What Mativ (MATV) Said on Its Q3 Earnings Call

Key Points

• Q3 results were hurt by a July tornado: Sales fell nearly 3% to $500 million and adjusted EBITDA declined 7% to $62 million. The storm reduced sales by an estimated $20 million to $25 million and added distribution costs.
• Advanced materials provided a growth offset: Filtration & Advanced Materials sales rose more than 11% organically and adjusted EBITDA increased 20%, led by films and filtration products. Commercial-space films moved into standard production, with growth expected to scale in 2027.
• Management expects Q4 volume growth but lower adjusted EBITDA: Volumes are forecast to grow in both segments, but tariffs, storm-related distribution inefficiencies and healthcare destocking are expected to drive a low-single-digit percentage EBITDA decline year over year. Net debt was $879 million, and Mativ continues to target leverage within its 2.5-to-3.5-times range by mid-2027.

Mativ NYSE: MATV reported lower third-quarter sales and adjusted earnings after a tornado disrupted its paper and packaging distribution network, offsetting growth in its advanced materials business. Executives said they expect sales volumes to grow in both operating segments in the fourth quarter, although storm-related costs and tariffs are likely to weigh on earnings.

Net sales fell nearly 3% from a year earlier to $500 million in the third quarter of 2026, while organic sales declined more than 2%. Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, fell 7% to $62 million. The adjusted EBITDA margin declined 50 basis points to 12.5%.

Chief Financial Officer Scott Minder said the July tornado’s impact on third-quarter sales was between $20 million and $25 million, in line with the company’s previous expectations. Management said adjusted EBITDA would have grown year over year without the storm’s impact.

Advanced materials growth offsets part of the disruption

The Filtration & Advanced Materials segment, known as FAM, posted net sales of $219 million, up more than 10% on a reported basis and more than 11% organically. Adjusted EBITDA rose 20% to $40 million, and the segment’s margin expanded by 150 basis points to 18.1%.

President and CEO Shruti Singhal said growth was led by films, along with industrial and aftermarket transportation filtration. Specialty films revenue focused on commercial space rose more than 30% year over year, he said.

Singhal said materials supplied to a commercial space launch provider moved from customer qualification to commercial use during the quarter. The films are now used in standard production runs, and Mativ expects the business to scale in 2027 as the customer increases its launch frequency.

Minder said higher-margin commercial space films, aftermarket automotive filtration and automotive films grew faster than other parts of the FAM portfolio. He expects those growth drivers to remain in place in the fourth quarter, although the benefit from pricing relative to input costs is expected to taper as costs catch up.

Tornado and tariffs pressure SAS

Sales in Sustainable & Adhesive Solutions, or SAS, fell more than 10% to $281 million, while adjusted EBITDA declined 25% to $33 million. Minder attributed the sales decline primarily to the tornado, customer inventory destocking in healthcare and Canadian tariffs affecting some tape exports to the U.S.

The tornado struck Mativ’s primary third-party distribution center in Menasha, Wisconsin, destroying most of its paper and packaging inventory. The company shifted distribution to three interim warehouses, adding transportation and handling costs. Singhal said shipments resumed within 72 hours and that Mativ did not lose any customers.

Minder said the tornado accounted for more than half of SAS’s year-over-year adjusted EBITDA decline, including lost contribution from sales and additional logistics costs. Mativ expects to largely recover the lost sales over the next couple of quarters, including the fourth quarter.

The company expects full insurance reimbursement for damaged inventory and is pursuing a separate business interruption claim for additional storm-related costs, Minder said. Distribution inefficiencies are expected to remain a near-term expense as Mativ works on a permanent solution.

Singhal said a 50% tariff applies to finished cable and construction tapes exported from Mativ’s Renfrew, Ontario, facility to the U.S. The exposure represents approximately 2% of consolidated annual revenue. The company is working with customers and suppliers to limit the impact and has identified potential longer-term measures, including alternative sourcing and price increases.

Fourth-quarter outlook and debt reduction

Mativ expects year-over-year organic volume growth in both segments in the fourth quarter, supported by advanced films, filtration and a recovery in paper and packaging. Healthcare destocking is expected to continue through year-end, with ordering patterns normalizing in early 2027.

Despite the expected volume growth, Minder forecast a low-single-digit percentage decline in fourth-quarter adjusted EBITDA from a year earlier. He cited tariffs, ongoing distribution inefficiencies and an unfavorable mix from healthcare destocking. The company nevertheless expects full-year revenue, earnings and cash generation to exceed 2025 levels.

For the first nine months of 2026, adjusted EBITDA rose 8% to $185 million, and free cash flow increased 5% to $90 million. Third-quarter free cash flow was $38 million, down $29 million from a year earlier.

Net debt stood at $879 million at quarter-end, down 6% year over year, while net leverage under Mativ’s credit agreement was 3.8 times. Minder said the company continues to expect leverage to reach the upper end of its 2.5-to-3.5-times target range by mid-2027. Mativ also sold its previously closed Appleton, Wisconsin, facility for approximately $7 million in early November; the transaction will be reflected in fourth-quarter results.

About Mativ (NYSE:MATV)

Mativ Inc NYSE: MATV is a global manufacturer of specialty materials and engineered solutions. The company develops and produces materials used in filtration, healthcare, hygiene, food and beverage, industrial, packaging, and other specialized applications.

Its products include filtration media and components, engineered papers and nonwoven materials, release liners, protective and medical materials, and other performance-oriented substrates. Mativ's solutions are designed to provide properties such as filtration, barrier protection, absorbency, strength, and durability for use in consumer and industrial products.

The company was formed in 2022 through the merger of Schweitzer-Mauduit International and Neenah, combining their specialty materials businesses.

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