Mativ Holdings, Inc.

later this afternoon. At this time all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. If you would like to ask a question at that time please press star followed by 1 on your telephone keypad. If at any point your question has been answered you may remove yourself from the queue by pressing star followed by 2. If you would require operator assistance at any time please press star followed by 0. We ask that you please pick up your handset to allow optimal sound quality. It's now my pleasure to turn the floor over to Mr. Checker now. Sir, you may begin.

Good morning, everyone, and thank you for joining us to discuss Mattis' second quarter 2023 earnings results. Before we begin, I'd like to remind you that the comments included in today's conference call include forward-looking statements. Actual results may differ materially from the results suggested by these comments for a number of reasons. which are disclosed in more detail in our Securities and Exchange Commission filings, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Some of the financial measures discussed during this call are non-GAAP financial measures. Reconciliations of these measures to the closest GAAP measures are included in the appendix of this presentation and the earnings release. Unless stated otherwise, financial and operational metric comparisons are to the prior year period and relate to continuing operations. The earnings release is available on our website at ir.madif.com, as are the slides for today's presentation. You can download the slides and or click through these slides at your own pace during the call using the webcast interface. To remind you of how MADF results were reported and how we will be discussing them, recall that the SWM and NENA merger closed on July 6, 2022. Thus, the second quarter reported results reflect the combined company for the full However, the prior year results reflect only the legacy SWM results. On today's call, though, and in our earnings release, we will provide some comments referring to comparable performance to illustrate how our results compare to prior year periods on a like-for-like basis. These figures are shown in tables in our earnings release and the appendix of this presentation, as well as full reconciliations. With that, I'll turn the call over to Julie.

Thanks, Mark. Good morning, everyone, and thank you for joining today's call. Following our transformational announcement last week about our proposed EP divestiture, we're very pleased to report a solid second quarter consistent with our messaging in our last earnings call. As expected, Q2 results showed very strong sequential EBITDA improvement from the first quarter, with margins increasing substantially from better manufacturing performance, incremental cost reductions, and continued pricing discipline. Adjusted EBITDA of over $87 million in the second quarter compared to $66 million in the first quarter. This result was consistent with our message from the first quarter call when we detailed the impacts of the French strikes and some inefficiencies in other sites that we were already working to address. The sequential improvement in EBITDA from first quarter showed no lingering effects from the strikes and good progress on improving manufacturing performance, cost reductions, and continued synergy realization. Last year's second quarter was a high watermark for sales and EBITDA for the combined companies over the past few years, with EBITDA close to $100 million. and it was the last quarter that was not yet affected by destocking and the macroeconomic slowdown in manufacturing. With that as a backdrop, I'm pleased to report stable year-over-year margins despite volume headwinds. Importantly, this demonstrates that we are delivering on merger synergies, driving incremental cost reductions, and remaining disciplined in market pricing. Given the extent of the destocking and overall volume softness, we were pleased with the significant sequential EBITDA improvement in the second quarter and view this as a demonstration of improved execution on the aspects of the business most within our control. Relative to volume, the end markets most impacted by destocking and soft demand are those influenced by building and construction and premium consumer goods. many end markets and product lines in release liners, filtration, and healthcare remain resilient, though not completely insulated from destocking trends. And while customer destocking was heightened during Q2, we're focused on driving new and incremental business with new products, new geographies, and new customers. Let me highlight a few examples. We've invested in new release liner capacity in Mexico, which is expected to come online in Q4 of this year, supporting greater growth in North and South America. Release liner volume continues to lead in our portfolio with a decade of consistent and strong growth. We've gained share in our largest filtration category, transportation filtration, and we continue to have a robust new product pipeline with our large strategic customers. In addition, We've invested in new melt blown capacity expected to come online in 2024 to support growth in air and life science filtration. The combination of these new capacity additions provides the opportunity to continue to grow and add over $50 million of new revenue in the future. In protective solutions, we've launched a new optical film used in ballistic resistant materials for the military, law enforcement, buildings, and private vehicles. This is a project that's taken a few years to develop, test, and qualify. And we're excited about the launch this year and believe it will add over $10 million in new revenue over the next 12 months. Other key highlights in Q2 were price versus input costs remaining very positive and cash flow stepping up nicely from the first quarter. We are aggressively managing capital, including continued reduction in inventory levels throughout the year, and reduced capital spending as previously communicated. Looking to the second half of the year, visibility on volume remains a challenge, but we are very encouraged by our improved operational execution, disciplined pricing, and synergy delivery, as well as the initiatives in place to drive incremental demand through innovation, share gain, and customer expansion. This gives us confidence that as volumes rebound to higher levels, we should see excellent flow through and margins with leaner operations and improved cost positions across our business. Turning to the next slide, consistent with the first quarter, the key themes remain price, cost, and synergies as key positives, and destocking and lower volume impacts as the counterbalance. However, I'm pleased to say the manufacturing costs and inefficiency issues we discussed in May have been largely resolved. For price costs, we had about $25 million of net favorability, continuing our strong performance in this area. Price increases have proven successful in offsetting inflation and remain largely intact. highlighting the value our specialty materials bring to the markets we serve. As signaled during our last call, we expect to start to lapse some large year-over-year pricing gains in the second half, and as easing input costs work their way through the P&L, we expect to maintain a positive price-cost spread. Importantly, the strong price-cost performance was seen in both ATM and FBS. Shifting to synergies, we are one year into the merger and one of the key targets we originally outlined was the execution of half of the $65 million synergy plan within 12 months. We're pleased to say we have achieved that goal and continue to push the team to accelerate synergy execution as well as find upsides to the total program target. Synergy delivery has been a key action within our control that is helping to offset the challenges the global economy has presented over the past year. Most of the synergies realized to date have been in SG&A, and you can see that in our reduced level of unallocated corporate expenses. Thus far in 2023, the teams have done a great job executing supply chain and procurement synergies, which will amplify in the second half of the year and with even more significant realization in 2024. This includes contract restatements, expanded supplier agreements, and optimized supplier rosters for a number of our shared materials and services. To reiterate the timing of the bottom line read-through of the $65 million of synergies, we achieved about $5 million in the back half of 2022. We expect $25 million in both 2023 and 2024, and then the remaining 10 million hitting the P&L in the first half of 2025. Although the current pressures of destocking and volume are limiting the visibility of synergies, we believe these actions will be a driving force behind achieving our long-term margin goals. Moving to destocking, this remains the most pressing and widespread challenge in the end markets and value chains in which we operate. Overall market demand remains challenged and difficult to predict, and while we were encouraged by some customer indications that the stocking is mostly behind us, overall volumes remain under pressure. In this environment, it is even more important that we focus on those areas within our control, and that includes cost performance, pricing, and driving incremental demand. Moving to manufacturing, we're pleased to have no material impact from the French strikes, which had a large impact on first quarter results. We've also addressed the inefficiencies at several sites as we settled into more stable schedules and with an increased focus on temporary cost reduction actions. Our internal ops excellence program called Impact has pivoted to be very focused and targeted on key sites and is delivering solid results in improved yields, productivity, and waste reductions. Last call, we spoke about $10 million of quarterly cost-out actions, primarily driven by operational staffing and improved manufacturing performance. We executed on these efforts, which partially mitigate the volume softness. Simply put, we remain committed to continued cost-out actions to preserve margins, The results of these are evident in our strong sequential EBITDA margin improvement. With that, I'll turn it over to Greg to review the quarter's financials.