| --- | --- | --- | |----------------------------------------------------------------------------------------------|-------|-------| | | | | | | | | | Mercer International Inc. Transforming biomass into bioproducts for a more sustainable world | | | | Q3 2024 Earnings Call November 1, 2024 | | | | Juan Carlos Bueno – President & CEO Richard Short – CFO, Executive VP & Secretary | | | | | | | Forward-looking Statements The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File No.: 000-51826 MERCER INTERNATIONAL INC. (Exact name of Registrant as specified in its charter) Washington 47-0956945 (State or ot ...

Revenue Performance - Total revenues increased to approximately $502.1 million in Q3 2024 from $470.8 million in Q3 2023[11] - Total revenues increased to approximately $1,555.0 million in the nine months ended September 30, 2024 from $1,523.4 million in the same period of 2023[12] Operating Income and EBITDA - Operating income was approximately $8.8 million in Q3 2024, compared to an operating loss of $3.4 million in Q3 2023[11] - Operating EBITDA was approximately $50.5 million in Q3 2024, compared to $37.5 million in Q3 2023[11] - Operating EBITDA was approximately $144.5 million in the nine months ended September 30, 2024, compared to negative Operating EBITDA of $3.7 million in the same period of 2023[12] - Operating EBITDA for the three months ended September 30, 2024, is preliminarily estimated at $50.5 million, up from $37.5 million in the same period in 2023[16] - Operating EBITDA for the nine months ended September 30, 2024, is preliminarily estimated at $144.5 million, compared to a loss of $3.7 million in the same period in 2023[16] Net Loss - Net loss was approximately $17.6 million in Q3 2024, compared to $26.0 million in Q3 2023[11] - Net loss was approximately $101.8 million in the nine months ended September 30, 2024, compared to $154.8 million in the same period of 2023[12] - Preliminary net loss for the three months ended September 30, 2024, is estimated at $17.6 million, compared to $26.0 million in the same period in 2023[16] - Preliminary net loss for the nine months ended September 30, 2024, is estimated at $101.8 million, compared to $154.8 million in the same period in 2023[16] Cash and Debt Position - Cash and cash equivalents were approximately $239.0 million as of September 30, 2024, compared to $314.0 million at the end of 2023[13] - Long-term debt was approximately $1,597.9 million as of September 30, 2024, compared to $1,609.4 million at the end of 2023[13] - Aggregate liquidity was $554.2 million as of September 30, 2024, including $315.2 million availability under credit facilities[13] Debt Redemption Plans - The company plans to redeem $300 million in principal amount of the 2026 Senior Notes, which bear interest at 5.500% per annum[18] - The 2026 Note Redemption will be conditioned upon the closing of the offering, with a redemption price of $1,000.00 per $1,000.00 in principal amount plus accrued and unpaid interest[18]

Core Insights - Mercer International Inc. reported a 35% increase in Operating EBITDA to $50.5 million for Q3 2024, compared to $37.5 million in Q3 2023, despite a net loss of $17.6 million [1][2][13] - The company experienced strong softwood pulp market conditions, although production was affected by unplanned downtime at the Peace River mill [3][5] - A quarterly cash dividend of $0.075 per share was announced, to be paid on December 26, 2024 [35] Financial Performance - Total revenues for Q3 2024 increased by approximately 7% to $502.1 million from $470.8 million in Q3 2023, driven by higher pulp and manufactured products sales realizations [11][30] - Operating income for Q3 2024 was $8.8 million, a significant improvement from a loss of $3.4 million in Q3 2023 [11][43] - The net loss for Q3 2024 was $17.6 million, an improvement from a net loss of $26.0 million in Q3 2023 [2][43] Pulp Segment Insights - Pulp revenues increased by approximately 11% to $354.2 million in Q3 2024 from $318.1 million in Q3 2023, primarily due to higher sales realizations [15][16] - Average NBSK pulp sales realizations rose by approximately 22% to $814 per ADMT in Q3 2024 from $666 per ADMT in Q3 2023 [16] - Total pulp production decreased by approximately 13% to 415,837 ADMTs in Q3 2024 compared to 479,924 ADMTs in Q3 2023, largely due to unplanned downtime [19] Solid Wood Segment Insights - Solid wood segment revenues increased by approximately 5% to $125.1 million in Q3 2024 from $119.5 million in Q3 2023, driven by higher manufactured products revenues [23] - The operating loss for the solid wood segment improved to $14.7 million in Q3 2024 from $19.7 million in Q3 2023 [22] - Manufactured products revenues surged by approximately 71% to $35.8 million in Q3 2024 from $20.9 million in Q3 2023, reflecting strong growth in the mass timber business [26] Market Conditions - Softwood pulp prices remained at historically high levels in North America and Europe, with positive pricing momentum observed in China towards the end of Q3 2024 [5][6] - Hardwood pulp prices in China decreased in Q3 2024 but are expected to stabilize in Q4 2024 [6] - Lumber sales realizations decreased slightly in Q3 2024 compared to Q2 2024, but moderate increments in lumber prices are anticipated in Q4 2024 [6][29] Debt and Liquidity - The company successfully refinanced $300 million of 2026 Senior Notes, reducing long-term debt by $100 million and extending maturity to 2028 [8] - As of September 30, 2024, the company had cash and cash equivalents of $239.0 million and total liquidity of approximately $554.2 million [34]

NEW YORK, Oct. 30, 2024 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) (the "Company") today announced that it has completed its previously announced private offering of $200.0 million aggregate principal amount of 12.875% senior notes due October 1, 2028 (the "Additional Notes"). The Additional Notes were issued at a price of 103.000% of their principal amount, plus accrued interest from October 1, 2024, for a yield to worst of 11.624%. The Additional Notes were issued as additional notes und ...

Core Viewpoint - Mercer International Inc. announced a private offering of $200 million in 12.875% senior notes due October 1, 2028, to redeem $300 million of its existing 5.500% senior notes due 2026 [1][4]. Group 1: Offering Details - The Additional Notes are priced at 103.000% of their principal amount, yielding 11.624% [1]. - The offering is expected to close on or around October 30, 2024, subject to customary closing conditions [3]. Group 2: Existing Notes - The Additional Notes are being issued under an existing indenture from September 21, 2023, which previously included $200 million of the same senior notes [2]. Group 3: Company Overview - Mercer International Inc. operates in the forest products industry with a consolidated annual production capacity of 2.1 million tonnes of pulp, 960 million board feet of lumber, 210,000 cubic meters of cross-laminated timber, 45,000 cubic meters of glulam, 17 million pallets, and 230,000 metric tonnes of biofuels [4].

NEW YORK, Oct. 21, 2024 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) (the "Company") today announced that it intends to offer for sale (the "Offering") $200 million in aggregate principal amount of its senior notes due October 1, 2028 (the "Additional Notes"). The Additional Notes will be issued as additional notes under an existing indenture dated September 21, 2023, pursuant to which the Company previously issued $200.0 million aggregate principal of 12.875% senior notes due 2028 (the "Exi ...

Core Viewpoint - Mercer International Inc. reported preliminary financial results for Q3 2024, showing an increase in revenues but continued net losses due to operational challenges [1][2]. Financial Performance - Revenues for Q3 2024 were $502.1 million, up from $499.4 million in Q2 2024 and $470.8 million in Q3 2023 [2]. - Operating income for Q3 2024 was $8.8 million, a significant improvement from a loss of $43.8 million in Q2 2024 and a loss of $3.4 million in Q3 2023 [2]. - Operating EBITDA for Q3 2024 was $50.5 million, compared to $30.4 million in Q2 2024 and $37.5 million in Q3 2023 [2][17]. - The net loss for Q3 2024 was $17.6 million, an improvement from a loss of $67.6 million in Q2 2024 and a loss of $26.0 million in Q3 2023 [2]. Liquidity Position - As of September 30, 2024, the company had cash and cash equivalents of approximately $239 million and $315 million available under revolving credit facilities, totaling about $554 million in aggregate liquidity [3]. Operational Challenges - The company faced operational constraints due to unscheduled downtimes at its mills, including 23 days at the Mercer Peace River mill and other production issues at the Stendal and Celgar mills, impacting overall pulp production [4][5]. - The company managed to reduce downtime at the Mercer Peace River mill to about 12 days for Q4 2024, with no further downtime planned [5]. Market Environment - As of September 30, 2024, NBSK list prices in Europe and North America were approximately $1,535 per ADMT and $1,735 per ADMT, respectively, showing significant increases from $1,160 and $1,270 per ADMT in the previous year [6]. - NBSK net prices in China were approximately $754 per ADMT, up from $715 per ADMT a year earlier [6]. - U.S. benchmark lumber prices for Western SPF No. 2 and better were approximately $390 per Mfbm, down from $407 per Mfbm in the previous year [7]. Upcoming Events - The company will report its full financial results for Q3 2024 on October 31, 2024, with a conference call scheduled for November 1, 2024, to discuss the results [9][10].

Group 1: Company Operations - Mercer International Inc. (MERC) has suspended operations at its Peace River mill for repairs due to a mechanical failure of the digester [1] - The company anticipates a decrease in hardwood pulp (NBHK) production by approximately 45,000 tons until operations resume, with repairs expected to be completed by mid-October 2024 [2] - The Peace River mill, operational since 1990, produces both softwood (NBSK) and hardwood pulp, and supplies surplus electricity to the Alberta market [3] Group 2: Forest Management and Resources - Peace River holds long-term forest management agreements in Alberta, allowing for the annual harvest of about 2.9 million cubic meters of hardwood and 375,000 cubic meters of softwood, with current utilization at about 44% of its hardwood allowance [4] Group 3: Financial Performance - In Q2 2024, Mercer reported an adjusted loss of $0.50 per share, an improvement from an adjusted loss of $1.48 in the same quarter the previous year, with total revenues declining by 6% year over year to $499 million [5] - The decline in revenues was attributed to lower pulp and lumber sales volumes, although this was partially offset by higher pulp sales realizations and revenues from manufactured products [5] Group 4: Stock Performance - Mercer's share price has decreased by 22.3% over the past year, contrasting with a 29.9% growth in the industry [6]

NEW YORK, Sept. 25, 2024 (GLOBE NEWSWIRE) -- Mercer International Inc. ("Mercer" or the "Company") (Nasdaq: MERC) announced today that its Peace River mill has taken downtime to complete necessary repairs to the mill's digester after experiencing a mechanical failure. The Company currently expects the repairs and related assessments will be completed in mid-October 2024, and anticipates that NBHK production at the mill will be reduced by approximately 45,000 tonnes during such period. The Company maintains ...