Magnera Reports Third Quarter Results – Provides Updated Outlook

Core Insights - Magnera reported a strong financial performance for the third quarter of fiscal 2025, with net sales reaching $839 million, a 51% increase compared to $556 million in the same quarter of 2024 [3][4] - The company confirmed its original free cash flow guidance and adjusted EBITDA range, indicating confidence in its financial outlook despite challenging market conditions [1][2] Financial Performance - Net sales for the June quarter were $839 million, up 51% year-over-year, while year-to-date net sales reached $2,365 million, a 45% increase [3][4] - Adjusted EBITDA for the June quarter was $91 million, reflecting a 23% increase from $74 million in the same quarter of 2024, with year-to-date adjusted EBITDA at $264 million, up 22% [3][5] - The increase in net sales included $320 million from the Glatfelter merger, partially offset by a $7 million decrease in selling prices and a 5% organic volume decline due to market softness in Europe and competitive pressures in South America [4][6] Segment Performance - In the Americas segment, net sales increased by $124 million due to the Glatfelter merger, but were offset by decreased selling prices of $8 million and unfavorable foreign currency changes of $9 million [6][7] - The Rest of World segment saw a net sales increase of $196 million from the Glatfelter merger, with a $7 million favorable impact from foreign currency changes, but experienced a 3% organic volume decline attributed to market softness in Europe [8] Cash Flow and Debt - The company reported a post-merger adjusted free cash flow of $(13) million for the June quarter, with cash flow from operating activities at $7 million year-to-date [10] - Total debt stood at $1,999 million, with cash and cash equivalents of $276 million, resulting in total net debt of $1,723 million and a leverage ratio of 3.9x [10][20][21] Strategic Outlook - Magnera is focused on value creation opportunities through revenue acceleration via sales and innovation pipelines, executing its Capacity Optimization and Resource Efficiency program (Project CORE), and fulfilling synergy commitments [2][9] - The company emphasizes its commitment to strengthening credit metrics by paying down debt in the near term [9]