Magnera Corp (MAGN)
SIC breadcrumb: Manufacturing > SIC Major Group 26 > SIC 2621 Paper Mills
SEC company page: https://www.sec.gov/edgar/browse/?CIK=41719. Latest filing source: 0000041719-25-000110.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 3,204,000,000 | USD | 2025 | 2025-11-25 |
| Net income | -159,000,000 | USD | 2025 | 2025-11-25 |
| Assets | 3,989,000,000 | USD | 2025 | 2025-11-25 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-11-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000041719.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 2,275,000,000 | 2,187,000,000 | 3,204,000,000 | |||||||
| Net income | 21,554,000 | 7,914,000 | -177,604,000 | -21,541,000 | 21,298,000 | 6,937,000 | -194,208,000 | 38,000,000 | -154,000,000 | -159,000,000 |
| Operating income | -21,520,000 | 33,252,000 | 21,942,000 | 54,635,000 | 49,156,000 | 28,614,000 | -163,951,000 | 69,000,000 | -141,000,000 | 5,000,000 |
| Diluted EPS | 0.49 | 0.18 | -4.06 | -0.49 | 0.48 | 0.15 | -4.33 | 1.19 | -4.84 | -4.47 |
| Operating cash flow | 31,078,000 | 53,234,000 | -5,952,000 | 102,835,000 | 108,993,000 | 70,977,000 | -40,820,000 | 257,000,000 | 192,000,000 | 103,000,000 |
| Capital expenditures | 61,162,000 | 80,783,000 | 42,129,000 | 27,765,000 | 28,136,000 | 30,037,000 | 37,740,000 | 88,000,000 | 72,000,000 | 67,000,000 |
| Assets | 1,521,259,000 | 1,730,795,000 | 1,339,754,000 | 1,283,794,000 | 1,286,881,000 | 1,880,607,000 | 1,647,353,000 | 1,563,796,000 | 2,807,000,000 | 3,989,000,000 |
| Liabilities | 867,433,000 | 1,021,867,000 | 800,856,000 | 727,835,000 | 708,949,000 | 1,337,845,000 | 1,329,349,000 | 1,306,942,000 | 668,000,000 | 2,925,000,000 |
| Stockholders' equity | 653,826,000 | 708,928,000 | 538,898,000 | 555,959,000 | 577,932,000 | 542,762,000 | 318,004,000 | 256,854,000 | 2,139,000,000 | 1,064,000,000 |
| Cash and cash equivalents | 55,444,000 | 116,219,000 | 142,685,000 | 126,201,000 | 99,581,000 | 138,436,000 | 110,660,000 | 50,265,000 | 230,000,000 | 305,000,000 |
| Free cash flow | -30,084,000 | -27,549,000 | -48,081,000 | 75,070,000 | 80,857,000 | 40,940,000 | -78,560,000 | 169,000,000 | 120,000,000 | 36,000,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 1.67% | -7.04% | -4.96% | |||||||
| Operating margin | 3.03% | -6.45% | 0.16% | |||||||
| Return on equity | 3.30% | 1.12% | -32.96% | -3.87% | 3.69% | 1.28% | -61.07% | 14.79% | -7.20% | -14.94% |
| Return on assets | 1.42% | 0.46% | -13.26% | -1.68% | 1.66% | 0.37% | -11.79% | 2.43% | -5.49% | -3.99% |
| Liabilities / equity | 1.33 | 1.44 | 1.49 | 1.31 | 1.23 | 2.46 | 4.18 | 5.09 | 0.31 | 2.75 |
| Current ratio | 1.53 | 1.68 | 2.02 | 2.07 | 1.94 | 1.72 | 1.89 | 2.16 | 1.94 | 2.37 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000041719.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2018-Q1 | 2018-03-31 | 410,647,000 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | -1.11 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | -0.30 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | -36,940,000 | -0.83 | reported discrete quarter | |
| 2023-Q3 | 2023-09-30 | -19,863,000 | -0.43 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | -8,666,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2024-Q1 | 2024-03-31 | -26,347,000 | -0.58 | reported discrete quarter | |
| 2024-Q2 | 2024-06-30 | -16,279,000 | -0.37 | reported discrete quarter | |
| 2024-Q3 | 2024-09-30 | -15,247,000 | -0.33 | reported discrete quarter | |
| 2025-Q1 | 2024-12-28 | -60,000,000 | -1.69 | reported discrete quarter | |
| 2025-Q2 | 2025-03-29 | -41,000,000 | -1.15 | reported discrete quarter | |
| 2025-Q3 | 2025-06-28 | -18,000,000 | -0.51 | reported discrete quarter | |
| 2025-Q4 | 2025-09-27 | -40,000,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2026-Q1 | 2025-12-27 | 792,000,000 | -34,000,000 | -0.95 | reported discrete quarter |
| 2026-Q2 | 2026-03-28 | 796,000,000 | -18,000,000 | -0.50 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0000041719-26-000042.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Summary
Business. The Company’s operations are organized into two
operating and reportable segments: Americas and Rest of World. The structure is
designed to align us with our customers, provide improved service, enable
future growth initiatives and efficiency of decision making to facilitate
synergy realization. The Americas segment consists of sites in North America and South America that manufacture a wide range of products and components of personal care and consumer solution products and components of products including medical garments, wipes, dryer sheets, filtration, baby diapers and adult incontinence. The Rest of World segment consists of sites throughout Europe and China that manufacture a broad collection of personal care and consumer solution products and components of products including tea bags, coffee filters, wipes, cable wrap, filtration, baby diapers and adult incontinence.
Raw Material Trends. Our primary raw materials are polymer resin,
wood-based fibers, and pulps. In addition, we use other materials in
various manufacturing processes. While temporary industry-wide shortages
of raw materials have occurred, we have historically been able to manage the
supply chain disruption by working closely with our suppliers and
customers. Changes in the price of raw materials are generally
passed on to customers through contractual price mechanisms over time, during
contract renewals, and by other means.
Outlook. The Company is affected by
general economic and industrial growth, raw material availability, cost
inflation, supply chain disruptions, new and changing tariffs and general
industrial production. Our business has both geographic and end market
diversity, which reduces the effect of any one of these factors on our overall
performance. Our results are affected by our ability to pass through raw
material and other cost changes, including tariffs, to our customers, improve
manufacturing productivity and adapt to volume changes of our
customers. Despite global
macro-economic challenges and uncertainties attributed to inflation, changing
tariff policies and general market softness, we continue to believe our
underlying long-term demand fundamental in all segments will remain strong as
we focus on providing advantaged products in targeted markets. For fiscal year
2026 ("fiscal 2026"), we project cash from operations between $170 to
$190 million and free cash flow between $90 to $110 million. Projected fiscal
2026 free cash flow assumes $80 million of capital spending.
Acquisition Strategy
As part of our growth strategy, we intend to pursue additional acquisition targets. Our acquisition strategy is focused on identifying attractive assets that will support improving our long-term financial performance, enhancing our market positions, and expanding our existing and complementary product lines. We seek to obtain businesses for attractive post-synergy multiples, creating value for our stockholders from synergy realization, leveraging the acquired products across our customer base, creating new platforms for future growth, and assuming best practices from the businesses we acquire. While the expected benefits to earnings will be estimated at the commencement of each transaction, once the execution of the plan and integration occur, we may be unable to accurately estimate or track what the ultimate effects will be due to system integrations and movements of activities to multiple facilities.
Non-GAAP
Measures
We use certain non-GAAP
financial measures in our disclosures. Adjusted EBITDA is the primary measure
of profit (loss) used by the CODM, our CEO, to evaluate performance and allocate resources among our
reportable segments. Adjusted EBITDA is a non-GAAP financial measure and may be
calculated differently by other companies, including those in our industry or
peer group, which may limit its usefulness for comparative purposes. Adjusted
EBITDA should not be considered an alternative to any financial measure
determined in accordance with GAAP. See Note 8 to the Consolidated and Combined Financial
Statements for the definition of, and additional information regarding,
Adjusted EBITDA.
We also use free cash flow
metrics as a supplemental measure of liquidity, as they assist us in assessing
our ability to fund growth through cash generation. Free cash flow metrics are
non-GAAP financial measures and may be calculated differently by other
companies, including those in our industry or peer group, which may limit their
usefulness for comparative purposes. Free cash flow metrics should not be
considered an alternative to any financial measure determined in accordance
with GAAP. See “Liquidity and Capital Resources–Free Cash
flow” for the definition and calculation of free cash flow for the quarter
ended March 28, 2026.
14
Results of Operations
Comparison of the Quarterly Period Ended March 28, 2026 (the “Quarter”) and the Quarterly Period Ended March 29, 2025 (the “Prior Quarter”)
Business integration expenses consist of restructuring and impairment charges, acquisition/merger related costs, and other business optimization costs. Tables present dollars in millions.
Consolidated Overview
Quarter
Prior Quarter
$ Change
% Change
Net sales
$
796
$
824
$
(28)
(3)
%
Operating income
17
4
13
325
%
Net sales: The
net sales decline included a $57 million decrease in selling prices primarily due to product mix and pass-through of lower raw
material costs and a 2% organic volume decline partially offset by favorable
foreign currency changes of $48 million.
The volume decline was primarily attributed to winter storm disruptions in North
America and general market softness in Europe.
Operating income:
The operating income increase included a $7 million favorable impact from decreased business integration costs and lower depreciation and amortization expenses of $6 million.
Other expense,
net:
The decrease in other expense is primarily due to favorable changes in currency costs related to intercompany loans.
Interest expense, net: The decrease in interest expense, net is
primarily the result of changes in interest rates and repayments on long-term
borrowings.
Changes in Comprehensive Income
The $13 million increase in comprehensive income from the Prior Quarter is attributed to a $10 million unfavorable change in currency translation and a $23 million increase in net income. Currency translation changes are primarily
related to non-U.S. subsidiaries with a functional currency other than the U.S.
dollar, whereby assets and liabilities are translated from the respective
functional currency into U.S. dollars using period-end exchange
rates. The change in currency translation in the Quarter was
primarily attributed to locations utilizing the Euro and Brazilian real as
their functional currency. As part of its overall risk management,
the Company uses derivative instruments to reduce foreign currency exposure to
translation of certain foreign operations. The Company records
changes to the fair value of these instruments in Accumulated other
comprehensive loss. The change in fair value of these instruments in
the current Quarter is primarily attributed to the change in the forward
foreign exchange curves between measurement dates.
Segment Overview
Americas
Quarter
Prior Quarter
$ Change
% Change
Net sales
$
437
$
473
$
(36)
(8)
%
Adjusted EBITDA
58
64
(6)
(9)
%
Net sales: The net sales decline included a $42 million
decrease in selling prices primarily due to product mix, pass-through of
lower raw material costs and a 1% organic volume decline. The volume decline was primarily attributed to winter
storm disruptions in North America.
Adjusted EBITDA: The adjusted EBITDA decline was primarily a
result of unfavorable price cost spread of $5 million.
15
Rest of World
Quarter
Prior Quarter
$ Change
% Change
Net sales
$
359
$
351
$
8
2
%
Adjusted EBITDA
32
25
7
28
%
Net sales: The net sales increase included a favorable foreign currency change of $37 million partially offset by a $15 million
decrease in selling prices primarily due to product mix, pass-through of
lower raw material costs and a 4% organic volume decline. The volume decline was primarily attributed to general
market softness in Europe.
Adjusted EBITDA: The adjusted EBITDA increase was primarily a
result of favorable price cost spread of $7 million as the result of synergy
realization and mix improvement and a $2 million favorable benefit from foreign
currency changes partially offset by softer volumes.
Comparison of the Two Quarterly Periods Ended March 28, 2026 (the “YTD”) and the Two Quarterly Periods Ended March 29, 2025 (the “Prior YTD”)
Business integration expenses consist of restructuring and impairment charges, acquisition/merger related costs, and other business optimization costs. Tables present dollars in millions.
Consolidated Overview
YTD
Prior YTD
$ Change
% Change
Net sales
$
1,588
$
1,526
$
62
4
%
Operating income (loss)
31
(18)
49
272
%
Net sales: The net sales increase included revenue from the
prior year merger of $112 million and favorable foreign currency changes of $84
million that were partially offset by a $110 million decrease in selling prices
primarily due to the pass-through of lower raw material costs and a 2% organic
volume decline, which was attributed to strength in various product categories, being more than offset by competitive pressures in South America, winter storm
disruptions in North America and general market softness in Europe.
Operating income (loss):
The operating income increase included a $17 million favorable impact from decreased business integration costs, a $12 million non-recurring inventory fair value step-up charge in the prior year, lower depreciation and amortization expenses of $14 million and operating income from the prior year merger.
Other expense, net:
The decrease in other expense is primarily due to a $15 million prepayment penalty charge for retiring debt in the prior year in connection with the prior year merger as well as favorable changes in currency costs related to intercompany loans.
Interest expense, net: The interest expense, net increase is
primarily attributed to incurred debt connected with the prior year merger that
closed on November 4, 2024 partially offset by changes in interest rates and
the repayment of long-term borrowings.
Changes in Comprehensive Income
The $113 million increase in comprehensive income from the Prior YTD is attributed to a $64 million favorable change in currency translation and a $49 million increase in net income. Currency translation changes are primarily
related to non-U.S. subsidiaries with a functional currency other than the U.S.
dollar, whereby assets and liabilities are translated from the respective
functional currency into U.S. dollars using period-end exchange
rates. The change in currency translation in the YTD was
primarily attributed to locations utilizing the Euro and Brazilian real as
their functional currency. As part of its overall risk management,
the Company uses derivative instruments to reduce foreign currency exposure to
translation of certain foreign operations. The Company records
changes to the fair value of these instruments in Accumulated other
comprehensive loss. The change in fair value of these instruments in
current fiscal 2026 versus fiscal 2025 is primarily attributed to the change in the forward
foreign exchange curves between measurement dates.
16
Segment Overview
Americas
YTD
Prior YTD
$ Change
% Change
Net sales
$
877
$
893
$
(16)
(2)
%
Adjusted EBITDA
116
120
(4)
(3)
%
Net sales: The net sales decline included an $81 million decrease in selling prices primarily due to the pass-through of lower raw material costs and competitive pressu
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Outlook
The Company is affected by
general economic and industrial growth, raw material availability, cost
inflation, supply chain disruptions, new and changing tariffs and general
industrial production. Our business has both geographic and end
market diversity, which reduces the effect of any one of these factors on our
overall performance. Our results are affected by our ability to pass
through raw material and other cost changes, including tariffs, to our
customers, improve manufacturing productivity and adapt to volume changes of
our customers. During fiscal 2025, the Company announced capacity
rationalizations (Project CORE) in order to deliver future cost savings and optimize equipment
utilization. In total, over the next two years, these actions are projected to
cost approximately $20 million with the operations savings intended to counter
general economic softness. Despite global macro-economic challenges
and uncertainties attributed to inflation, changing tariff
policies and general market softness, we continue to believe our underlying
long-term demand fundamental in all segments will remain strong as we focus on
providing advantaged products in targeted markets. For fiscal year 2026 ("fiscal 2026"),
we project cash from operations between $170 to $190 million and free cash
flow between $90 to $110 million. Projected fiscal 2026 free cash flow assumes $80 million of capital
spending. For the definition of free cash flow and further
information related to free cash flow as a non-GAAP financial measure, see
“Liquidity and Capital Resources.”
Discussion of Results of Operations for Fiscal 2025 Compared to Fiscal 2024
Business integration expenses consist of restructuring and impairment charges, divestiture-related costs, and other business optimization costs. Tables present dollars in millions. A
discussion and analysis regarding our results of operations for fiscal year
2024 compared to fiscal year 2023 can be found on Form 8-K/A, filed with the
SEC on January 31, 2025.
Consolidated Overview
Fiscal Year
2025
2024
$ Change
% Change
Net sales
$
3,204
$
2,187
$
1,017
47
%
Operating income (loss)
$
5
$
(141)
$
146
104
%
Net
sales: The net sales
increase included revenue from the Transaction of $1,145 million partially
offset by decreased selling prices of $45 million primarily due to the
pass-through of lower raw material costs, a $32 million unfavorable impact from
foreign currency changes and a 2% organic volume decline, that was attributed
to general market softness in Europe and competitive pressures from imports in
South America.
Operating income
(loss): The operating income
improvement is primarily attributed to the $171 million goodwill impairment
charge in fiscal 2024, the elimination of $18 million in corporate expense
allocations, an $11 million favorable change from prior year hyperinflation
in Argentina, and operating income from GLT, partially offset by a $16 million inventory fair value step-up
charge related to the Transaction, a $25 million unfavorable impact from increased business integration
costs, a $12 million increase in stock compensation expense, and an unfavorable impact from volume declines.
8
Other expense (income), net
Fiscal Year
2025
2024
$ Change
% Change
Other expense (income), net
$
30
$
(9)
$
39
433
%
The Other expense (income) increase is
due to a $15 million prepayment penalty charge for retiring debt concurrently
with the Transaction, $8 million of non-cash charges associated with
pre-Transaction tax liabilities, and a $12 million unfavorable change in currency charges related to intercompany
loans.
Interest expense, net
Fiscal Year
2025
2024
$ Change
% Change
Interest expense, net
$
141
$
3
$
138
4,600
%
The Interest expense increase
is due to increased borrowings from the Transaction.
Comprehensive income (loss)
Fiscal Year
2025
2024
$ Change
% Change
Comprehensive income (loss)
$
(186)
$
(151)
$
(35)
(23)
%
The decrease is primarily attributed to a $30 million unfavorable change in currency translation combined with a $5 million decline in net income. Currency translation changes are primarily related to non-U.S. subsidiaries with a functional currency other than the U.S. dollar whereby assets and liabilities are translated from the respective functional currency into U.S. dollars using period-end exchange rates. The change in currency translation was primarily attributed to locations utilizing the euro or Brazilian real as their functional currency. As part of its overall risk management, the Company uses derivative instruments to reduce foreign currency exposure to translation of certain foreign operations. The Company records changes to the fair value of these instruments in Accumulated other comprehensive loss. The change in fair value of these instruments in the year is primarily attributed to the change in the forward foreign currency exchange curves between measurement dates.
Segment Overview
Americas
Fiscal Year
2025
2024
$ Change
% Change
Net sales
$
1,833
$
1,493
$
340
23
%
Adjusted EBITDA
$
241
$
223
$
18
8
%
Net sales: The net sales increase included revenue from the
Transaction of $440 million partially offset by decreased selling prices of $35 million primarily due to the pass-through of lower raw material costs, a $36
million unfavorable impact from foreign currency changes and a 2% organic
volume decline that was primarily attributed to competitive pressures from
imports in South America.
Adjusted EBITDA: The EBITDA increase included EBITDA from the
Transaction of $40 million partially offset by unfavorable price cost spread of $14 million and a $7 million unfavorable impact from currency changes.
Rest of World
Fiscal Year
2025
2024
$ Change
% Change
Net sales
$
1,371
$
694
$
677
98
%
Adjusted EBITDA
$
113
$
59
$
54
92
%
Net
sales: The net sales
increase included revenue from the Transaction of $705 million partially offset
by decreased selling prices of $10 million due to the pass-through of lower raw materials, as well as a 3% organic volume decline that was primarily attributed to general market
softness in Europe.
Adjusted EBITDA: The EBITDA increase included EBITDA from the
Transaction of $45 million and favorable price cost spread of 11 million.
Liquidity and Capital Resources
We manage our global cash
requirements considering (i) available funds among the many subsidiaries
through which we conduct our business, (ii) the geographic location of our
liquidity needs, and (iii) the cost to access international cash
balances. At the end of the fiscal 2025, the Company had no
outstanding balance on its asset-based revolving line of credit that matures in
November 2029 and the Company was in compliance with all covenants.
9
Cash Flows from Operating Activities
Net cash from operating
activities declined $89 million, primarily related to a decline in net income prior to non-cash
activities.
Cash Flows from Investing Activities
Net cash from investing activities improved $31 million, primarily attributed to cash acquired in
connection with the Transaction and settlement of net investment hedges in fiscal
2025 compared to the settlement of short-term marketable securities in fiscal
2024.
Cash Flows from Financing Activities
Net cash used in financing activities improved $88 million attributed to higher transfers from Berry prior
to the Transaction partially offset by repayments of long-term debt in fiscal
2025 and debt fees related to the Transaction.
Free Cash Flow
Our consolidated free cash flow for the fiscal 2025 are summarized as
follows:
September 27, 2025
Cash flow from operating activities
$
103
Pre-Transaction free cash flow from operating activities(1)
90
Additions to property, plant and equipment, net
(67
)
Free cash flow
$
126
(1) Pre-merger cash flow includes pre-Transaction cash from operations and other cash payments burdened by the Transaction.
We use free cash flow metrics as a
supplemental measure of liquidity as it assists us in assessing our ability to
fund growth through generation of cash.
Free cash flow metrics may be calculated differently by other companies,
including other companies in our industry or peer group, limiting its
usefulness on a comparative basis. Free
cash flow metrics are not a financial measure presented in accordance with GAAP
and should not be considered as an alternative to any other measure determined
in accordance with GAAP.
Liquidity Outlook
At the end of fiscal 2025, our
cash balance was $305 million, of which approximately
86% was located outside the U.S. We believe our existing and future U.S.-based cash and cash flow from U.S. operations will be adequate to meet our
short-term and long-term liquidity needs. The Company has the
ability to repatriate the cash located outside the U.S. to the extent not
needed to meet operational and capital needs without significant
restrictions. Our unremitted foreign earnings were $336 million at
the end of fiscal 2025. The computation of the deferred tax
liability associated with unremitted earnings is not practicable.
Critical Accounting Policies and Estimates
We disclose those accounting policies that we consider to be significant in determining the amounts to be utilized for communicating our Consolidated and Combined Balance Sheets, Results of Operations and Cash Flows in the first note to our Consolidated and Combined Financial Statements included elsewhere herein. Our discussion and analysis of our financial condition and results of operations are based on our Consolidated and Combined Financial Statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with these principles requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results may differ from these estimates under different assumptions or conditions.
Goodwill. We complete a quantitative test to evaluate
impairment of goodwill in order to determine if the carrying value of any
reporting unit exceeded its fair value. This test is completed on
the first day of the fourth fiscal quarter. We utilize a discounted
cash flow analysis (income approach) in combination with a comparative company
market approach to determine the fair value of each reporting unit. Using the
quantitative approach, the Company makes various estimates and assumptions in
determining the estimated fair value of each reporting unit. Management
judgment is involved in estimating these variables and they include
uncertainties since they are forecasting future events. Changes in those
assumptions or estimates with respect to a reporting unit or its prospects,
which may result from a change in market conditions, market trends, interest
rates or other factors outside of our control, or significant underperformance
relative to future operating results could result in an impairment charge in
the future or may require a more frequent assessment.
Discounted cash flow models
are reliant on various assumptions, including projected business results,
growth factors such as revenue and EBITDA margin, and weighted-average cost of capital,
which ranges between 11% and 13.0%. See Note 1. Basis of Presentation and Summary of Significant Accounting Policies.
10
The Company's fair value and carrying value of reporting units are as follows:
Fair Value
June 29, 2025
Carrying Value
June 29, 2025
Cushion
June 29, 2025
Americas
$
2,130
$
1,996
$
134
Rest of World
890
825
65
Future declines in our expected
operating performance or sustained periods of lower valuation market multiples
could result in impairment charges in the future or may require a more frequent
assessment.