Business Context and Reporting Period
Mativ Holdings, Inc. filed this Form 8-K on May 8, 2024, to disclose an organizational realignment effective in the first quarter of 2024. The Company restructured its operations into two new reportable segments: (1) Filtration & Advanced Materials ("FAM") and (2) Sustainable & Adhesive Solutions ("SAS"). This filing provides supplemental Non-GAAP financial information for the three-month periods ended March 31, June 30, September 30, and December 31, 2023, and the twelve-month period ended December 31, 2023, restated to reflect the new segment structure.
Key Financial Metrics
The following table summarizes the Non-GAAP financial performance for the twelve months ended December 31, 2023, based on the realigned segment reporting (in millions, except percentages):
| Metric | FAM Segment | SAS Segment | Corporate Unallocated | Consolidated |
|---|---|---|---|---|
| Net Sales | $810.0 | $1,216.0 | N/A | $2,026.0 |
| GAAP Operating Profit (Loss) | $99.4 | $(376.2) | $(137.1) | $(413.9) |
| Adjusted Operating Profit (Loss) | $135.9 | $75.8 | $(88.4) | $123.3 |
| Adjusted Operating Margin | 16.8% | 6.2% | (4.4%) | 6.1% |
| Adjusted EBITDA | $163.6 | $130.7 | $(80.9) | $213.4 |
| Adjusted EBITDA Margin | 20.2% | 10.7% | (4.0%) | 10.5% |
Note: The filing does not provide specific GAAP cash flow, debt, or liquidity metrics for the reporting period; it focuses on segment operating performance reconciliations.
Material Changes and Unusual Items
The most significant material change is the $401.0 million goodwill impairment recorded in the SAS segment during the quarter ended September 30, 2023. This impairment caused the SAS segment to report a GAAP operating loss of $(405.8) million for that quarter, compared to positive GAAP operating profits in other quarters of 2023.
Other unusual items excluded from Adjusted Operating Profit include:
- Restructuring, restructuring-related, and other impairment expenses totaling $26.6 million for the full year 2023.
- Acquisition, merger, and integration costs of $32.4 million for the full year 2023.
- Divestiture costs of $10.3 million for the full year 2023, related to the previously completed sale of the Engineered Papers business.
- Amortization of intangibles and other purchase accounting adjustments totaling $62.4 million for the full year 2023.
Guidance, Outlook, and Management Commentary
This filing does not contain forward-looking guidance, revenue outlook, or specific management commentary regarding future performance. The primary purpose of the document is to provide historical supplemental financial data that aligns with the new segment structure to enhance shareholder evaluation of operating performance. Management states that the Non-GAAP measures provide insight into the financial and operational performance used for internal decision-making.
Investor Verification Checklist
- Segment Realignment: Verify how the new FAM and SAS segments map to previous reporting structures to ensure accurate year-over-year comparisons.
- Goodwill Impairment: Review the details of the $401.0 million goodwill impairment in the SAS segment to understand the specific assets affected and the valuation methodology used.
- Non-GAAP Reconciliations: Examine the reconciliation of Adjusted Operating Profit and Adjusted EBITDA to GAAP measures to assess the magnitude of excluded items like restructuring and integration costs.
- Discontinued Operations: Confirm the treatment of the Engineered Papers (EP) business as discontinued operations and ensure prior period data is viewed on a comparable basis excluding EP.
- Corporate Costs: Analyze the Corporate Unallocated segment, which reported an Adjusted Operating Loss of $88.4 million for the year, to understand the overhead burden relative to segment profitability.