Apologies for the technical difficulties, and welcome to Mativ's Third Quarter 2025 Earnings Conference Call. On the call today from Mativ are Shruti Singhal, Chief Executive Officer; Greg Weitzel, Chief Financial Officer; and Chris Kuepper, Director of Investor Relations. Today's call is being recorded and will be available for replay later this afternoon. [Operator Instructions] It is now my pleasure to turn the call over to Mr. Chris Kuepper. Sir, you may begin.

Good morning, everyone, and thank you for joining us for Mativ's Third Quarter 2025 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 metrics discussed during this call are non-GAAP financial metrics. Reconciliations of these metrics to the closest GAAP metrics 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 and the accompanying slide deck are available on our website at ir.mativ.com. With that, I'll turn the call over to Shruti.

Thanks, Chris. Good morning, everyone, and thank you for joining our call. I'm pleased to report that we delivered another quarter that exceeded our expectations with overall year-over-year improvement in our top line and bottom line results. On our last earnings call in August, we communicated our expectations for adjusted EBITDA to be 5% to 10% higher in Q3 year-over-year and for Q3 cash flow to be favorable as well versus prior year. As you saw in our Q3 earnings release, adjusted EBITDA came in 10% higher at the top end of that range, and we doubled free cash flow versus last year on a year-to-date basis. As a matter of fact, if you take both Q2 and Q3 together, this has been our strongest 6-month period since the merger on both an adjusted EBITDA and free cash flow basis, demonstrating that the decisions we made earlier this year are working and are delivering a step change to our financials at almost every level. On a consolidated basis, adjusted EBITDA of $66.8 million was up $6 million over Q3 of 2024, while sales of $513 million were up over 5% on an organic basis and 3% higher on a reported basis versus last year. This is a true testament to the strength and effectiveness of our sales force who are finding new and creative solutions to serve our customers with their unmet needs. Free cash flow came in at $66.7 million, which is $42 million higher year-over-year. Q3 free cash flow was also sequentially better by $17 million, making Q3 of 2025 now the second highest cash flow quarter since the merger. I'm very proud and energized by our global team's outstanding performance. While our demand environment continues to be challenging as tariffs and macroeconomic policies constantly change how we…

Thanks, Shruti and good morning, everyone. Consolidated net sales from continuing operations for the quarter were $513 million, up 3% compared to $498 million in the prior year on a reported basis and up $25 million or 5% on an organic basis as increases for both segments in volume mix and currency as well as SAS selling prices were partially offset by slightly unfavorable FAM selling prices. Adjusted EBITDA from continuing operations was $66.8 million, up 10% from $60.8 million in the prior year. Favorable net selling price versus input costs, higher organic volume and lower manufacturing costs represented a combined $8 million favorable impact, which was partially offset by a combined $2 million of higher distribution and SG&A costs. Price versus input cost performance turned positive for the quarter as communicated on the Q2 call and is expected to be favorable in Q4 as well. Adjusted EPS were $0.39 a share versus $0.21 a share in the prior year period. Turning to each of our segments. Net sales in our Filtration and Advanced Materials segment of $198 million were up 4% versus Q3 of 2024. The year-over-year increase was produced by higher volume mix and favorable currency translation, partially offset by lower selling prices. FAM adjusted EBITDA of $37 million increased slightly year-over-year, reflecting the effects of higher volume mix, partially offset by higher manufacturing costs. In our Sustainable and Adhesive Solutions segment, net sales of $315 million were up more than $16 million or 5% on an organic basis and increased by just over $6 million or 2% from last year on a reported basis. Organic growth was driven by higher volumes across key categories and higher selling prices across the segment, along with favorable currency translation. SAS adjusted EBITDA performance of $48 million increased 17% year-over-year from…

Thank you, Greg. What everyone should take away from this call is that we are proud of the progress we have made and the results we have delivered in Q3. The strength of our sales adjusted EBITDA and free cash flow performance, particularly over the past 6 months, demonstrates the effectiveness of our strategic decisions and the resilience of our business model. Our teams continue to execute with discipline and agility, driving commercial and operational excellence across both segments. While the macro environment remains dynamic, we are focused on the factors within our control, and we are taking proactive steps to position Mativ for long-term success. Our strategic priorities, as communicated last quarter, driving enhanced commercial execution, sharpening efforts to delever the balance sheet and conducting a strategic portfolio review have not changed and are front and center. Our company-wide pivot towards a higher sense of urgency and faster pace of execution are yielding measurable results and are solidifying the foundation for generating continued value for our customers, employees and shareholders. Thank you for joining us this morning. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Daniel Harriman with Sidoti.

Congrats on the quarter. I'll start out with two and then get back into the queue. But first, it's clear recently that the commercial actions within SAS are having a great effect on FAM and benefiting results there. And I'm just curious to hear more about the time line there and how long you think it will be until we see the full benefit of that commercial initiative? And then secondly, just curious, but I'm wondering if you can provide any additional updates or commentary on the ongoing portfolio review other than what you just mentioned in your prepared remarks.

Thanks, Dan, for your question and kind words. I really appreciate that. Regarding your first question on the actions against regarding FAM, we are starting to see the impact on those financials now. As you heard, year-on-year, quarter-on-quarter, we already have a 4% increase. This was the first quarter of growth in sales and adjusted EBITDA since the merger. So I'm really pleased with the progress we are making in FAM. Keep in mind that FAM is much more exposed to Europe and the automotive and transportation sectors there, which is, as you know, going through major demand challenges. But what the team has done as commercial actions, looking at our HVAC, air pollution segments as well as the water filtration segment, we have seen a great pipeline build and very good commercial execution with 20-plus percent growth in HVAC and air pollution, and 10% growth in water filtration. And we are also making meaningful progress overall in our films business towards -- and really starting to close the year-on-year comparison gap. We're regaining share back. We -- our customers for our premium segment are coming back. Our Asia business is very strong. So the change is already materializing, and we expect FAM to perform favorably in Q4 as well. In your second question regarding the strategic portfolio review. So as I said in my remarks, we are evaluating opportunities and constantly evaluate those opportunities to strengthen our go-to-market positioning. And as you know, we have been evaluating our portfolio ever since the merger, case in point, the EP divestiture about 1.5 years ago or so. I will certainly keep you updated on the progress and how we are doing. But be assured that the review is fully encompassing, meaning I talked about footprint rationalization. As a result, we closed our Wilson, North Carolina facility. That will be accretive to our EBITDA in 2026. I talked about reviewing our entire R&D portfolio. We optimized the portfolio and have repositioned our resources as well as our portfolio for near-term gains. We reduced complexity by our SKU rationalization, and we're delayering and making our business more effective and efficient. So this review remains a key part of my and the team's focus and the Board's focus, and we will absolutely keep you updated as we make further progress.

Our next question comes from Massimiliano Pilato from Stifel.

Congrats on the quarter. And part of them have already been answered during the prepared remarks, but could you please provide more detail on the relative organic performance in terms of volumes and pricing within the subsegments? And how do you see those growth rates evolve into Q4 and 2026 and level of visibility of demand into next year? And the second question is on the closure of North Carolina facility. I would like to understand if there are any associated costs with the closure? And if you could quantify the cost improvement into Q1 '26.

Maybe I'll kick it off first. Thank you, Massi, for that question -- those questions. Regarding the demand, what we saw in Q3, for example, our cable tapes business, especially with our -- again, with the end user markets and the Big Beautiful Bill helping us there, that demand was up. We saw our commercial print segment. We -- as I mentioned, with some of the -- with the massive retail chain, we got an increase there. We -- I already touched upon the water filtration, HVAC piece with the data centers growth, talked about released liners. If you -- the personal care and hygiene segment there has seen a good demand in Q3. And we also saw in our erosion control netting business, we're rewinning some of the volume back there. So those areas and some of the segments as examples where we've seen some good improvement in demand through the Q3. And on the Wilson closure, as I said, the -- it will be accretive to our EBITDA. And regarding the cost, maybe I'll let Greg take that one.

Yes. Yes. Overall, it represents less than 1% in sales overall. At the time of the closure, there will be -- we've already recognized some non-cash impairment charges in the current financials. There will be some onetime cash costs with the closure. But overall, yes, accretive to EBITDA and accretive to margins, and we should be seeing that flow through at the beginning of 2026.

Our next question comes from Lars Kjellberg with Stifel.

Great to see the good progress you're making. I'm curious about -- I mean you have obviously the new sort of commercial approach that is driving the best price cost relationship. But at the same time, you seem to be gaining share in the market, which is quite interesting because the market is generally quite soft. So can you sort of describe the mechanics here. What is making you win share in the market given the pricing policies that is driving the margin accretion that will be of interest and how those discussions go with your customers. The other thing with all the various things you're now doing and we're starting to see clearly the benefit of margin accretion, et cetera, coming through, how should you have us look on '26 as a whole in terms of compensating for underlying inflation, et cetera? And with the progress you've seen, should we see a continuation of that towards 25 -- sorry, towards your 15% ultimate target for margins into '26 and beyond?

Thank you, Lars, for those questions. Let me take the first one. Our commercial execution, I'm really proud of what our sales force is doing. We have really prioritized and focused on our growth initiatives. We have delayered for faster decision-making. And we're really focusing -- the sales force is really focused on the growth segments, some of those which I mentioned. And while having -- we've talked about in the past about cross-selling opportunities, and these are all being well supported by our operations excellence and supply chain excellence initiatives with better lead times, better service, our on-time shipment percentages are better. So when you take that full approach, we are -- that's how we are able to win in the marketplace and maintain pricing discipline. On the -- Greg, if you want to take the...

Yes, Lars, maybe I'll try to take the question on the margins and volume. Overall, as we're heading into the fourth quarter, we're expecting -- if you take out the currency impact because we're expecting to see a positive currency tailwind in sales again. Outside of that, I'd mentioned we would expect to see SAS volumes up some. But I do think we'll see much flatter volumes in Q4 year-over-year. But with what I shared in terms of expecting the bottom line EBITDA to be up by at least 10%, yes, it does play right into the increasing margins. The path to 15%, we still believe that is -- that we're in businesses that are -- that's the right target, the 15%. But the path there is somewhat gradual. We've seen the improvement from '23 to '24 to '25. We've definitely seen the improvement here in Q2 and Q3, but it will be a gradual path to the 15%. We'd expect margins in '26. We're not providing any specific guidance at this point, but we would expect to see a continuation of that trend of the improved margins in 2026.

We currently have no further questions. So I will hand back over to the management team for any closing remarks.

Thank you. First, I want to express my sincere gratitude to all the Mativ employees for their dedication and hard work in delivering our Q3 results. Thank you very much. And finally, thanks to all of you for joining us this morning for our earnings call. We look forward to staying connected in the coming months and to welcoming you to our next earnings call in February. Have a great day, everybody, and thank you for dialing in.

Thank you very much, everyone, for joining. That concludes today's call. You may now disconnect your lines.