Mercer International Inc. Reports Fourth Quarter 2025 and Year End 2025 Results
Rhea-AI Summary
Mercer International (Nasdaq: MERC) reported Q4 2025 Operating EBITDA of negative $20.1M and a Q4 net loss of $308.7M ($4.61/sh), which included $238.7M of non‑cash impairments (Peace River long‑lived assets $203.5M). Full‑year 2025 Operating EBITDA was negative $22.0M with net loss $497.9M. Revenues fell ~8% to $449.5M in Q4. Management cited ~$30M of One Goal One Hundred savings in 2025, a mass timber order book of ~$163M, cash flow from operations up ~$76M QoQ and liquidity improvement of >$50M in Q4.
Positive
- One Goal One Hundred savings of approximately $30 million in 2025
- Mass timber order book totaling approximately $163 million
- Cash flow from operations improved by approximately $76 million QoQ
- Liquidity improved by over $50 million in Q4 2025
Negative
- Q4 net loss of $308.7 million (includes non‑cash impairments)
- Total non‑cash impairments of $238.7 million
- Full year 2025 Operating EBITDA negative $22.0 million
- Q4 revenues declined ~8% to $449.5 million
News Market Reaction – MERC
In the Feb 13 session, MERC gained 4.71%, reflecting a moderate positive market reaction. Argus tracked a peak move of +16.7% during that session. Argus tracked a trough of -5.9% from its starting point during tracking. Our momentum scanner triggered 13 alerts that day, indicating notable trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jan 22 | Earnings call notice | Neutral | +0.4% | Announced timing and access details for Q4 2025 earnings call. |
| Dec 18 | Carbon capture update | Positive | +4.2% | Peace River CO₂ capture demonstration unit began operations with Svante. |
| Nov 18 | Investor conferences | Neutral | +1.9% | CFO participation in BofA and UBS investor conferences in early December. |
| Nov 06 | Q3 2025 earnings | Negative | -2.1% | Reported negative Operating EBITDA and wider net loss with impairments. |
| Oct 20 | Earnings call notice | Neutral | +0.4% | Announced schedule and access for Q3 2025 results call. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent news has mostly produced modest, directionally consistent price moves, with earnings-related negatives drawing the clearest downside reaction.
Over the past six months, MERC’s news flow has centered on earnings pressure and capital markets visibility. The Q3 2025 report showed negative Operating EBITDA and sizable inventory impairments, and today’s Q4 2025 release extends that trend with larger losses and additional non-cash charges. Conference-call notices in October and January and a December 18, 2025 carbon capture update had only modest positive price effects, suggesting investors were already focused on deteriorating pulp markets and rising costs.
Key Terms
operating ebitda financial
cross-laminated timber technical
glue-laminated timber technical
section 232 regulatory
nbsk technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
Selected Highlights
- Fourth quarter Operating EBITDA* was negative
$20.1 million (net loss of$308.7 million ) compared to negative$28.1 million (net loss of$80.8 million) in the third quarter of 2025 - Full year 2025 Operating EBITDA was negative
$22.0 million (net loss of$497.9 million ) compared to positive$243.7 million (net loss of$85.1 million ) in 2024 - Included in net loss for the fourth quarter are total non-cash impairments of
$238.7 million , primarily on long-lived assets at our Peace River mill due to the continued down-cycle environment in hardwood pulp markets and on pulp inventory due to low prices and high fiber costs - "One Goal One Hundred" program remains on track, with approximately
$30.0 million in cost savings and operational efficiencies in 2025 - Despite the challenging environment, cash flow from operations increased by approximately
$76.0 million from the prior quarter - Mass timber order book has continued to grow, including through securing contracts relating to large-scale data center projects
NEW YORK, Feb. 12, 2026 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) today reported fourth quarter 2025 Operating EBITDA of negative
In the fourth quarter of 2025, net loss was
Mr. Juan Carlos Bueno, Chief Executive Officer, stated: "To address the challenging hardwood pulp environment that has weighed on our Peace River mill’s results, we have engaged with all stakeholders and several initiatives have been underway. These include shifting production mix at the mill further towards softwood and engaging government on accretive opportunities surrounding energy and carbon capture. We are considering all options in respect of this asset.
Despite the non-cash impairments and the challenging business climate, our underlying operational performance improved quarter-over-quarter, reflecting our focus on cost reduction and efficiency initiatives. These will remain a key focus in 2026.
We continue to advance our "One Goal One Hundred" program launched in the second quarter of 2025. The program includes cost reduction initiatives and operational efficiency measures targeting
In the fourth quarter of 2025, softwood pulp third-party list prices in Europe were relatively stable, while North American list prices and third-party net prices in China decreased compared to the third quarter of 2025. The decreases in these markets primarily resulted from continued weak demand stemming from the current economic climate and continuing global trade policy uncertainty. For hardwood pulp, the third-party net price in China increased in the fourth quarter of 2025 compared to the third quarter, driven by strengthening demand and higher domestic fiber costs. In North America, hardwood pulp third-party list prices remained flat. We currently expect pulp prices to modestly increase in all our markets in the first quarter of 2026 due to stable demand and global supply constraints.
Our lumber sales realizations in Europe were relatively steady in the fourth quarter of 2025 compared to the third quarter of 2025. Our lumber sales realizations in the U.S. were modestly lower in the fourth quarter of 2025 due to weak demand. We currently expect U.S. and European lumber prices to modestly increase in the first quarter of 2026. The expected increase in U.S. prices stems from reduced overall supply, including lower production from Canadian producers, and the expected price increase in Europe due to rising fiber costs.
In October 2025, the U.S. imposed a
Per unit fiber costs for our pulp and solid wood segments remained relatively steady in the fourth quarter of 2025 compared to the third quarter. We currently expect per unit fiber costs to increase across our segments in the first quarter of 2026 due to supply constraints.
In the fourth quarter of 2025, our pulp mills had 21 days of planned annual maintenance downtime (approximately 41,500 ADMTs). There is currently no annual maintenance downtime planned in the first quarter of 2026.
While our overall solid wood segment remains pressured by high interest rates in the U.S. and by European economic headwinds, we anticipate a strong recovery as the rate environment eases and supply constraints amplify pricing once pent-up demand returns to the market. Within this segment, our mass timber business has achieved significant growth since the last quarter, backed by a strong pipeline of projects and an order book of contracts and commitments totaling approximately
Mr. Bueno concluded: "During the fourth quarter, the macro challenges we faced through 2025 continued. In this dynamic environment, we continue to prioritize improving liquidity and working capital, committing to rebalancing our asset portfolio and maintaining operating discipline in order to outperform the current macro environment. These efforts improved liquidity by over
_________________
*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
| Q4 | Q3 | Q4 | YTD | YTD | |||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||
| Revenues | $ | 449,504 | $ | 458,068 | $ | 488,405 | $ | 1,868,070 | $ | 2,043,360 | |||||||||
| Operating income (loss) | $ | (278,489 | ) | $ | (67,589 | ) | $ | 50,393 | $ | (397,749 | ) | $ | 15,007 | ||||||
| Operating EBITDA | $ | (20,149 | ) | $ | (28,077 | ) | $ | 99,227 | $ | (22,019 | ) | $ | 243,722 | ||||||
| Net income (loss) | $ | (308,700 | ) | $ | (80,779 | ) | $ | 16,707 | $ | (497,889 | ) | $ | (85,141 | ) | |||||
| Net income (loss) per common share | |||||||||||||||||||
| Basic | $ | (4.61 | ) | $ | (1.21 | ) | $ | 0.25 | $ | (7.44 | ) | $ | (1.27 | ) | |||||
| Diluted | $ | (4.61 | ) | $ | (1.21 | ) | $ | 0.25 | $ | (7.44 | ) | $ | (1.27 | ) | |||||
Consolidated – Three Months Ended December 31, 2025 Compared to Three Months Ended December 31, 2024
Total revenues for the fourth quarter of 2025 decreased by approximately
Costs and expenses in the fourth quarter of 2025 increased by approximately
In the fourth quarter of 2025, Operating EBITDA decreased to negative
Segment Results
Pulp
| Three Months Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| (in thousands) | |||||||
| Pulp revenues | $ | 315,532 | $ | 351,181 | |||
| Energy and chemical revenues | $ | 18,722 | $ | 24,332 | |||
| Segment Operating EBITDA(1) | $ | (11,323 | ) | $ | 106,130 | ||
______________
(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 fourth quarter of 2025, Segment Operating EBITDA decreased to negative
Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the fourth quarter of 2025 decreased by approximately
Pulp revenues in the fourth quarter of 2025 decreased by approximately
In the fourth quarter of 2025, third-party industry quoted average list prices for NBSK pulp in Europe were relatively stable while the North American list price and the China net price decreased compared to the same quarter of 2024. These decreases stemmed from weaker demand driven by the current economic climate and global trade policy uncertainty. Our average NBSK pulp sales realizations in the fourth quarter of 2025 decreased by approximately
In the fourth quarter of 2025, the third-party industry quoted average list price for NBHK pulp in North America decreased from the same quarter of 2024 due to downward price pressure from other markets. The third-party industry quoted average net price for NBHK pulp in China modestly decreased in the fourth quarter of 2025 from the same quarter of 2024 due to continued weak demand driven by the current economic climate and global trade policy uncertainty. In the fourth quarter of 2025, average NBHK pulp sales realizations decreased by approximately
Total pulp sales volumes in the fourth quarter of 2025 increased by approximately
Energy and chemical revenues in the fourth quarter of 2025 decreased by approximately
Costs and expenses in the fourth quarter of 2025 were
Total pulp production in the fourth quarter of 2025 remained relatively flat at 460,002 ADMTs compared to 466,635 ADMTs in the same quarter of 2024. In the fourth quarter of 2025, our pulp mills had 21 days of planned annual maintenance downtime (approximately 41,500 ADMTs). In the same quarter of 2024, our pulp mills had 30 days of unplanned downtime (approximately 45,300 ADMTs) at our Celgar and Peace River mills.
On average, in the fourth quarter of 2025, overall per unit fiber costs increased by approximately
Solid Wood
| Three Months Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| (in thousands) | |||||||
| Lumber revenues | $ | 54,883 | $ | 58,586 | |||
| Manufactured products revenues(1) | $ | 14,057 | $ | 12,673 | |||
| Pallet revenues | $ | 23,711 | $ | 23,100 | |||
| Biofuels revenues(2) | $ | 9,952 | $ | 11,411 | |||
| Energy revenues | $ | 4,990 | $ | 4,780 | |||
| Wood residuals revenues | $ | 2,623 | $ | 1,087 | |||
| Segment Operating EBITDA(3) | $ | (10,771 | ) | $ | (4,686 | ) | |
______________
(1) Manufactured products primarily includes cross-laminated timber ("CLT") and glue-laminated timber ("glulam").
(2) Biofuels includes 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 fourth quarter of 2025, Segment Operating EBITDA decreased to negative
Solid wood segment revenues in the fourth quarter of 2025 remained relatively flat at
Lumber revenues in the fourth quarter of 2025 decreased by approximately
Lumber sales volumes in the fourth quarter of 2025 decreased by approximately
Manufactured products revenues in the fourth quarter of 2025 increased by approximately
Lumber production in the fourth quarter of 2025 decreased by approximately
In the fourth quarter of 2025, we recognized a non-cash impairment of
Fiber costs were approximately
Consolidated – Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Total revenues in 2025 decreased by approximately
Costs and expenses in 2025 modestly increased to
In 2025, costs and expenses included an aggregate of non-cash impairments of
In 2025, Operating EBITDA decreased to negative
Liquidity
As of December 31, 2025, we had cash and cash equivalents of
The following table is a summary of selected financial information as of the dates indicated:
| As of December 31, | |||||||
| 2025 | 2024 | ||||||
| (in thousands) | |||||||
| Cash and cash equivalents | $ | 186,805 | $ | 184,925 | |||
| Working capital | $ | 582,176 | $ | 653,466 | |||
| Total assets | $ | 2,041,420 | $ | 2,262,932 | |||
| Long-term liabilities | $ | 1,689,734 | $ | 1,576,619 | |||
| Total shareholders' equity | $ | 68,060 | $ | 429,775 | |||
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 February 13, 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/57o3vzzc 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, 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
| Q4 | Q3 | Q4 | YTD | YTD | |||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||
| Revenues from external customers | |||||||||||||||||||
| Pulp segment | $ | 334,254 | $ | 339,038 | $ | 375,513 | $ | 1,386,680 | $ | 1,548,556 | |||||||||
| Solid wood segment | 110,216 | 117,234 | 111,637 | 467,438 | 485,991 | ||||||||||||||
| Corporate and other | 5,034 | 1,796 | 1,255 | 13,952 | 8,813 | ||||||||||||||
| Total revenues | $ | 449,504 | $ | 458,068 | $ | 488,405 | $ | 1,868,070 | $ | 2,043,360 | |||||||||
| Pulp Segment Operating EBITDA(1) | $ | (11,323 | ) | $ | (12,686 | ) | $ | 106,130 | $ | 15,601 | $ | 260,914 | |||||||
| Solid wood Segment Operating EBITDA(1) | (10,771 | ) | (9,268 | ) | (4,686 | ) | (25,192 | ) | (4,390 | ) | |||||||||
| Corporate and other | 1,945 | (6,123 | ) | (2,217 | ) | (12,428 | ) | (12,802 | ) | ||||||||||
| Operating EBITDA(2) | $ | (20,149 | ) | $ | (28,077 | ) | $ | 99,227 | $ | (22,019 | ) | $ | 243,722 | ||||||
| Net income (loss) | $ | (308,700 | ) | $ | (80,779 | ) | $ | 16,707 | $ | (497,889 | ) | $ | (85,141 | ) | |||||
| Net income (loss) per common share | |||||||||||||||||||
| Basic | $ | (4.61 | ) | $ | (1.21 | ) | $ | 0.25 | $ | (7.44 | ) | $ | (1.27 | ) | |||||
| Diluted | $ | (4.61 | ) | $ | (1.21 | ) | $ | 0.25 | $ | (7.44 | ) | $ | (1.27 | ) | |||||
| Common shares outstanding at period end | 66,983 | 66,983 | 66,871 | 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 income (loss) to Operating EBITDA.
Summary Operating Highlights
| Q4 | Q3 | Q4 | YTD | YTD | |||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||
| Pulp Segment | |||||||||||||||||||
| Pulp production ('000 ADMTs) | |||||||||||||||||||
| NBSK | 378.0 | 366.7 | 403.7 | 1,518.4 | 1,589.1 | ||||||||||||||
| NBHK | 82.0 | 92.0 | 63.0 | 316.4 | 254.0 | ||||||||||||||
| Annual maintenance downtime ('000 ADMTs) | 41.5 | 21.3 | — | 125.7 | 86.9 | ||||||||||||||
| Annual maintenance downtime (days) | 21 | 20 | — | 86 | 57 | ||||||||||||||
| Pulp sales ('000 ADMTs) | |||||||||||||||||||
| NBSK | 367.0 | 385.9 | 405.5 | 1,502.4 | 1,647.5 | ||||||||||||||
| NBHK | 105.4 | 67.0 | 46.5 | 327.4 | 252.3 | ||||||||||||||
| Average NBSK pulp prices ($/ADMT)(1) | |||||||||||||||||||
| Europe | 1,498 | 1,497 | 1,500 | 1,525 | 1,519 | ||||||||||||||
| China | 671 | 690 | 767 | 722 | 774 | ||||||||||||||
| North America | 1,568 | 1,700 | 1,687 | 1,710 | 1,646 | ||||||||||||||
| Average NBHK pulp prices ($/ADMT)(1) | |||||||||||||||||||
| China | 540 | 503 | 548 | 539 | 645 | ||||||||||||||
| North America | 1,198 | 1,203 | 1,298 | 1,245 | 1,356 | ||||||||||||||
| Average pulp sales realizations ($/ADMT)(2) | |||||||||||||||||||
| NBSK | 702 | 728 | 794 | 743 | 784 | ||||||||||||||
| NBHK | 528 | 528 | 578 | 549 | 637 | ||||||||||||||
| Energy production ('000 MWh)(3) | 500.4 | 490.5 | 545.1 | 2,029.1 | 2,125.3 | ||||||||||||||
| Energy sales ('000 MWh)(3) | 166.0 | 171.1 | 204.7 | 718.9 | 797.2 | ||||||||||||||
| Average energy sales realizations ($/MWh)(3) | 97 | 98 | 105 | 97 | 91 | ||||||||||||||
| Solid Wood Segment | |||||||||||||||||||
| Lumber | |||||||||||||||||||
| Production (MMfbm) | 108.6 | 115.4 | 114.7 | 472.2 | 475.6 | ||||||||||||||
| Sales (MMfbm) | 103.0 | 110.2 | 123.6 | 464.8 | 470.4 | ||||||||||||||
| Average sales realizations ($/Mfbm) | 533 | 553 | 474 | 533 | 462 | ||||||||||||||
| Energy | |||||||||||||||||||
| Production and sales ('000 MWh) | 35.5 | 32.7 | 36.1 | 137.0 | 126.3 | ||||||||||||||
| Average sales realizations ($/MWh) | 141 | 150 | 133 | 139 | 131 | ||||||||||||||
| Manufactured products(4) | |||||||||||||||||||
| Production ('000 cubic meters) | 6.5 | 9.2 | 5.8 | 30.5 | 34.0 | ||||||||||||||
| Sales ('000 cubic meters) | 6.5 | 6.8 | 5.7 | 27.3 | 30.7 | ||||||||||||||
| Average sales realizations ($/cubic meter) | 1,805 | 1,615 | 1,880 | 1,834 | 3,006 | ||||||||||||||
| Pallets | |||||||||||||||||||
| Production ('000 units) | 1,836.6 | 2,265.2 | 2,113.8 | 8,331.1 | 10,243.5 | ||||||||||||||
| Sales ('000 units) | 2,020.8 | 2,144.5 | 2,155.8 | 8,542.2 | 10,089.2 | ||||||||||||||
| Average sales realizations ($/unit) | 12 | 12 | 11 | 12 | 10 | ||||||||||||||
| Biofuels(5) | |||||||||||||||||||
| Production ('000 tonnes) | 38.2 | 33.3 | 40.8 | 141.3 | 160.4 | ||||||||||||||
| Sales ('000 tonnes) | 35.8 | 39.8 | 52.2 | 135.5 | 184.4 | ||||||||||||||
| Average sales realizations ($/tonne) | 278 | 256 | 218 | 254 | 217 | ||||||||||||||
| Average Spot Currency Exchange Rates | |||||||||||||||||||
| $ / €(6) | 1.1641 | 1.1685 | 1.0668 | 1.1306 | 1.0820 | ||||||||||||||
| $ / C$(6) | 0.7175 | 0.7261 | 0.7151 | 0.7159 | 0.7302 | ||||||||||||||
______________
(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) Does not include our
(4) Manufactured products primarily includes CLT and glulam.
(5) Biofuels includes pellets and briquettes.
(6) Average Federal Reserve Bank of New York Noon Buying Rates over the reporting period.
| MERCER INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | 449,504 | $ | 488,405 | $ | 1,868,070 | $ | 2,043,360 | ||||||||
| Costs and expenses | ||||||||||||||||
| Cost of sales, excluding depreciation and amortization | 444,250 | 363,456 | 1,775,941 | 1,683,456 | ||||||||||||
| Cost of sales depreciation and amortization | 42,577 | 48,769 | 159,757 | 170,542 | ||||||||||||
| Selling, general and administrative expenses | 25,484 | 25,787 | 114,439 | 116,433 | ||||||||||||
| Impairments of long-lived assets | 215,682 | — | 215,682 | — | ||||||||||||
| Loss on disposal of investment in joint venture | — | — | — | 23,645 | ||||||||||||
| Goodwill impairment | — | — | — | 34,277 | ||||||||||||
| Operating income (loss) | (278,489 | ) | 50,393 | (397,749 | ) | 15,007 | ||||||||||
| Other income (expenses) | ||||||||||||||||
| Interest expense | (29,762 | ) | (28,319 | ) | (114,834 | ) | (109,150 | ) | ||||||||
| Other income (expenses) | 2,138 | (1,919 | ) | 1,372 | 7,228 | |||||||||||
| Total other expenses, net | (27,624 | ) | (30,238 | ) | (113,462 | ) | (101,922 | ) | ||||||||
| Income (loss) before income taxes | (306,113 | ) | 20,155 | (511,211 | ) | (86,915 | ) | |||||||||
| Income tax recovery (provision) | (2,587 | ) | (3,448 | ) | 13,322 | 1,774 | ||||||||||
| Net income (loss) | $ | (308,700 | ) | $ | 16,707 | $ | (497,889 | ) | $ | (85,141 | ) | |||||
| Net income (loss) per common share | ||||||||||||||||
| Basic | $ | (4.61 | ) | $ | 0.25 | $ | (7.44 | ) | $ | (1.27 | ) | |||||
| Diluted | $ | (4.61 | ) | $ | 0.25 | $ | (7.44 | ) | $ | (1.27 | ) | |||||
| Dividends declared per common share | $ | — | $ | 0.075 | $ | 0.150 | $ | 0.300 | ||||||||
| MERCER INTERNATIONAL INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 186,805 | $ | 184,925 | ||||
| Accounts receivable, net | 298,889 | 327,345 | ||||||
| Inventories | 359,401 | 361,682 | ||||||
| Prepaid expenses and other | 20,707 | 17,601 | ||||||
| Assets classified as held for sale | — | 18,451 | ||||||
| Total current assets | 865,802 | 910,004 | ||||||
| Property, plant and equipment, net | 1,115,490 | 1,254,715 | ||||||
| Amortizable intangible assets, net | 26,110 | 49,829 | ||||||
| Operating lease right-of-use assets | 6,818 | 7,598 | ||||||
| Pension asset | 12,975 | 9,378 | ||||||
| Deferred income tax assets | 7,839 | 17,778 | ||||||
| Other long-term assets | 6,386 | 13,630 | ||||||
| Total assets | $ | 2,041,420 | $ | 2,262,932 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other | $ | 282,881 | $ | 248,661 | ||||
| Pension and other post-retirement benefit obligations | 745 | 732 | ||||||
| Liabilities associated with assets held for sale | — | 7,145 | ||||||
| Total current liabilities | 283,626 | 256,538 | ||||||
| Long-term debt | 1,605,144 | 1,473,986 | ||||||
| Pension and other post-retirement benefit obligations | 10,392 | 11,134 | ||||||
| Operating lease liabilities | 3,858 | 4,793 | ||||||
| Deferred income tax liabilities | 58,298 | 74,772 | ||||||
| Other long-term liabilities | 12,042 | 11,934 | ||||||
| Total liabilities | 1,973,360 | 1,833,157 | ||||||
| Shareholders’ equity | ||||||||
| Common shares | 66,871 | 66,850 | ||||||
| Additional paid-in capital | 365,357 | 362,782 | ||||||
| Retained earnings (accumulated deficit) | (277,016 | ) | 230,912 | |||||
| Accumulated other comprehensive loss | (87,152 | ) | (230,769 | ) | ||||
| Total shareholders’ equity | 68,060 | 429,775 | ||||||
| Total liabilities and shareholders’ equity | $ | 2,041,420 | $ | 2,262,932 | ||||
| MERCER INTERNATIONAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||||||
| For the Year Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cash flows from (used in) operating activities | ||||||||||||
| Net loss | $ | (497,889 | ) | $ | (85,141 | ) | $ | (242,056 | ) | |||
| Adjustments to reconcile net loss to cash flows from operating activities | ||||||||||||
| Depreciation and amortization | 160,048 | 170,793 | 172,502 | |||||||||
| Deferred income tax recovery | (11,318 | ) | (35,721 | ) | (36,392 | ) | ||||||
| Inventory impairment | 54,400 | 9,000 | 58,600 | |||||||||
| Impairments of long-lived assets | 215,682 | — | — | |||||||||
| Impairment of sandalwood business | — | — | 33,734 | |||||||||
| Loss on disposal of investment in joint venture | — | 23,645 | — | |||||||||
| Goodwill impairment | — | 34,277 | — | |||||||||
| Defined benefit pension plans and other post-retirement benefit plan expense | 692 | 1,272 | 5,214 | |||||||||
| Stock compensation expense | 2,285 | 3,859 | 5,922 | |||||||||
| Foreign exchange transaction losses (gains) | 16,390 | (8,311 | ) | 3,905 | ||||||||
| Other | 7,107 | 2,087 | (5,092 | ) | ||||||||
| Defined benefit pension plans and other post-retirement benefit plan contributions, net of withdrawals | 3,025 | (675 | ) | (1,152 | ) | |||||||
| Changes in working capital | ||||||||||||
| Accounts receivable | 52,588 | (32,094 | ) | 52,507 | ||||||||
| Inventories | 526 | 23,907 | (15,836 | ) | ||||||||
| Accounts payable and accrued expenses | 7,162 | (17,680 | ) | (98,182 | ) | |||||||
| Prepaid expenses and other | (2,111 | ) | 986 | (2,679 | ) | |||||||
| Net cash from (used in) operating activities | 8,587 | 90,204 | (69,005 | ) | ||||||||
| Cash flows from (used in) investing activities | ||||||||||||
| Purchase of property, plant and equipment | (88,583 | ) | (84,318 | ) | (136,324 | ) | ||||||
| Proceeds from sale of property, plant and equipment | 6,383 | 19,874 | 3,408 | |||||||||
| Acquisition, net of cash acquired | — | — | (82,100 | ) | ||||||||
| Property insurance proceeds | — | 773 | 12,203 | |||||||||
| Proceeds from government grants | 3,357 | 787 | 5,569 | |||||||||
| Other | (2,483 | ) | (4,108 | ) | (2,623 | ) | ||||||
| Net cash used in investing activities | (81,326 | ) | (66,992 | ) | (199,867 | ) | ||||||
| Cash flows from (used in) financing activities | ||||||||||||
| Redemption of senior notes | — | (300,000 | ) | — | ||||||||
| Proceeds from issuance of senior notes | — | 206,000 | 200,000 | |||||||||
| Proceeds from (repayment of) revolving credit facilities, net | 102,888 | (25,061 | ) | 61,272 | ||||||||
| Dividend payments | (10,039 | ) | (20,060 | ) | (19,950 | ) | ||||||
| Payment of debt issuance costs | — | (4,515 | ) | (4,865 | ) | |||||||
| Payment of finance lease obligations | (13,181 | ) | (8,918 | ) | (7,785 | ) | ||||||
| Other | 138 | (229 | ) | (48 | ) | |||||||
| Net cash from (used in) financing activities | 79,806 | (152,783 | ) | 228,624 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | (5,187 | ) | 504 | 208 | ||||||||
| Net increase (decrease) in cash and cash equivalents | 1,880 | (129,067 | ) | (40,040 | ) | |||||||
| Cash and cash equivalents, beginning of year | 184,925 | 313,992 | 354,032 | |||||||||
| Cash and cash equivalents, end of year | $ | 186,805 | $ | 184,925 | $ | 313,992 | ||||||
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 income (loss) to Operating EBITDA for the periods indicated:
| Q4 | Q3 | Q4 | YTD | YTD | |||||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||
| Net income (loss) | $ | (308,700 | ) | $ | (80,779 | ) | $ | 16,707 | $ | (497,889 | ) | $ | (85,141 | ) | |||||
| Income tax provision (recovery) | 2,587 | (14,777 | ) | 3,448 | (13,322 | ) | (1,774 | ) | |||||||||||
| Interest expense | 29,762 | 28,506 | 28,319 | 114,834 | 109,150 | ||||||||||||||
| Other expenses (income) | (2,138 | ) | (539 | ) | 1,919 | (1,372 | ) | (7,228 | ) | ||||||||||
| Operating income (loss) | (278,489 | ) | (67,589 | ) | 50,393 | (397,749 | ) | 15,007 | |||||||||||
| Add: Depreciation and amortization | 42,658 | 39,512 | 48,834 | 160,048 | 170,793 | ||||||||||||||
| Add: Impairments of long-lived assets | 215,682 | — | — | 215,682 | — | ||||||||||||||
| Add: Loss on disposal of investment in joint venture | — | — | — | — | 23,645 | ||||||||||||||
| Add: Goodwill impairment | — | — | — | — | 34,277 | ||||||||||||||
| Operating EBITDA | $ | (20,149 | ) | $ | (28,077 | ) | $ | 99,227 | $ | (22,019 | ) | $ | 243,722 | ||||||
