarily due to adjustments to valuation allowances, non-deductible goodwill impairment, and acquisition related nondeductible expenses due to the Merger.
Income Taxes The $30.2 million benefit and $26.8 million expense for income taxes in the years-ended December 31, 2024 and 2023, respectively, resulted in an effective tax rate of 38.3% compared with (5.6)% in the prior year. The net change was primarily due a non-deductible goodwill impairment in the prior period, and a change in a valuation allowance.
The increase is attributable primarily to an increase in cash. In the year ended December 31, 2023, net changes in operating working capital decreased cash flow by $19.8 million primarily related to decreases in accounts payable and other current liabilities. In 2022, net changes in operating working capital increased cash flow by $63.1 million.
In the year ended December 31, 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.
Securities and Exchange Commission on March 1, 2023. Discontinued Operations Net income from discontinued operations in the year ended December 31, 2023 was $198.2 million, or $3.64 per diluted share, compared to net income of $62.3 million, or $1.46 per diluted share, during the prior year period.
Securities and Exchange Commission on February 29, 2024. Discontinued Operations The Company had no operations classified as discontinued operations in the year ended December 31, 2024 and had net income from discontinued operations of $198.2 million, or $3.64 per diluted share, during the prior year period.
Cash Provided by Operations Net cash provided by operations was $76.6 million in the year ended December 31, 2023, compared with $124.6 million in the prior year. The decrease was related to year-over-year movements in working capital related cash flows.
Cash Provided by Operations Net cash provided by operations was $94.8 million in the year ended December 31, 2024, compared with $76.6 million in the prior year. The increase was related to lower net loss adjusted for non-cash items and favorable year-over-year movements in working capital related cash flows.
The Indenture provides that interest on the Notes will accrue from September 25, 2018, and is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2019, and the Notes mature on October 1, 2026.
The Indenture provides that interest on the 2029 Notes will accrue from October 7, 2024 and 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 recorded a gain on sale of the EP business of $176.3 million ($170.0 million, net of income taxes) in discontinued operations in the year ended December 31, 2023. The gain and cash proceeds are subject to customary working capital adjustments during a specified period following the sale close date.
The Company recorded a gain on sale of the EP business of $176.3 million ($170.0 million, net of income taxes) in discontinued operations in the year ended December 31, 2023.
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%. On September 29, 2023, the Company further amended its Credit Agreement to permit the consummation of the sale of the Company's EP business.
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%.
Other Income (Expense), Net Other income (expense), net was expense of $4.8 million in the year ended December 31, 2023 compared to income of $1.0 million for the year ended December 31, 2022, an increase in expense of $5.8 million. The increase in expense was driven by legal and tax settlement expenses.
Other Income (Expense), Net Other income (expense), net was expense of $3.2 million in the year ended December 31, 2024 compared to expense of $4.8 million for the year ended December 31, 2023, a decrease in expense of $1.6 million. The decrease in expense was driven by fewer legal and tax settlements in the current period.
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.
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. 46 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.
The Notes 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 amended Credit Agreement or that guarantees certain other indebtedness, subject to certain exceptions. 45 The Notes were issued pursuant to an Indenture, dated as of September 25, 2018 (the “Indenture”), by and among the Company, the guarantors listed therein and a third-party financial institution, as trustee.
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.
Nonmanufacturing Expenses The following table presents nonmanufacturing expenses (in millions): Percent Change Percent of Net Sales 2023 2022 Change 2023 2022 Selling expense $ 78.9 $ 59.8 $ 19.1 31.9 % 3.9 % 3.7 % Research and development expense 21.2 18.8 2.4 12.8 % 1.0 % 1.1 % General expense 246.0 248.5 (2.5) (1.0) % 12.1 % 15.2 % Nonmanufacturing expenses $ 346.1 $ 327.1 $ 19.0 5.8 % 17.0 % 20.0 % Nonmanufacturing expenses of $346.1 million during the year ended December 31, 2023 increased $19.0 million, or 5.8%, compared to the prior year-end primarily driven by the full-year impact of the Merger with Neenah including integration related costs. 39 Restructuring and Other Impairment Expense The following table presents restructuring and other impairment expense by segment (in millions): Percent of Net Sales 2023 2022 Change 2023 2022 Advanced Technical Materials $ 12.4 $ 17.2 $ (4.8) 0.8 % 1.2 % Fiber-Based Solutions 9.9 1.1 8.8 2.4 % 0.5 % Unallocated expenses 0.3 0.8 (0.5) Total $ 22.6 $ 19.1 $ 3.5 1.1 % 1.2 % The Company incurred total restructuring and other impairment expense of $22.6 million in the year ended December 31, 2023, compared to $19.1 million in the year ended December 31, 2022, an increase of $3.5 million, or 18.3%.
Nonmanufacturing Expenses The following table presents nonmanufacturing expenses (in millions): Percent Change Percent of Net Sales 2024 2023 Change 2024 2023 Selling and general expense $ 233.8 $ 263.9 $ (30.1) (11.4) % 11.8 % 13.0 % Research and development expense 23.0 21.2 1.8 8.5 % 1.2 % 1.0 % Intangible asset amortization expense 62.9 61.0 1.9 3.1 % 3.2 % 3.0 % Nonmanufacturing expenses $ 319.7 $ 346.1 $ (26.4) (7.6) % 16.2 % 17.0 % Nonmanufacturing expenses of $319.7 million during the year ended December 31, 2024 decreased $26.4 million, or 7.6%, compared to the prior year period primarily driven by lower integration related and divestiture costs, and savings from the Plan. 39 Restructuring and Other Impairment Expense The following table presents restructuring and other impairment expense by segment (in millions): Percent of Net Sales 2024 2023 Change 2024 2023 FAM $ 5.7 $ 2.8 $ 2.9 0.7 % 0.4 % SAS 29.0 19.4 9.6 2.4 % 1.6 % Unallocated expenses 3.4 0.4 3.0 Total $ 38.1 $ 22.6 $ 15.5 1.9 % 1.1 % The Company incurred total restructuring and other impairment expense of $38.1 million in the year ended December 31, 2024, compared to $22.6 million in the year ended December 31, 2023, an increase of $15.5 million.
In the ATM segment, operating loss in the year ended December 31, 2023 was $281.5 million compared to operating profit of $98.8 million in the year ended December 31, 2022, a decrease of $380.3 million. primarily attributed to a goodwill impairment recorded of $401.0 million. For more information on the goodwill impairment, refer to Note 10.
In the SAS segment, operating profit in the year ended December 31, 2024 was $45.4 million, an increase of $421.7 million, compared to operating loss of $376.3 million in the year ended December 31, 2023. The increase was 40 primarily driven by the 2023 $401.0 million goodwill impairment. For more information on the goodwill impairment, refer to Note 10.
Gross Profit The following table presents gross profit (in millions): Percent Change Percent of Net Sales 2023 2022 Change 2023 2022 Net sales $ 2,026.0 $ 1,636.9 $ 389.1 23.8 % 100.0 % 100.0 % Cost of products sold 1,670.2 1,330.9 339.3 25.5 % 82.4 % 81.3 % Gross profit $ 355.8 $ 306.0 $ 49.8 16.3 % 17.6 % 18.7 % Gross profit of $355.8 million during the year ended December 31, 2023 increased $49.8 million, or 16.3%, compared to the prior year-end.
Gross Profit The following table presents gross profit (in millions): Percent Change Percent of Net Sales 2024 2023 Change 2024 2023 Net sales $ 1,981.1 $ 2,026.0 $ (44.9) (2.2) % 100.0 % 100.0 % Cost of products sold 1,617.0 1,670.2 (53.2) (3.2) % 81.6 % 82.4 % Gross profit $ 364.1 $ 355.8 $ 8.3 2.3 % 18.4 % 17.6 % Gross profit of $364.1 million during the year ended December 31, 2024 increased $8.3 million, or 2.3%, compared to the prior year period which reflected favorable relative net selling price and input cost performance, partially offset by lower volume/mix.
Cash Provided by Financing Activities Cash used in financing activities in the year ended December 31, 2023 was $662.0 million compared to cash provided by financing activities of $332.5 million in the prior year.
Cash used in investing activities for the current and prior years were mainly attributable to capital spending. Cash Provided by (Used in) Financing Activities Cash used in financing activities in the year ended December 31, 2024 was $55.9 million compared to used in financing activities of $662.0 million in the prior year.
The Company also incurred restructuring and other impairment charges of $22.6 million and $19.1 million, in 2023 and 2022, respectively, primarily related to exiting certain end markets and site closures. 37 RESULTS OF OPERATIONS Years Ended December 31, 2023 2022 (1) 2021 (2) (in millions, except per share amounts) Net sales $ 2,026.0 $ 1,636.9 $ 930.7 Cost of products sold 1,670.2 1,330.9 747.5 Gross profit 355.8 306.0 183.2 Selling expense 78.9 59.8 32.5 Research and development expense 21.2 18.8 11.8 General expense 246.0 248.5 153.2 Total nonmanufacturing expenses 346.1 327.1 197.5 Goodwill impairment expense 401.0 — — Restructuring and other impairment expense 22.6 19.1 1.9 Operating loss (413.9) (40.2) (16.2) Interest expense 62.2 57.3 40.4 Other income (expense), net (4.8) 1.0 30.1 Loss from continuing operations before income taxes (480.9) (96.5) (26.5) Income tax (expense) benefit (26.8) 27.6 28.2 Net income (loss) from continuing operations (507.7) (68.9) 1.7 Income from discontinued operations, net of tax 198.2 62.3 87.2 Net income (loss) $ (309.5) $ (6.6) $ 88.9 Dividends to participating securities (0.7) (0.9) (0.6) Undistributed earnings available to participating securities — — (0.5) Net income (loss) attributable to common stockholders $ (310.2) $ (7.5) $ 87.8 Net income (loss) per share from continuing operations Basic $ (9.33) $ (1.64) $ 0.02 Diluted $ (9.33) $ (1.64) $ 0.02 (1) Results during the year ended December 31, 2022 include Neenah from the July 6, 2022 acquisition date to December 31, 2022.
RESULTS OF OPERATIONS Years Ended December 31, 2024 2023 2022 (1) (in millions, except per share amounts) Net sales $ 1,981.1 $ 2,026.0 $ 1,636.9 Cost of products sold 1,617.0 1,670.2 1,330.9 Gross profit 364.1 355.8 306.0 Selling and general expense 233.8 263.9 254.9 Research and development expense 23.0 21.2 18.8 Intangible asset amortization expense 62.9 61.0 53.4 Total nonmanufacturing expenses 319.7 346.1 327.1 Goodwill impairment expense — 401.0 — Restructuring and other impairment expense 38.1 22.6 19.1 Operating profit (loss) 6.3 (413.9) (40.2) Interest expense 74.7 62.2 57.3 Loss on debt extinguishment 7.3 — — Other income (expense), net (3.2) (4.8) 1.0 Loss from continuing operations before income taxes (78.9) (480.9) (96.5) Income tax expense (benefit) (30.2) 26.8 (27.6) Net loss from continuing operations (48.7) (507.7) (68.9) Income from discontinued operations, net of tax — 198.2 62.3 Net loss $ (48.7) $ (309.5) $ (6.6) Net income (loss) per share from continuing operations Basic $ (0.90) $ (9.33) $ (1.64) Diluted $ (0.90) $ (9.33) $ (1.64) (1) Results during the year ended December 31, 2022 include Neenah from the July 6, 2022 acquisition date to December 31, 2022. 38 Comparison of the Years Ended December 31, 2024 and 2023 Net Sales The following table presents net sales by segment (in millions): 2024 2023 Change Percent Change FAM $ 766.5 $ 810.0 $ (43.5) (5.4) % SAS 1,214.6 1,216.0 (1.4) (0.1) % Total $ 1,981.1 $ 2,026.0 $ (44.9) (2.2) % Net sales of $1,981.1 million during the year ended December 31, 2024 decreased $44.9 million, or 2.2% compared to the prior year-end.
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.
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 2024, we reported a net loss of $48.7 million on total net sales of $1,981.1 million.
Under the terms of the Amended Credit Agreement, Mativ will continue to be required to maintain certain financial ratios and comply with certain financial covenants consistent with the Prior Agreement, including a requirement to maintain a maximum net debt to EBITDA ratio of (a) 4.75 to 1.00 for the consecutive trailing four fiscal quarter period ended September 30, 2023, (b) (i) solely if the Transaction has not been completed on or before December 31, 2023, 4.75 to 1.00, or (ii) otherwise, 4.50 to 1.00, for such period ended December 31, 2023, and (c) 4.50 to 1.00 for such period ended March 31, 2024 and thereafter.
Under the terms of the amended Credit Agreement, Mativ will continue to be required to maintain certain financial ratios and comply with certain financial covenants, as amended by the Amendment, 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.
LIQUIDITY AND CAPITAL RESOURCES Liquidity & Debt Overview As of December 31, 2023, the Company had $1,104.6 million of total debt, a decrease of $585.4 million year over year, $120.2 million of cash, and undrawn capacity on its $600.0 million revolving line of credit facility (the "Revolving Facility") of $333.6 million.
The gain and cash proceeds are subject to customary working capital adjustments during a specified period following the sale close date. 41 LIQUIDITY AND CAPITAL RESOURCES Liquidity & Debt Overview As of December 31, 2024, the Company had $1,089.3 million of total debt, a decrease of $15.3 million year over year, $94.3 million of cash, and undrawn capacity on its $600.0 million revolving line of credit facility (the "Revolving Facility") of $356.4 million.
Per the terms of the Company's amended Credit Agreement, net leverage 41 was 3.93 at December 31, 2023, versus a current maximum covenant ratio of 4.50x. The Company’s nearest debt maturity is our 6.875% senior unsecured notes which are due in 2026.
Per the terms of the Company's amended Credit Agreement, net leverage was 4.4 at December 31, 2024, 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.
After an impairment loss is recognized, the adjusted carrying amount of goodwill is its new accounting basis. During the year ended December 31, 2023, we performed an interim quantitative goodwill impairment test, which resulted in a non-cash impairment charge of $401.0 million in the third quarter of 2023. Refer to Note 10.
During the year ended December 31, 2023, we performed an interim quantitative goodwill impairment test, which resulted in a non-cash impairment charge of $401.0 million related to certain reporting units which are now included in the SAS reportable segment. Refer to Note 10. Goodwill, of the Notes to Consolidated Financial Statements for additional information.
Debt of the Notes to Consolidated Financial Statements. Dividend Payments We have declared and paid cash dividends on our common stock every fiscal quarter since the second quarter of 1996.
Dividend Payments We have declared and paid cash dividends on our common stock every fiscal quarter since the second quarter of 1996. On February 19, 2025, we announced a cash dividend of $0.10 per share payable on March 28, 2025, to stockholders of record as of the close of business on March 14, 2025.
The consolidated financial statements and the notes thereto, unless otherwise indicated, are on a continuing operations basis. Refer to Note 9. Discontinued Operations of the Notes to Consolidated Financial Statements for more information on the discontinued operation and transaction.
Effective with the sale, the EP business is presented as a discontinued operation for all periods presented and certain prior period amounts have been retrospectively recasted to reflect these changes. The consolidated financial statements and the notes thereto, unless otherwise indicated, are on a continuing operations basis. Refer to Note 9.
Indenture for 6.875% Senior Unsecured Notes Due 2026 On September 25, 2018, the Company closed a private offering of $350.0 million of 6.875% senior unsecured notes due 2026 (the “Notes”).
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”).
Goodwill and Unamortized Intangible Assets Goodwill is not subject to amortization and is tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset may be impaired.
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.
Working Capital As of December 31, 2023, we had net operating working capital (excluding Current assets held for sale of discontinued operations and Current liabilities held for sale of discontinued operations) of $433.9 million including cash and cash equivalents of $120.2 million, compared with net operating working capital of $411.7 million including cash and cash equivalents of $101.1 million as of December 31, 2022.
Working Capital As of December 31, 2024, we had net operating working capital of $386.2 million including cash and cash equivalents of $94.3 million, compared with net operating working capital of $433.9 million including cash and cash equivalents of $120.2 million as of December 31, 2023. The decrease is attributable primarily to a decrease in cash.
FBS segment net sales of $416.0 million during the year ended December 31, 2023 increased $175.3 million, or 72.8% compared to the prior year-end. Sales reflected the full-year impact of the Merger with Neenah, and lower volume partly offset by higher selling prices.
FAM segment net sales of $766.5 million during the year ended December 31, 2024 decreased $43.5 million, or 5.4% compared to prior year-end. Sales reflected lower volume (-3.7%) and lower selling prices (-1.9%). SAS segment net sales of $1,214.6 million during the year ended December 31, 2024 decreased $1.4 million, or 0.1% compared to the prior year-end.
In the goodwill impairment test, fair value of a reporting unit is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables.
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.
Unallocated expenses in the year ended December 31, 2023 were $137.0 million, a decrease of $17.0 million, or 11.0%, compared to the prior year-end. The decrease compared to the prior year period is primarily due to the higher integration related costs incurred in the prior year period.
Goodwill of the Notes to Consolidated Financial Statements. Unallocated expenses in the year ended December 31, 2024 were $109.1 million, a decrease of $27.8 million, or 20.3%, compared to the prior year period. The decrease is primarily driven by lower integration related and divestiture costs, and savings from the Plan.
ATM and FBS segment net sales increased $213.8 million, or 15.3% and $175.3 million, or 72.8%, respectively, compared to prior year primarily driven by the full-year impact of the Merger with Neenah. The increase in net loss in 2023 compared to 2022 was primarily due to the goodwill impairment recorded of $401.0 million.
SAS segment net sales decreased $1.4 million, or 0.1%, compared to prior year primarily driven by lower selling prices (-0.6%), partially offset by higher volume (2.3%) net of closed and divested facilities (-2.0%). The decrease in net loss in 2024 compared to 2023 was primarily due to the $401.0 million goodwill impairment recorded in the prior period.
The annual impairment tests performed on October 1, 2023 and 2022 did not indicate any impairment of intangible assets. The fair value estimates used in the assessment of impairment for both goodwill and intangible assets consider historical trends in addition to significant assumptions including projections of future performance.
Future deterioration in these conditions may require us to perform an interim quantitative impairment test in 2025. 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.
Interest Expense Interest expense was $62.2 million in the year ended December 31, 2023, an increase of $4.9 million, or 8.6%, compared to the year ended December 31, 2022. Interest expense increased mainly due to the incremental expense of assuming Neenah's debt and higher average interest rates.
Interest Expense Interest expense was $74.7 million in the year ended December 31, 2024, an increase of $12.5 million, or 20.1%, compared to the year ended December 31, 2023.
Cash Used in Investing Cash used for investing activities in the year ended December 31, 2023 was $61.4 million compared to $469.3 million in the prior year. Cash used in investing activities for the current year was mainly attributable to capital spending, and reflected the addition of the Neenah operations.
In 2023, net changes in operating working capital decreased cash flow by $19.8 million primarily related to decreases in accounts payable and other current liabilities. Cash Provided by (Used in) Investing Cash used in investing activities in the year ended December 31, 2024 was $44.7 million compared to $61.4 million in the prior year.
For more information on the goodwill impairment, refer to Note 10. Goodwill of the Notes to Consolidated Financial Statements.
For more information on the goodwill impairment, refer to Note 10. Goodwill of the Notes to Consolidated Financial Statements. The Company incurred restructuring and other impairment charges of 37 $38.1 million and $22.6 million, in 2024 and 2023, respectively, primarily related to exiting certain product categories and site closures.
The assets were sold during the third quarter of 2022 for net proceeds of $4.6 million and a loss of $0.4 million. In the FBS segment, the Company incurred $9.9 million of restructuring and other impairment expense for the year ended December 31, 2023 related to long-lived assets at our Eerbeek, Netherlands facility.
Restructuring and other impairment expenses in the SAS segment, excluding costs associated with the Plan, included $16.2 million of impairment charges for the year ended December 31, 2024, to fully impair the net assets at our Eerbeek, Netherlands facility, which was sold in the fourth quarter of 2024.
(17.5) % 7.1 % Fiber-Based Solutions 4.6 15.0 (10.4) (69.3) % 1.1 % 6.2 % Unallocated expenses (137.0) (154.0) 17.0 11.0 % Total $ (413.9) $ (40.2) $ (373.7) (20.4) % (2.5) % Operating loss was $413.9 million in the year ended December 31, 2023, compared to $40.2 million in the year ended December 31, 2022, a decrease of $373.7 million.
Operating Profit (Loss) The following table presents operating profit (loss) by segment (in millions): Percent Change Return on Net Sales 2024 2023 Change 2024 2023 FAM $ 70.0 $ 99.3 $ (29.3) (29.5) % 9.1 % 12.3 % SAS 45.4 (376.3) 421.7 N.M. 3.7 % (30.9) % Unallocated expenses (109.1) (136.9) 27.8 (20.3) % Total $ 6.3 $ (413.9) $ 420.2 N.M. 0.3 % (20.4) % Operating profit was $6.3 million in the year ended December 31, 2024, compared to a loss of $413.9 million in the year ended December 31, 2023, an increase of $420.2 million.
Cash paid for income taxes (net of refunds) was $37.5 million for the year ended December 31, 2023. We believe that our sources of liquidity and capital, including cash on-hand, cash generated from operations and our existing credit facilities, will be sufficient to finance our continued operations, our current and long-term growth plans, and dividend payments.
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.
During the year ended December 31, 2022, financing activities consisted primarily of $774.9 million of proceeds from borrowings under the Delayed Draw Term Loan Facility and Revolving Facility. The proceeds from the Delayed Draw Term Loan was used to repay Neenah's outstanding debt of $504.9 million upon consummation of the Merger. Refer to Note 5.
During the year ended December 31, 2024, financing 42 activities primarily consisted of payments on our long-term debt of $554.7 million, $531.0 million of borrowings under the revolving credit facility and $21.6 million of dividends paid to the Company's stockholders.
Removed
EP Divestiture On August 1, 2023, the Company entered into the Offer Letter with Evergreen Hill Enterprise pursuant to which Evergreen Hill Enterprise made the Offer to acquire the Company’s EP Business for $620.0 million in cash, subject to customary closing date adjustments.
Added
Organizational Realignment Plan As part of the organizational realignment initiative effective during the first quarter of 2024, we reorganized into two new reportable segments: Filtration & Advanced Materials ("FAM") and Sustainable & Adhesive Solutions ("SAS"). Refer to Note 1. General of the Notes to the Consolidated Financial Statements for more information on our new segment structure.
Removed
Pursuant to the terms of the Offer Letter, following the conclusion of the French Consultation Process, the Company accepted Evergreen Hill Enterprise's Offer and countersigned the Purchase Agreement, with respect to the EP divestiture on October 4, 2023. On November 30, 2023 the Company completed the sale of the EP Business.
Added
All information presented within this MD&A is based on the new segment structure for comparative purposes. EP Divestiture On November 30, 2023, the Company completed the sale of the EP business to Evergreen Hill Enterprise. With the sale of the EP business, Mativ ceased participating in tobacco-based products markets.
Removed
With the sale of the EP business, Mativ ceased participating in tobacco-based products markets. Effective with the Offer, the EP business is presented as a discontinued operation for all periods presented. Current and non-current assets and liabilities of the EP business are classified as held for sale, and certain prior period amounts have been retrospectively revised to reflect these changes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFurther, some of the resins we use in our ATM segment are only available from a single supplier, or a limited number of suppliers. Consequently, such supplier(s) can control the availability and thus the cost of the resins we use, notwithstanding any changes in the cost of oil.
Biggest changeFurther, some of the resins we use are only available from a single supplier, or a limited number of suppliers. Consequently, such supplier(s) can control the availability and thus the cost of the resins we use, notwithstanding any changes in the cost of oil.
As a result, we do not believe that the substitution of such alternative pulp or specialty chemicals would have a material effect on our operations in the long run. 51 We believe that, while our exposure to commodity price risk is material to our results of operations, our customers understand such risk and over time changes in the price of the commodities used in our manufacturing processes are typically reflected in selling prices.
As a result, we do not believe that the substitution of such alternative pulp or specialty chemicals would have a material effect on our operations in the long run. 50 We believe that, while our exposure to commodity price risk is material to our results of operations, our customers understand such risk and over time changes in the price of the commodities used in our manufacturing processes are typically reflected in selling prices.
Periodically, when we believe it is appropriate to do so, we enter into agreements to procure a portion of our energy for future periods in order to reduce the uncertainty of future energy costs. However, in recent years this has only marginally slowed the increase in energy costs due to the volatile changes in energy prices we have experienced. 52
Periodically, when we believe it is appropriate to do so, we enter into agreements to procure a portion of our energy for future periods in order to reduce the uncertainty of future energy costs. However, in recent years this has only marginally slowed the increase in energy costs due to the volatile changes in energy prices we have experienced. 51
The average list price of NBSK for the year of 2023 was $1,500 per ton. We normally maintain approximately 50 to 90 days of inventories to support our operations. As a result, there is a lag in the impact of changes in the per ton list price of resin and wood pulp on our cost of products sold.
The average list price of NBSK for the year of 2024 was $1,500 per ton. We normally maintain approximately 50 to 90 days of inventories to support our operations. As a result, there is a lag in the impact of changes in the per ton list price of resin and wood pulp on our cost of products sold.
Our ATM segment acquires certain specialized pulp from a limited number of global suppliers and certain critical specialty chemicals from a limited number of suppliers. In general, these supply arrangements are covered by formal contracts and represent multi-year business relationships that have historically been sufficient to meet our needs.
Our FAM segment acquires certain specialized pulp from a limited number of global suppliers and certain critical specialty chemicals from a limited number of suppliers. In general, these supply arrangements are covered by formal contracts and represent multi-year business relationships that have historically been sufficient to meet our needs.
With respect to our commodity price risk, a hypothetical 10% change in per ton resin prices would impact our future annual pre-tax earnings by approximately $21.4 million, assuming no compensating change in our selling prices.
With respect to our commodity price risk, a hypothetical 10% change in per ton resin prices would impact our future annual pre-tax earnings by approximately $19.4 million, assuming no compensating change in our selling prices.
With respect to our purchased energy price risk, a hypothetical 10% change in per unit prices would impact our future annual pre-tax earnings by approximately $6.0 million, assuming no compensating change in our selling prices.
With respect to our purchased energy price risk, a hypothetical 10% change in per unit prices would impact our future annual pre-tax earnings by approximately $6.3 million, assuming no compensating change in our selling prices.
With respect to our variable-rate debt outstanding at December 31, 2023, a 100 basis point increase in interest rates would result in a $2.6 million decrease to our future annual pre-tax earnings, taking into account the effect of the interest rate hedge transactions the Company has entered into as of December 31, 2023.
With respect to our variable-rate debt outstanding at December 31, 2024, a 100 basis point increase in interest rates would result in a $1.2 million decrease to our future annual pre-tax earnings, taking into account the effect of the interest rate hedge transactions the Company has entered into as of December 31, 2024.
These hypothetical gains or losses on foreign currency transactional exposures are based on the December 31, 2023 rates and the assumed rates.
These hypothetical gains or losses on foreign currency transactional exposures are based on the December 31, 2024 rates and the assumed rates.
With respect to our commodity price risk, a hypothetical 10% change in per ton wood pulp prices would impact our future annual pre-tax earnings by approximately $12.8 million, assuming no compensating change in our selling prices.
With respect to our commodity price risk, a hypothetical 10% change in per ton wood pulp prices would impact our future annual pre-tax earnings by approximately $14.1 million, assuming no compensating change in our selling prices.
Additionally, the per ton cost of wood pulp is cyclical in nature and more volatile than general inflation. During the period from January 2017 through December 2023, the U.S. list price of northern bleached softwood kraft pulp ("NBSK") a representative pulp grade that we use, ranged between $1,000 to $1,700 per ton.
Additionally, the per ton cost of wood pulp is cyclical in nature and more volatile than general inflation. During the period from January 2017 through December 2024, the U.S. list price of northern bleached softwood kraft pulp ("NBSK") a representative pulp grade that we use, ranged between $1,100 to $1,805 per ton.
In our ATM segment, we utilize a variety of commodity grade and specialty resins, including a selection of specialized high temperature engineering grade resins. Certain of these specialty resins are significantly more expensive than commodity grade resins. Resin prices fluctuate significantly and can impact profitability.
We utilize a variety of commodity grade and specialty resins, including a selection of specialized high temperature engineering grade resins. Certain of these specialty resins are significantly more expensive than commodity grade resins. Resin prices fluctuate significantly and can impact profitability.
As of December 31, 2023, a 10% unfavorable change in the exchange rate of our functional currencies and those of our subsidiaries against the prevailing market rates of non-local currencies involving our transactional exposures would have resulted in a net pre-tax loss of approximately $44.1 million.
As of December 31, 2024, a 10% unfavorable change in the exchange rate of our functional currencies and those of our subsidiaries against the prevailing market rates of non-local currencies involving our transactional exposures would have resulted in a net pre-tax loss of approximately $35.2 million.
Resin is the largest single component of raw material cost in the ATM segment and wood pulp is our largest single component of raw material cost in our FBS segment. The per pound price of resin is volatile and may impact the future results of our ATM segment.
Resin is the largest single component of raw material cost in the FAM segment and wood pulp is our largest single component of raw material cost in our SAS segment. The per pound price of resin is volatile and may impact the future results of our FAM segment.
As of December 31, 2023, 31.0% and 69.0% of the Company's total debt was fixed and floating interest rate debt, respectively. The Company has entered into a number of interest rate hedge transactions to convert floating rate debt to fixed. Refer to Note 15. Derivatives of the Notes to Consolidated Financial Statements for additional information.
As of December 31, 2024, 36.0% and 64.0% of the Company's total debt was fixed and floating interest rate debt, respectively. The Company has entered into a number of interest rate hedge transactions to convert floating rate debt to fixed. Refer to Note 14. Derivatives of the Notes to Consolidated Financial Statements for additional information.
Including the impact of these transactions, as of December 31, 2023, the percentage of the Company’s debt subject to fixed and floating rates of interest was 77.0% and 23.0%, respectively. 50 Commodity Price Risk We are subject to commodity price risks from our purchases of raw materials, including resin and wood pulp.
Including the impact of these transactions, as of December 31, 2024, the percentage of the Company’s debt subject to fixed and floating rates of interest was 89.0% and 11.0%, respectively. 49 Commodity Price Risk We are subject to commodity price risks from our purchases of raw materials, including resin and wood pulp.

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