Mativ Holdings, Inc.

On the call today from Mattis are Julie Chattel, Chief Executive Officer, Greg Weissel, Chief Financial Officer, and Chris Kupa, Director of Investor Relations. Today's call is being recorded and will be available for replay later this afternoon. At this time, all participants will be 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 one on your touchtone phone. If you need to remove yourself from the queue, please press the pound key. If you should require operator assistance, please press star zero. We ask that you please pick up your handset to allow optimal sound quality. It is now my pleasure to turn the call over to Mr. Chris Cooper. Sir, you may begin.

Good morning, everyone, and thank you for joining us for Matters first quarter 2024 earnings call. Before we begin, I'd like to remind you that comments included in today's conference call include forward-looking statements. Actual results may differ materially from these comments for reasons shown in 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 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 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 issued yesterday afternoon is available on our website at ir.mattis.com. With that, I'll turn the call over to Julie.

Thanks, Chris. Good morning, everyone, and thank you for joining our call. 2024 is off to a good start and I'm happy to report that our demand recovery is playing out as expected. We left you on our last earnings call with evidence of positive signs of demand momentum in many of our end markets and the expectation of a meaningful sequential step up in sales from Q4 to Q1. I'm pleased to confirm that sales in Q1 were $500 million which was up more than 10% sequentially from Q4, with volume increases across all product categories. While the sequential improvement in Q1 was encouraging, especially after more than a year of customer destocking and economic uncertainty, we are in what we believe to be the early days of demand recovery. And as you can see, our Q1 sales were down almost 9% year over year, comping a strong Q1 in 2023. What is motivating is that we have line of sight to continue demand momentum, which for the remainder of 2024 will drive positive sales. We also mentioned to you during our fourth quarter earnings call that lower fixed cost absorption and inefficiencies in some of our facilities in Q4 resulted in the production of higher cost inventory, and that selling through this inventory would have an impact on our bottom line in Q1. That higher cost inventory in combination with a slightly less favorable sales mix were the main drivers of our adjusted EBITDA for Q1 coming in at $46 million. Most of the impact on Q1 EBITDA is not reoccurring, and we expect meaningful adjusted EBITDA year-over-year improvement for the remainder of 2024. A few comments on why I'm optimistic about sales and EBITDA recovery this year. Throughout 2023, the combination of destocking, an uncertain macroeconomic environment, and geopolitical tensions created an unprecedented and unpredictable demand setting that drove continued negative manufacturing output across most industries and geographies in which we compete. This reduction in demand and the resulting manufacturing slowdown significantly impacted our operating leverage across our sites. We recognized this quickly and focused on those areas that we could control, taking action to navigate this unusual environment, including site and warehouse consolidation, operating staff reductions, accelerated synergies, and a restructuring effort that is expected to reduce our non-operating expenses by about $20 million as we exit this year. Those actions have been executed and will continue to deliver value to the bottom line throughout 2024. Let me touch on the organizational and segment restructuring that we announced during the quarter. Roughly 18 months into our merger, it was the right time to reevaluate our operating model and organizational alignment to reduce complexity, streamline our reporting structure, and further minimize our corporate overhead costs. This reorg also provides greater visibility and accountability for cross-category opportunities, enables faster decision-making, and leverages our customer-facing resources in a more efficient way. Our segments are aligned by product categories and with how we and our customers go to market. Our filtration and advanced material segments, or FAM, serves customers directly and focuses on filtration media and components, advanced films, coating and converting solutions, and extruded mesh products, such as nettings and spacers. Primarily driven by filtration and films, FAM supports a variety of end markets, such as water, air, and industrial process purification, transportation, agriculture, building and construction, and safety and security applications. Our Sustainable and Adhesive Solutions segment, or SAS, supplies customers through distribution as well as directly and focuses on tapes, labels, liners, specialty paper, packaging, and healthcare solutions. SAS serves end markets such as building and construction, infrastructure, athletics, consumer and medical packaging, commercial papers, personal care, and advanced healthcare applications. The FAM and SAS segment alignment leverages our manufacturing technologies and our customer-facing resources across complementary categories, making us easier to do business with and providing increased clarity of our portfolio of products and capabilities. It's the logical next step in achieving a one matter solution for our customers. These changes have already made us more agile and efficient internally and externally, and the customer response has been very positive. Also, as a reminder, during 2023, we divested our engineered papers business and right-sized our dividend to prioritize our use of cash on debt reduction. We consolidated our facility and warehousing footprint, reducing over 10 sites. We invested in new state-of-the-art assets in Germany and Mexico to support growing demand in filtration and release liners. And we delivered on our announced merger synergies. The overarching theme is that we have and will continue to make decisions and take actions that unlock both short and long-term value, and that the actions we took in 2023 set us up for success in 2024 and beyond. Turning to 2024, an important component of our EBITDA performance is price versus input cost and our ability to maintain a favorable spread between the two. Throughout 2023, our business was faced with record-level inflation and input costs and our commercial teams were successful in driving price to offset the impact. We believe that the value of the solutions we provide to our customers result in price stickiness that has historically allowed us to maintain a significant favorable spread between our pricing and the associated input costs. As a reminder, our team realized over $85 million in price increases last year And even as we are experiencing some decrease in input costs, we are confident in our ability to maintain a meaningful positive spread. Since volume growth is our top business priority, let me provide a few examples of how we are working to drive demand and some early wins we are seeing as a result. First, we are leveraging our FAMS segment's breadth of technologies to capture additional value and to simplify our customer supply chains. What I mean by this is that today we have customers that buy a base media, a top coat solution, and a pressure sensitive coating solution. And in many instances, they are buying these various layers from different suppliers. With our breadth of capabilities, we can provide the entire solution, which simplifies our customer supply chain, improves quality consistency, and enables us to become a bigger and better partner for our customers. We have two of our largest films customers that are engaged in qualifying and streamlining their supply chain with us, as well as a similar approach in filtration, where we can provide the base media, spacers, the separation membrane, tubing, and the pleatable mesh, all from one reliable partner and source. Again, this is our unique opportunity to make our customers' life easier and to increase our share of customers' minds and wallets. Secondly, in FAM, we were also recently awarded new reoccurring business for our proprietary UV reflective film that reduces heat absorption and increases the efficiency of equipment used in the aerospace industry. And finally, in FAM, turning to transportation filtration, We have a stronger project and innovation pipeline with our largest customers than we've had in the last five years and are experiencing both market growth and share gain opportunities. Relative to transportation filtration, volume is up over 5% year over year, and in our highest margin, highest efficacy product, it's up almost 10%, comping a strong Q1 last year. Turning to SAS, there are many instances where we are selling tape, medical packaging, and healthcare solutions to customers that have a specified release liner as part of their finished product. And sometimes it's not our release liner. So we're working with customers to transition the spec to our own as part of creating a more holistic supply chain solution. And while qualification can take 12 to 24 months, we have several projects underway and progressing nicely with large consumer product companies. Furthermore, our pipeline and SaaS for new account acquisition, new products, and cross-category sales has doubled in the last six months, and the team recently landed over $10 million of new business with a new customer in the specialty paper space that we've been working on for over a year. Those orders are starting now and ramping up throughout 2024. Lastly, in our consumer business, we've been awarded incremental featured placement at several large retail customers for the upcoming back to school season, as well as new permanent placement in the crafting segment at one of our largest retail customers, which is a new expansion space for us. While all these are specific and recent examples, I'm also encouraged by the many innovative products we are currently working on for a number of our customers, including sustainable wall coverings, additional coating solutions for aerospace applications, and filtration products that provide the highest mechanical efficacy for our customers using proprietary technologies that are new to market. With that, I'll turn it over to Greg for a more detailed discussion of our financial performance and then I'll provide some closing thoughts on our path forward.