Mercer International Inc. Reports First Quarter 2026 Results
Rhea-AI Summary
Mercer International (Nasdaq: MERC) reported Q1 2026 Operating EBITDA of $7.8M and a net loss of $52.0M ($0.78/share). Revenues were $489.3M, down ~3% YoY. The company recorded a $22.0M non-cash inventory impairment, secured a waiver on its German revolving credit facility, and reported $41.0M cumulative savings from its One Goal One Hundred program.
Mass timber order book and commitments reached $171M, and management expects leverage compliance by Q4 2026 while evaluating strategic and financing alternatives.
Positive
- One Goal One Hundred savings of $11.0M in Q1
- Cumulative cost savings of $41.0M since April 2025
- Mass timber order book and commitments of $171M
Negative
- Net loss of $52.0M in Q1 2026
- Non-cash inventory impairment of $22.0M
- Operating EBITDA down to $7.8M from $47.1M year-ago
- Waiver obtained after failing German credit facility leverage covenant
News Market Reaction – MERC
In the May 8 session, MERC declined 11.71%, reflecting a significant negative market reaction. Argus tracked a trough of -7.5% from its starting point during tracking. Our momentum scanner triggered 17 alerts that day, indicating notable trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Nov 06 | Q3 2025 earnings | Negative | -2.1% | Reported Q3 2025 loss, negative EBITDA and inventory impairment amid higher costs. |
| Jul 31 | Q2 2025 earnings | Negative | -18.6% | Q2 2025 showed negative EBITDA, wider net loss and an $11M inventory impairment. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent earnings reports with losses and impairments have typically triggered negative stock reactions, suggesting investors focus heavily on profitability and balance-sheet pressure.
Recent earnings history shows sustained pressure: Q2 and Q3 2025 both featured negative Operating EBITDA, widening net losses, and inventory impairments, with price reactions of -18.6% and -2.13%. Management repeatedly highlighted the One Goal One Hundred cost program and industry headwinds. Today’s Q1 2026 update continues that pattern of weak profitability, further impairments, and ongoing cost-savings efforts, against a still-stressed pulp and lumber market backdrop.
Key Terms
operating ebitda financial
non-cash inventory impairment financial
nbsk technical
cross-laminated timber technical
revolving credit facility financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Selected Highlights
- First quarter Operating EBITDA* of
$7.8 million (net loss of$52.0 million ), including a non-cash inventory impairment of$22.0 million , compared to$47.1 million (net loss of$22.3 million ) in the same quarter of 2025 - Secured an extended waiver for the German revolving credit facility to address covenant compliance and to provide flexibility to pursue and implement steps to enhance liquidity and financial condition to position for an eventual market recovery
- On track for our
$100 million "One Goal One Hundred" goal, attaining$11.0 million of cost savings in the first quarter, and a total of approximately$41.0 million since launch in April 2025; one of various initiatives to improve our balance sheet - Mass timber momentum continues to build, backed by an order book and commitments of
$171 million that support a multi-year production plan
NEW YORK, May 07, 2026 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) today reported first quarter 2026 Operating EBITDA of
In the first quarter of 2026, net loss was
Mr. Juan Carlos Bueno, Chief Executive Officer, stated: "Our pulp sales realizations showed resilience this quarter as softwood pulp markets held steady, while hardwood pulp performance trended upward on favorable demand-supply dynamics. However, elevated fiber costs across our supply chain and a slower-than-anticipated recovery in prices continued to weigh on our results. As a result, we recognized a non-cash impairment of
The current conflicts in the Middle East and their impacts on energy supply are creating significant inflationary pressures and further economic uncertainty. We believe these conditions may negatively impact demand for our products and increase certain operating costs, such as chemicals and freight. Conversely, high oil prices are raising interest in bio-substitution, as expensive oil-based synthetics drive increased demand for lower-cost, wood-pulp-derived alternatives. While the potential impacts and duration of these conditions are currently unknown, we continue to monitor and assess these events.
We continue to pursue our "One Goal One Hundred" program and remain confident that we will achieve our targeted
In the first quarter of 2026, European softwood pulp prices increased compared to the fourth quarter of 2025 due to supply constraints, although these gains were offset by higher discounts. In China, softwood pulp pricing remained under pressure from an oversupplied paper sector and ongoing economic uncertainties, while excess inventory tempered the North American market. Conversely, hardwood pulp prices increased globally due to stronger demand and tightening inventory levels. Looking ahead to the second quarter, we expect softwood pulp prices to increase modestly across all markets, with hardwood pricing remaining relatively steady.
Our lumber sales realizations in both the U.S. and Europe were relatively stable in the first quarter of 2026. For the second quarter, we currently expect lumber prices to remain stable in Europe and modestly increase in the U.S. due to low supply.
Per unit fiber costs for our pulp and solid wood segments increased in the first quarter of 2026 compared to the fourth quarter of 2025 driven by supply constraints and strong demand. We currently expect per unit fiber costs to stabilize in the second quarter of 2026 as improved availability is offset by strong demand.
In the first quarter of 2026, we had relatively stable production but fiber constraints in Europe required us to strategically reduce production at our German mills by approximately 20,000 tonnes. There was no annual planned maintenance downtime in the first quarter of 2026 and none is currently scheduled for the second quarter.
Overall, our solid wood segment remains pressured by high U.S. interest rates and European economic headwinds. As conditions improve, we expect a strong recovery, with pent-up demand and supply constraints eventually driving higher pricing. Current geopolitical conflicts may delay any economic recovery. With the installation of new scanning technology currently underway at Torgau that is expected to be operational in the second quarter, we are well positioned to increase our production of on-grade dimensional lumber. This allows us to scale our exports to the U.S. market, enabling us to shift more of our existing production into higher-value dimensional products. Within this segment, our mass timber order book and commitments grew to approximately
As a result of ongoing economic uncertainty and softness in the markets for our products, we did not meet the requisite leverage ratio required under our German revolving credit facility at the end of the first quarter. As announced, to address this, we secured a waiver of the applicable covenant from the lenders under the facility. Based on management's current forecasts and assumptions, including with respect to pricing and demand for our products, we currently expect to achieve compliance with the leverage ratio by the fourth quarter of 2026. Accordingly, amounts outstanding under our German revolving credit facility remain classified as "non-current liabilities" at the end of the first quarter.
The waiver gives us additional flexibility to pursue and implement measures and solutions with the goal of enhancing our liquidity and financial condition in the current economic environment, including to address maturing indebtedness, and to assist our positioning for an eventual market recovery. To this end, we are also evaluating strategic alternatives and financing options to address our liquidity needs and goals. Our board of directors has appointed a special committee of independent directors to oversee, review and evaluate the development and implementation of potential liquidity management strategies and other transactions to improve our capital structure."
Mr. Bueno concluded: "In the first quarter of 2026, economic headwinds continued and were accompanied by geopolitical volatility. In these difficult conditions, the steps being taken to address liquidity, combined with our ongoing focus on production discipline and the "One Goal One Hundred" program, are intended to position us to capture market upside when conditions improve towards the second half of the year."
______________
*Operating EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States ("GAAP") and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. See page 6 of the financial tables included in this press release for a reconciliation of net loss to Operating EBITDA.
Consolidated Financial Results
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| (in thousands, except per share amounts) | |||||||||||
| Revenues | $ | 489,304 | $ | 449,504 | $ | 506,974 | |||||
| Operating income (loss) | $ | (32,892 | ) | $ | (278,489 | ) | $ | 6,733 | |||
| Operating EBITDA | $ | 7,848 | $ | (20,149 | ) | $ | 47,088 | ||||
| Net loss | $ | (51,996 | ) | $ | (308,700 | ) | $ | (22,339 | ) | ||
| Net loss per common share | |||||||||||
| Basic | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
| Diluted | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
Consolidated – Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Total revenues for the first quarter of 2026 decreased by approximately
Costs and expenses in the first quarter of 2026 increased by approximately
In the first quarter of 2026, Operating EBITDA decreased to
Segment Results
Pulp
| Three Months Ended March 31, | |||||||
| 2026 | 2025 | ||||||
| (in thousands) | |||||||
| Pulp revenues | $ | 319,170 | $ | 356,964 | |||
| Energy and chemical revenues | $ | 25,813 | $ | 24,116 | |||
| Segment Operating EBITDA(1) | $ | 6,897 | $ | 49,872 | |||
______________
(1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
In the first quarter of 2026, Segment Operating EBITDA for the pulp segment decreased to
Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the first quarter of 2026 decreased by approximately
Pulp revenues in the first quarter of 2026 decreased by approximately
In the first quarter of 2026, the third-party industry quoted average list price for NBSK pulp in Europe modestly increased compared to the same period of 2025 primarily due to supply constraints. In the first quarter of 2026, the third-party industry quoted average list price for NBSK pulp in North America and the third-party industry quoted average net price for NBSK pulp in China decreased compared to the same period of 2025. The decrease was primarily due to weak demand driven by the current economic climate and, in China, an oversupplied paper market. Our average NBSK pulp sales realizations in the first quarter of 2026 decreased by approximately
In the first quarter of 2026, the third-party industry quoted average list price for NBHK pulp in North America and the third-party industry quoted average net price for NBHK pulp in China modestly increased from the same period of 2025 primarily due to global supply constraints. In the first quarter of 2026, average NBHK pulp sales realizations remained flat at
Pulp sales volumes in the first quarter of 2026 were relatively steady at 470,700 ADMTs compared to 477,879 ADMTs in the same period of 2025.
Energy and chemical revenues in the first quarter of 2026 were relatively flat at
Costs and expenses in the first quarter of 2026 remained stable at
Total pulp production in the first quarter of 2026 was relatively flat at 465,717 ADMTs compared to 458,909 ADMTs in the same period of 2025. There was no planned maintenance downtime in the first quarter of 2026, compared to 22 days (approximately 29,700 ADMTs) at our Celgar mill in the same period of 2025. This benefit was mostly offset by the impact of reduced production at our German mills due to fiber supply constraints in Europe.
Overall average per unit fiber costs in the first quarter of 2026 increased by approximately
Solid Wood
| Three Months Ended March 31, | |||||||
| 2026 | 2025 | ||||||
| (in thousands) | |||||||
| Lumber revenues | $ | 60,091 | $ | 65,386 | |||
| Manufactured products revenues(1) | $ | 21,041 | $ | 18,824 | |||
| Pallet revenues | $ | 29,860 | $ | 23,177 | |||
| Biofuels revenues(2) | $ | 12,180 | $ | 9,224 | |||
| Energy revenues | $ | 5,598 | $ | 4,866 | |||
| Wood residuals revenues | $ | 2,972 | $ | 1,243 | |||
| Segment Operating EBITDA(3) | $ | (5,631 | ) | $ | (292 | ) | |
______________
(1) Manufactured products primarily include cross-laminated timber ("CLT") and glue-laminated timber ("glulam").
(2) Biofuels include pellets and briquettes.
(3) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
In the first quarter of 2026, Segment Operating EBITDA for the solid wood segment was negative
Solid wood segment revenues in the first quarter of 2026 increased by approximately
Lumber revenues in the first quarter of 2026 decreased by approximately
Lumber sales volumes in the first quarter of 2026 decreased by approximately
In the first quarter of 2026, manufactured products revenues increased by approximately
Lumber production in the first quarter of 2026 decreased by approximately
Fiber costs were approximately
Liquidity
As of March 31, 2026, we had cash and cash equivalents of
The following table is a summary of selected financial information as of the dates indicated:
| March 31, | December 31, | ||||||
| 2026 | 2025 | ||||||
| (in thousands) | |||||||
| Cash and cash equivalents | $ | 84,541 | $ | 186,805 | |||
| Working capital | $ | 449,976 | $ | 582,176 | |||
| Total assets | $ | 1,963,836 | $ | 2,041,420 | |||
| Current liabilities | $ | 384,776 | $ | 283,626 | |||
| Long-term liabilities | $ | 1,584,598 | $ | 1,689,734 | |||
| Total shareholders’ equity (deficit) | $ | (5,538 | ) | $ | 68,060 | ||
Earnings Release Call
In conjunction with this release, Mercer International Inc. will host a conference call, which will be simultaneously broadcast live over the Internet. Management will host the call, which is scheduled for May 8, 2026 at 10:00 AM ET. Listeners can access the conference call live and archived for 30 days over the Internet at https://edge.media-server.com/mmc/p/ha9u4g4a or through a link on the company's home page at https://www.mercerint.com. Please allow 15 minutes prior to the call to visit the website and download and install any necessary audio software.
Mercer International Inc. is a global forest products company with operations in Germany, USA and Canada with consolidated annual production capacity of 2.1 million tonnes of pulp, 1,023 million board feet of lumber, 210 thousand cubic meters of CLT, 45 thousand cubic meters of glulam, 17 million pallets and 230 thousand tonnes of biofuels. To obtain further information on the company, please visit its website at https://www.mercerint.com.
The preceding includes forward-looking statements which involve known and unknown risks and uncertainties which may cause our actual results in future periods to differ materially from forecasted results. Words such as "expects", "anticipates", "are optimistic that", "projects", "intends", "designed", "will", "believes", "estimates", "may", "could" and variations of such words and similar expressions are intended to identify such forward-looking statements. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of our business, raw material costs, our level of indebtedness, ability to refinance or obtain any necessary financing on acceptable terms in the future, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.
APPROVED BY:
William D. McCartney
Chairman
(604) 684-1099
Juan Carlos Bueno
Chief Executive Officer
(604) 684-1099
-FINANCIAL TABLES FOLLOW-
Summary Financial Highlights
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| (in thousands, except per share amounts) | |||||||||||
| Revenues from external customers | |||||||||||
| Pulp segment | $ | 344,983 | $ | 334,254 | $ | 381,080 | |||||
| Solid wood segment | 131,742 | 110,216 | 122,720 | ||||||||
| Corporate and other | 12,579 | 5,034 | 3,174 | ||||||||
| Total revenues | $ | 489,304 | $ | 449,504 | $ | 506,974 | |||||
| Pulp Segment Operating EBITDA(1) | $ | 6,897 | $ | (11,323 | ) | $ | 49,872 | ||||
| Solid wood Segment Operating EBITDA(1) | (5,631 | ) | (10,771 | ) | (292 | ) | |||||
| Corporate and other | 6,582 | 1,945 | (2,492 | ) | |||||||
| Operating EBITDA(2) | $ | 7,848 | $ | (20,149 | ) | $ | 47,088 | ||||
| Net loss | $ | (51,996 | ) | $ | (308,700 | ) | $ | (22,339 | ) | ||
| Net loss per common share | |||||||||||
| Basic | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
| Diluted | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
| Common shares outstanding at period end | 66,983 | 66,983 | 66,871 | ||||||||
______________
(1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
(2) Operating EBITDA is not a measure of financial performance under GAAP and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. See page 6 of the financial tables included in this press release for a reconciliation of net loss to Operating EBITDA.
Summary Operating Highlights
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| Pulp Segment | |||||||||||
| Pulp production ('000 ADMTs) | |||||||||||
| NBSK | 362.5 | 378.0 | 370.4 | ||||||||
| NBHK | 103.2 | 82.0 | 88.5 | ||||||||
| Annual maintenance downtime ('000 ADMTs) | — | 41.5 | 29.7 | ||||||||
| Annual maintenance downtime (days) | — | 21 | 22 | ||||||||
| Pulp sales ('000 ADMTs) | |||||||||||
| NBSK | 385.1 | 367.0 | 388.1 | ||||||||
| NBHK | 85.6 | 105.4 | 89.8 | ||||||||
| Average NBSK pulp prices ($/ADMT)(1) | |||||||||||
| Europe | 1,618 | 1,498 | 1,550 | ||||||||
| China | 685 | 671 | 793 | ||||||||
| North America | 1,563 | 1,568 | 1,753 | ||||||||
| Average NBHK pulp prices ($/ADMT)(1) | |||||||||||
| China | 595 | 540 | 578 | ||||||||
| North America | 1,338 | 1,198 | 1,268 | ||||||||
| Average pulp sales realizations ($/ADMT)(2) | |||||||||||
| NBSK | 696 | 702 | 783 | ||||||||
| NBHK | 564 | 528 | 570 | ||||||||
| Energy production ('000 MWh) | 544.6 | 500.4 | 527.1 | ||||||||
| Energy sales ('000 MWh) | 179.3 | 166.0 | 198.7 | ||||||||
| Average energy sales realizations ($/MWh) | 123 | 97 | 108 | ||||||||
| Solid Wood Segment | |||||||||||
| Lumber | |||||||||||
| Production (MMfbm) | 115.9 | 108.6 | 128.0 | ||||||||
| Sales (MMfbm) | 112.1 | 103.0 | 130.9 | ||||||||
| Average sales realizations ($/Mfbm) | 536 | 533 | 499 | ||||||||
| Energy | |||||||||||
| Production and sales ('000 MWh) | 38.0 | 35.5 | 36.0 | ||||||||
| Average sales realizations ($/MWh) | 147 | 141 | 135 | ||||||||
| Manufactured products(3) | |||||||||||
| Production ('000 cubic meters) | 7.9 | 6.5 | 7.1 | ||||||||
| Sales ('000 cubic meters) | 10.7 | 6.5 | 5.9 | ||||||||
| Average sales realizations ($/cubic meter) | 1,801 | 1,805 | 2,832 | ||||||||
| Pallets | |||||||||||
| Production ('000 units) | 2,433.3 | 1,836.6 | 2,096.4 | ||||||||
| Sales ('000 units) | 2,381.3 | 2,020.8 | 2,128.8 | ||||||||
| Average sales realizations ($/unit) | 13 | 12 | 11 | ||||||||
| Biofuels(4) | |||||||||||
| Production ('000 tonnes) | 35.4 | 38.2 | 44.5 | ||||||||
| Sales ('000 tonnes) | 38.1 | 35.8 | 40.3 | ||||||||
| Average sales realizations ($/tonne) | 320 | 278 | 229 | ||||||||
| Average Spot Currency Exchange Rates | |||||||||||
| $ / €(5) | 1.1701 | 1.1641 | 1.0531 | ||||||||
| $ / C$(5) | 0.7292 | 0.7175 | 0.6969 | ||||||||
______________
(1) Source: RISI pricing report. Europe and North America are list prices. China are net prices which include discounts, allowances and rebates.
(2) Sales realizations after customer discounts, rebates and other selling concessions.
(3) Manufactured products primarily include CLT and glulam.
(4) Biofuels include pellets and briquettes.
(5) Average Federal Reserve Bank of New York Noon Buying Rates over the reporting period.
| MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | 489,304 | $ | 506,974 | ||||
| Costs and expenses | ||||||||
| Cost of sales, excluding depreciation and amortization | 452,985 | 430,247 | ||||||
| Cost of sales depreciation and amortization | 40,666 | 40,290 | ||||||
| Selling, general and administrative expenses | 28,545 | 29,704 | ||||||
| Operating income (loss) | (32,892 | ) | 6,733 | |||||
| Other income (expenses) | ||||||||
| Interest expense | (29,101 | ) | (28,155 | ) | ||||
| Other income (expenses) | 1,820 | (185 | ) | |||||
| Total other expenses, net | (27,281 | ) | (28,340 | ) | ||||
| Loss before income taxes | (60,173 | ) | (21,607 | ) | ||||
| Income tax recovery (provision) | 8,177 | (732 | ) | |||||
| Net loss | $ | (51,996 | ) | $ | (22,339 | ) | ||
| Net loss per common share | ||||||||
| Basic | $ | (0.78 | ) | $ | (0.33 | ) | ||
| Diluted | $ | (0.78 | ) | $ | (0.33 | ) | ||
| Dividends declared per common share | $ | — | $ | 0.075 | ||||
| MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) | ||||||||
| March 31, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 84,541 | $ | 186,805 | ||||
| Restricted cash | 5,000 | — | ||||||
| Accounts receivable, net | 329,070 | 298,889 | ||||||
| Inventories | 366,024 | 359,401 | ||||||
| Prepaid expenses and other | 50,117 | 20,707 | ||||||
| Total current assets | 834,752 | 865,802 | ||||||
| Property, plant and equipment, net | 1,068,595 | 1,115,490 | ||||||
| Amortizable intangible assets, net | 26,247 | 26,110 | ||||||
| Operating lease right-of-use assets | 6,307 | 6,818 | ||||||
| Pension asset | 12,758 | 12,975 | ||||||
| Deferred income tax assets | 7,586 | 7,839 | ||||||
| Other long-term assets | 7,591 | 6,386 | ||||||
| Total assets | $ | 1,963,836 | $ | 2,041,420 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other | $ | 275,705 | $ | 269,217 | ||||
| Pension and other post-retirement benefit obligations | 732 | 745 | ||||||
| Current debt | 108,339 | 13,664 | ||||||
| Total current liabilities | 384,776 | 283,626 | ||||||
| Long-term debt | 1,509,588 | 1,605,144 | ||||||
| Pension and other post-retirement benefit obligations | 10,607 | 10,392 | ||||||
| Operating lease liabilities | 3,463 | 3,858 | ||||||
| Deferred income tax liabilities | 49,084 | 58,298 | ||||||
| Other long-term liabilities | 11,856 | 12,042 | ||||||
| Total liabilities | 1,969,374 | 1,973,360 | ||||||
| Shareholders’ equity | ||||||||
| Common shares | 66,871 | 66,871 | ||||||
| Additional paid-in capital | 366,228 | 365,357 | ||||||
| Accumulated deficit | (329,012 | ) | (277,016 | ) | ||||
| Accumulated other comprehensive loss | (109,625 | ) | (87,152 | ) | ||||
| Total shareholders’ equity (deficit) | (5,538 | ) | 68,060 | |||||
| Total liabilities and shareholders’ equity | $ | 1,963,836 | $ | 2,041,420 | ||||
| MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from (used in) operating activities | ||||||||
| Net loss | $ | (51,996 | ) | $ | (22,339 | ) | ||
| Adjustments to reconcile net loss to cash flows from operating activities | ||||||||
| Depreciation and amortization | 40,740 | 40,355 | ||||||
| Deferred income tax recovery | (8,009 | ) | (9,506 | ) | ||||
| Inventory impairment | 22,000 | — | ||||||
| Defined benefit pension plans and other post-retirement benefit plan expense (income) | (79 | ) | 169 | |||||
| Stock compensation expense | 788 | 1,006 | ||||||
| Foreign exchange transaction losses (gains) | (4,640 | ) | 8,418 | |||||
| Other | (212 | ) | 1,628 | |||||
| Changes in working capital | ||||||||
| Accounts receivable | (32,032 | ) | (16,798 | ) | ||||
| Inventories | (35,130 | ) | (6,891 | ) | ||||
| Accounts payable and accrued expenses | 12,666 | 28,432 | ||||||
| Prepaid expenses and other | (29,762 | ) | (27,463 | ) | ||||
| Net cash used in operating activities | (85,666 | ) | (2,989 | ) | ||||
| Cash flows from (used in) investing activities | ||||||||
| Purchase of property, plant and equipment | (13,166 | ) | (20,082 | ) | ||||
| Other | 341 | 222 | ||||||
| Net cash used in investing activities | (12,825 | ) | (19,860 | ) | ||||
| Cash flows from (used in) financing activities | ||||||||
| Proceeds from revolving credit facilities, net | 5,848 | 21,754 | ||||||
| Payment of finance lease obligations | (3,563 | ) | (2,508 | ) | ||||
| Other | (527 | ) | — | |||||
| Net cash from financing activities | 1,758 | 19,246 | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (531 | ) | 151 | |||||
| Net decrease in cash, cash equivalents and restricted cash | (97,264 | ) | (3,452 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 186,805 | 184,925 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 89,541 | $ | 181,473 | ||||
| MERCER INTERNATIONAL INC. COMPUTATION OF OPERATING EBITDA (Unaudited) (In thousands) |
Operating EBITDA is defined as operating income (loss) plus depreciation and amortization and long-lived asset impairment charges. Management uses Operating EBITDA as a benchmark measurement of its own operating results, and as a benchmark relative to its competitors. Management considers it to be a meaningful supplement to operating income (loss) as a performance measure primarily because depreciation expense and long-lived asset impairment charges are not actual cash costs, and depreciation expense varies widely from company to company in a manner that management considers largely independent of the underlying cost efficiency of our operating facilities. In addition, management believes Operating EBITDA is commonly used by securities analysts, investors and other interested parties to evaluate our financial performance.
Operating EBITDA does not reflect the impact of a number of items that affect our net income (loss), including financing costs, income taxes and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income (loss) or operating income (loss) as a measure of performance, nor as an alternative to net cash from (used in) operating activities as a measure of liquidity. Operating EBITDA is an internal measure and therefore may not be comparable to other companies.
Operating EBITDA is a non-GAAP financial measure at the consolidated level and is considered different from Operating EBITDA at the segment level, referred to as "Segment Operating EBITDA", which is our single measure of segment profit or loss presented in our financial statements under GAAP. For more information on Segment Operating EBITDA, refer to the segment information note within our consolidated financial statements.
The following table sets forth a reconciliation of net loss to Operating EBITDA for the periods indicated:
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| Net loss | $ | (51,996 | ) | $ | (308,700 | ) | $ | (22,339 | ) | ||
| Income tax provision (recovery) | (8,177 | ) | 2,587 | 732 | |||||||
| Interest expense | 29,101 | 29,762 | 28,155 | ||||||||
| Other expenses (income) | (1,820 | ) | (2,138 | ) | 185 | ||||||
| Operating income (loss) | (32,892 | ) | (278,489 | ) | 6,733 | ||||||
| Add: Depreciation and amortization | 40,740 | 42,658 | 40,355 | ||||||||
| Add: Impairments of long-lived assets | — | 215,682 | — | ||||||||
| Operating EBITDA | $ | 7,848 | $ | (20,149 | ) | $ | 47,088 | ||||
