Mativ Q3 2026 Earnings: Tornado-Driven SAS Weakness Offset FAM Growth

Mativ Holdings (NYSE: MATV) reported Q3 2026 revenue of $499.5 million, down 2.8% year over year, while GAAP diluted EPS improved to a loss of $0.03 from a loss of $0.06. The July tornado in Wisconsin weighed on Sustainable & Adhesive Solutions, more than offsetting double-digit growth in Filtration & Advanced Materials, and consolidated adjusted EBITDA declined 7% to $62.3 million. Year-to-date operating cash flow still increased to $117.4 million.

Core Results

Sales declined 2.3% on an organic basis, with Mativ identifying the tornado-related disruption as the primary reason. Although adjusted EBITDA decreased, lower restructuring and impairment costs helped operating profit rise 24.4%, while the GAAP net loss narrowed to $1.2 million.

Adjusted income was $17.5 million, or $0.31 per share. The difference from GAAP EPS primarily reflected $0.26 per share of purchase accounting expenses and $0.08 per share of restructuring, related, and impairment expenses.

Business and Segment Performance

Mativ’s two operating segments moved in opposite directions. FAM delivered double-digit sales growth and margin expansion, but the larger SAS segment was disrupted by the tornado and recorded lower sales, adjusted EBITDA, and margins.

FAM benefited from higher volume and mix, including the effect of an exited facility, as well as higher selling prices. Favorable price-versus-cost performance helped offset higher manufacturing costs. Its GAAP gross margin expanded to 23.6% from 21.4%.

SAS was affected primarily by the tornado’s impact on the Paper & Packaging business. Lower volume and mix, including weakness in Healthcare, and unfavorable currency also reduced sales, partly offset by higher prices. Higher distribution expenses contributed to the segment’s EBITDA decline, while its GAAP gross margin fell to 16.4% from 18.0%.

Unallocated adjusted EBITDA costs increased slightly to $9.9 million from $9.4 million.

Lower Restructuring and Other Expenses Improved GAAP Results as Adjusted EBITDA Declined

The quarter’s GAAP and adjusted results moved in different directions. Adjusted EBITDA fell 7% as the tornado-related SAS weakness outweighed FAM growth, but GAAP operating profit increased because restructuring and other impairment expense decreased to $2.7 million from $8.1 million.

Other expense also improved to $0.4 million from $3.9 million, primarily because the prior-year period included pension costs and foreign currency losses. These benefits were partly offset by interest expense of $18.1 million, up from $17.7 million due mainly to higher average rates on floating-rate debt.

Mativ recorded $2.6 million of tax expense despite generating only $1.4 million of pretax income. The resulting 185.7% tax rate reflected the geographic mix of earnings and the company’s inability to recognize benefits from losses in jurisdictions with full valuation allowances.

Cash Flow and Balance Sheet

For the nine months ended September 30, 2026, operating cash flow increased 3% to $117.4 million. After $26.9 million of capital spending, free cash flow was $90.5 million, up 5% year over year.

Working capital provided $11.9 million of cash, mainly because of increases in accounts payable, other current liabilities, and accrued income taxes. Increases in accounts receivable and inventories partly offset those sources.

At quarter-end, total debt was $976.4 million, down $52.5 million year over year. Cash and cash equivalents totaled $97.3 million, resulting in net debt of $879.1 million. Total liquidity was approximately $373.5 million, including $276.2 million of available revolver capacity, and debt maturities are staggered through 2033.

Mativ also declared a quarterly dividend of $0.10 per share, payable on December 18, 2026, to shareholders of record on November 27.

Management Commentary

CEO Shruti Singhal said the tornado recovery remained on plan and that Mativ expected the associated inventory losses to be fully recoverable. Management also said the company had been positioned to generate year-over-year adjusted EBITDA growth before the operational disruption.

The company expressed confidence that full-year financial performance would exceed the prior year, supported by cash generation and ongoing recovery efforts. It did not attach a quantitative range to that outlook in the release.

Risks Investors Should Monitor

• Tornado recovery: Continued operational disruption in Wisconsin could prolong pressure on SAS sales, production, and margins.
• SAS volume and mix: Lower volume and mix, including in Healthcare, added to the segment’s decline beyond the direct tornado impact.
• Manufacturing and distribution costs: Higher manufacturing costs affected FAM, while higher distribution expenses weighed on SAS profitability.
• Debt and floating interest rates: Mativ carried $976.4 million of debt, and higher rates on its floating-rate exposure increased quarterly interest expense.
• Tax volatility: Geographic earnings mix and valuation allowances prevented Mativ from benefiting from some jurisdictional losses, producing a high effective tax rate.

Summary

Mativ’s Q3 2026 results reflected a sharp split between growing FAM operations and tornado-affected SAS performance. Lower restructuring and other expenses improved GAAP earnings even as adjusted EBITDA declined, while year-to-date cash flow and debt reduction provided balance-sheet support. The main follow-up issues are the pace of SAS recovery, the sustainability of FAM growth, and the company’s ability to contain operating, interest, and tax pressures.