Mercer International Inc. Reports Second Quarter 2026 Results
Rhea-AI Summary
Mercer International (Nasdaq: MERC) reported second quarter 2026 revenues of $460.3 million, roughly flat year over year, with an operating loss of $59.0 million and Operating EBITDA of negative $21.0 million, including a non-cash inventory impairment of $29.0 million. Net loss was $76.0 million or $1.13 per share, compared to a net loss of $86.1 million or $1.29 per share in the prior-year quarter and $52.0 million or $0.78 per share in Q1 2026.
Mercer continued its “One Goal One Hundred” cost program, delivering $13.0 million of additional savings in the quarter and approximately $54.0 million since April 2025 toward a $100 million year-end target. The company is pursuing strategic alternatives to address debt maturities, enhance liquidity and strengthen its capital structure, including discussions with holders of its 2028 and 2029 senior notes, though no agreements have been reached.
At the Torgau facility, Mercer is implementing operational restructuring, including an expected reduction of about 350 positions by Q2 2027, with an initial cut of approximately 100 contractor roles completed in July 2026. The pulp segment posted Segment Operating EBITDA of negative $12.7 million, impacted by higher per unit fiber costs and lower NBSK sales realizations, partly offset by lower planned maintenance downtime and cost reductions. The mass timber business had a robust order book of approximately $151 million at quarter-end, largely tied to data center projects expected to begin contributing from late 2026 into 2027.
Positive
- Revenues $460.3M, relatively steady versus $453.5M in Q2 2025
- Net loss improved to $76.0M from $86.1M year over year
- “One Goal One Hundred” program achieved $54.0M savings since April 2025
- Quarterly cost savings of $13.0M in Q2 2026
- Pulp sales volumes up about 6% to 450,329 ADMTs year over year
- Mass timber order book of approximately $151M at Q2 2026 end
Negative
- Q2 2026 Operating EBITDA of –$21.0M, slightly worse than –$20.9M a year ago
- Q2 2026 net loss of $76.0M versus $52.0M in Q1 2026
- Non-cash inventory impairment of $29.0M in the quarter
- Higher per unit fiber costs, up about 14% year over year in pulp segment
- Strategic production reductions at German pulp mills due to high fiber prices
- Torgau restructuring to reduce approximately 350 positions by Q2 2027
News Explained
The
Sources and calculations
- Mercer International second-quarter 2026 results release (2026-08-06)
- Mercer International first-quarter 2026 fundamentals (2026-03-31)
- Cash and equivalents vs quarterly operating cash outflow, in days of cash use $84,541,000 / ($85,666,000 / 90) = [object Object]
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 07 | Q1 earnings | Negative | -11.7% | Reported negative EBITDA and net loss amid inventory impairment and financing concerns. |
| Nov 06 | Q3 earnings | Negative | -2.1% | Reported negative EBITDA, net loss, impairment, and higher operating costs. |
| Jul 31 | Q2 earnings | Negative | -18.6% | Reported negative EBITDA, net loss, dividend suspension, and weaker pulp demand. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
The three tag-matched earnings events all had negative 24-hour reactions, averaging -10.81%, indicating consistent downside alignment.
Key Terms
operating ebitda financial
non-cash inventory impairment financial
nbsk technical
AI-generated analysis. How Rhea-AI works. Not financial advice.
Selected Highlights
- Second quarter Operating EBITDA* of negative
$21.0 million (net loss of$76.0 million ), including a non-cash inventory impairment of$29.0 million , compared to negative$20.9 million (net loss of$86.1 million ) in the same quarter of 2025 - Implementing operational restructuring at the Torgau facility to align its capacity and operational profile to current market conditions, with the goal of ensuring an economically viable future for the facility
- Continued efforts to improve our balance sheet and optimize working capital. "One Goal One Hundred" program remains on track to achieve
$100 million of cost savings and operational efficiencies by year end, with additional cost savings of$13.0 million in second quarter and a total of approximately$54.0 million to date since launch in April 2025 - Engaged advisors and key stakeholders to pursue and evaluate a range of strategic alternatives to address debt maturities, enhance liquidity and strengthen our capital structure
NEW YORK, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) today reported second quarter 2026 Operating EBITDA of negative
In the second quarter of 2026, net loss was
Mr. Juan Carlos Bueno, Chief Executive Officer, stated: "Our pulp sales realizations remained steady this quarter, as continued economic uncertainty delayed market recovery. Our second quarter results were also weighed down by rising European fiber costs, driven by regional supply shortages and intense competition for sawmill residuals from energy producers. As a result, we recognized a non-cash impairment of
In response to ongoing economic uncertainty and weak market conditions, we have been actively evaluating strategic alternatives and are proactively taking steps to enhance our liquidity and strengthen our balance sheet. As previously announced, our existing special committee of independent directors continues to oversee, review, and evaluate the development and implementation of potential alternatives to improve our capital structure.
To assist in these matters, we have engaged advisors to review strategic alternatives and broader financing initiatives. As part of this process, we have entered into discussions with holders of our 2028 and 2029 senior notes, as well as other stakeholders across our capital structure, regarding potential financing and other liquidity-enhancing transactions. These discussions remain ongoing and we continue to evaluate a range of alternatives with the objective of achieving a comprehensive solution that supports our long-term business plan. No agreement has been reached with any stakeholder group, and there can be no assurance the discussions referenced above will result in any particular transaction or that any transaction, if pursued, will be completed.
We continue to pursue our "One Goal One Hundred" program and remain confident that we will achieve our targeted
Like many industry participants, Mercer Torgau has been impacted by global economic uncertainty and heightened raw material and energy costs. To address these dynamics, the facility has taken various comprehensive measures to enhance operations, including the installation of new scanning technology to increase production of higher-value, on-grade dimensional lumber and expand exports to the U.S. It also recently announced additional strategic actions designed to align its capacity and operational profile with market conditions. These include a reduction in its workforce and adjustments to its product portfolio. An initial reduction of approximately 100 contractor positions was completed in July 2026, and Mercer Torgau expects an overall workforce reduction of approximately 350 positions as the initiative is completed in stages through the second quarter of 2027.
Looking ahead, ongoing geopolitical conflicts, including in the Middle East and Ukraine, are expected to exert inflationary pressures on fiber, freight and other production costs for our pulp and solid wood segments. While direct tariff impacts have been immaterial to date, we continue to monitor events as indirect impacts reshape global supply dynamics. On the supply-side, we are starting to see responses to prevailing market conditions, supporting our current expectation of more balanced markets toward the end of 2026.
Per unit fiber costs for our pulp and solid wood segments increased in the second quarter of 2026 compared to the first quarter of 2026, driven by supply constraints and strong demand in Germany. For the third quarter of 2026, per unit fiber costs are expected to remain elevated at our German mills with a slight increase at our pulp mills. This increase is driven by continued strong demand for wood as an energy source as a result of ongoing geopolitical conflicts. We expect to see a modest decrease in per unit fiber costs at our sawmills and Canadian pulp mills as regional curtailments improve their fiber supply.
We had relatively stable pulp production in the second quarter of 2026 compared to the first quarter. However, we strategically reduced production at our German mills by approximately 26,000 tonnes due to fiber constraints and expect these reductions to continue into the third quarter. We had no annual planned maintenance downtime in the second quarter of 2026 and expect a total of 40 days of annual planned maintenance downtime at our pulp mills in the third quarter of 2026.
In the second quarter of 2026, overall pulp prices were relatively steady compared to the first quarter of 2026 as weak demand was balanced by scheduled maintenance and curtailments. Looking ahead to the third quarter, we expect softwood pulp prices across all our markets to be slightly lower as the positive impacts of recent supply reductions are offset by lower seasonal demand. We expect hardwood pulp pricing to modestly decrease in the third quarter as global supply constraints ease.
In the second quarter of 2026, our lumber sales realizations increased compared to the first quarter of 2026 driven by low customer inventory levels and sawmill curtailments in the U.S. While supply also contracted in Europe, continued weak demand limited the positive impact on lumber pricing in the market. Overall demand is expected to remain weak in the third quarter of 2026 due to high U.S. interest rates and continued European economic headwinds. We are, however, seeing an upward trend in North American lumber prices driven by lower customer inventory levels and capacity curtailments. As conditions improve, we expect a strong recovery, with pent-up demand and supply constraints driving further price increases. The order book and commitments for our mass timber business are robust, at approximately
Mr. Bueno concluded: "As economic headwinds and geopolitical volatility persist, our immediate priorities are managing costs, maintaining our liquidity, and optimizing our capital structure. The proactive steps we are taking have the goal of strengthening our balance sheet and positioning us to capitalize as market conditions improve. "
______________
*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
| Q2 | Q1 | Q2 | YTD | YTD | |||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||||
| Revenues | $ | 460,278 | $ | 489,304 | $ | 453,524 | $ | 949,582 | $ | 960,498 | |||||||||
| Operating loss | $ | (58,974 | ) | $ | (32,892 | ) | $ | (58,404 | ) | $ | (91,866 | ) | $ | (51,671 | ) | ||||
| Operating EBITDA | $ | (20,993 | ) | $ | 7,848 | $ | (20,881 | ) | $ | (13,145 | ) | $ | 26,207 | ||||||
| Net loss | $ | (75,978 | ) | $ | (51,996 | ) | $ | (86,071 | ) | $ | (127,974 | ) | $ | (108,410 | ) | ||||
| Net loss per common share | |||||||||||||||||||
| Basic | $ | (1.13 | ) | $ | (0.78 | ) | $ | (1.29 | ) | $ | (1.91 | ) | $ | (1.62 | ) | ||||
| Diluted | $ | (1.13 | ) | $ | (0.78 | ) | $ | (1.29 | ) | $ | (1.91 | ) | $ | (1.62 | ) | ||||
Consolidated – Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Total revenues for the second quarter of 2026 remained relatively steady at
Costs and expenses in the second quarter of 2026 were generally flat at
In the second quarter of 2026, Operating EBITDA was negative
Segment Results
Pulp
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Pulp revenues | $ | 303,340 | $ | 313,705 | ||||
| Energy and chemical revenues | $ | 21,734 | $ | 18,603 | ||||
| Segment Operating EBITDA(1) | $ | (12,651 | ) | $ | (10,262 | ) | ||
______________
(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 second quarter of 2026, Segment Operating EBITDA for our pulp segment was negative
Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the second quarter of 2026 modestly decreased to
Pulp revenues in the second quarter of 2026 modestly decreased to
In the second quarter of 2026, the third-party industry quoted average list price for NBSK pulp in Europe increased from the same period of 2025 primarily due to supply constraints. In the second quarter of 2026, the third-party industry quoted average list price in North America and net price in China for NBSK pulp both 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 second quarter of 2026 decreased by approximately
In the second quarter of 2026, the third-party industry quoted average list price in North America and net price in China for NBHK pulp both increased from the same period of 2025, primarily due to global supply constraints. In the second quarter of 2026, average NBHK pulp sales realizations increased by approximately
Total pulp sales volumes in the second quarter of 2026 increased by approximately
Energy and chemical revenues in the second quarter of 2026 increased by approximately
In the second quarter of 2026, cost and expenses modestly decreased to
Total pulp production in the second quarter of 2026 was relatively flat at 455,769 ADMTs compared to 457,117 ADMTs in the same period of 2025. Our German pulp mills reduced production during the quarter in response to high fiber prices, but this was offset by there being no planned maintenance downtime in the second quarter of 2026 compared to 23 days (approximately 33,200 ADMTs) at our pulp mills in the same period of 2025. Pulp production at our German mills is expected to remain at reduced levels in the third quarter of 2026 due to ongoing high fiber costs.
Overall average per unit fiber costs in the second quarter of 2026 increased by approximately
Solid Wood
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Lumber revenues | $ | 56,643 | $ | 66,332 | ||||
| Manufactured products revenues(1) | $ | 25,821 | $ | 12,418 | ||||
| Pallet revenues | $ | 31,908 | $ | 26,586 | ||||
| Biofuels revenues(2) | $ | 10,724 | $ | 5,095 | ||||
| Energy revenues | $ | 6,296 | $ | 4,242 | ||||
| Wood residuals revenues | $ | 2,811 | $ | 2,595 | ||||
| Segment Operating EBITDA(3) | $ | (8,238 | ) | $ | (4,861 | ) | ||
______________
(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 second quarter of 2026, Segment Operating EBITDA for the solid wood segment was negative
Solid wood segment revenues in the second quarter of 2026 increased by approximately
In the second quarter of 2026, lumber revenues decreased by approximately
Lumber sales volumes in the second quarter of 2026 decreased by approximately
In the second quarter of 2026, manufactured products revenues were
Lumber production in the second quarter of 2026 was relatively stable at 123.8 MMfbm compared to 120.2 MMfbm in the same period of 2025.
Fiber costs were approximately
Consolidated – Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Total revenues for the first half of 2026 were relatively flat at
Costs and expenses in the first half of 2026 modestly increased to
In the first half of 2026, Operating EBITDA decreased to negative
Liquidity
As of June 30, 2026, we had cash and cash equivalents of
The following table is a summary of selected financial information as of the dates indicated:
| June 30, | December 31, | ||||||
| 2026 | 2025 | ||||||
| (in thousands) | |||||||
| Cash and cash equivalents | $ | 78,775 | $ | 186,805 | |||
| Working capital | $ | 182,474 | $ | 582,176 | |||
| Total assets | $ | 1,869,907 | $ | 2,041,420 | |||
| Current liabilities | $ | 600,876 | $ | 283,626 | |||
| Long-term liabilities | $ | 1,367,005 | $ | 1,689,734 | |||
| Total shareholders’ equity (deficit) | $ | (97,974 | ) | $ | 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 August 7, 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/smtqn5ma 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
| Q2 | Q1 | Q2 | YTD | YTD | ||||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||
| Revenues from external customers | ||||||||||||||||||||
| Pulp segment | $ | 325,074 | $ | 344,983 | $ | 332,308 | $ | 670,057 | $ | 713,388 | ||||||||||
| Solid wood segment | 134,203 | 131,742 | 117,268 | 265,945 | 239,988 | |||||||||||||||
| Corporate and other | 1,001 | 12,579 | 3,948 | 13,580 | 7,122 | |||||||||||||||
| Total revenues | $ | 460,278 | $ | 489,304 | $ | 453,524 | $ | 949,582 | $ | 960,498 | ||||||||||
| Pulp Segment Operating EBITDA(1) | $ | (12,651 | ) | $ | 6,897 | $ | (10,262 | ) | $ | (5,754 | ) | $ | 39,610 | |||||||
| Solid wood Segment Operating EBITDA(1) | (8,238 | ) | (5,631 | ) | (4,861 | ) | (13,869 | ) | (5,153 | ) | ||||||||||
| Corporate and other | (104 | ) | 6,582 | (5,758 | ) | 6,478 | (8,250 | ) | ||||||||||||
| Operating EBITDA(2) | $ | (20,993 | ) | $ | 7,848 | $ | (20,881 | ) | $ | (13,145 | ) | $ | 26,207 | |||||||
| Net loss | $ | (75,978 | ) | $ | (51,996 | ) | $ | (86,071 | ) | $ | (127,974 | ) | $ | (108,410 | ) | |||||
| Net loss per common share | ||||||||||||||||||||
| Basic | $ | (1.13 | ) | $ | (0.78 | ) | $ | (1.29 | ) | $ | (1.91 | ) | $ | (1.62 | ) | |||||
| Diluted | $ | (1.13 | ) | $ | (0.78 | ) | $ | (1.29 | ) | $ | (1.91 | ) | $ | (1.62 | ) | |||||
| Common shares outstanding at period end | 67,019 | 66,983 | 66,983 | 67,019 | 66,983 | |||||||||||||||
______________
(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
| Q2 | Q1 | Q2 | YTD | YTD | ||||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Pulp Segment | ||||||||||||||||||||
| Pulp production ('000 ADMTs) | ||||||||||||||||||||
| NBSK | 390.0 | 362.5 | 403.2 | 752.5 | 773.6 | |||||||||||||||
| NBHK | 65.8 | 103.2 | 53.9 | 169.0 | 142.4 | |||||||||||||||
| Annual maintenance downtime ('000 ADMTs) | — | — | 33.2 | — | 62.9 | |||||||||||||||
| Annual maintenance downtime (days) | — | — | 23 | — | 45 | |||||||||||||||
| Pulp sales ('000 ADMTs) | ||||||||||||||||||||
| NBSK | 368.8 | 385.1 | 361.4 | 753.8 | 749.5 | |||||||||||||||
| NBHK | 81.6 | 85.6 | 65.3 | 167.2 | 155.1 | |||||||||||||||
| Average NBSK pulp prices ($/ADMT)(1) | ||||||||||||||||||||
| Europe | 1,655 | 1,618 | 1,553 | 1,637 | 1,552 | |||||||||||||||
| China | 658 | 685 | 734 | 672 | 764 | |||||||||||||||
| North America | 1,577 | 1,563 | 1,820 | 1,570 | 1,787 | |||||||||||||||
| Average NBHK pulp prices ($/ADMT)(1) | ||||||||||||||||||||
| China | 602 | 595 | 533 | 598 | 556 | |||||||||||||||
| North America | 1,495 | 1,338 | 1,310 | 1,417 | 1,289 | |||||||||||||||
| Average pulp sales realizations ($/ADMT)(2) | ||||||||||||||||||||
| NBSK | 682 | 696 | 758 | 689 | 771 | |||||||||||||||
| NBHK | 607 | 564 | 575 | 585 | 572 | |||||||||||||||
| Energy production ('000 MWh) | 483.0 | 544.6 | 511.1 | 1,027.6 | 1,038.1 | |||||||||||||||
| Energy sales ('000 MWh) | 162.3 | 179.3 | 183.1 | 341.6 | 381.8 | |||||||||||||||
| Average energy sales realizations ($/MWh) | 109 | 123 | 83 | 117 | 96 | |||||||||||||||
| Solid Wood Segment | ||||||||||||||||||||
| Lumber | ||||||||||||||||||||
| Production (MMfbm) | 123.8 | 115.9 | 120.2 | 239.8 | 248.2 | |||||||||||||||
| Sales (MMfbm) | 100.3 | 112.1 | 120.6 | 212.5 | 251.5 | |||||||||||||||
| Average sales realizations ($/Mfbm) | 565 | 536 | 550 | 549 | 524 | |||||||||||||||
| Energy | ||||||||||||||||||||
| Production and sales ('000 MWh) | 43.3 | 38.0 | 32.7 | 81.3 | 68.8 | |||||||||||||||
| Average sales realizations ($/MWh) | 145 | 147 | 130 | 146 | 132 | |||||||||||||||
| Manufactured products(3) | ||||||||||||||||||||
| Production ('000 cubic meters) | 11.0 | 7.9 | 7.8 | 18.9 | 14.9 | |||||||||||||||
| Sales ('000 cubic meters) | 11.0 | 10.7 | 8.1 | 21.7 | 14.0 | |||||||||||||||
| Average sales realizations ($/cubic meter) | 2,206 | 1,801 | 1,318 | 2,007 | 1,955 | |||||||||||||||
| Pallets | ||||||||||||||||||||
| Production ('000 units) | 2,314.8 | 2,433.3 | 2,132.9 | 4,748.1 | 4,229.3 | |||||||||||||||
| Sales ('000 units) | 2,418.3 | 2,381.3 | 2,248.0 | 4,799.6 | 4,376.8 | |||||||||||||||
| Average sales realizations ($/unit) | 13 | 13 | 12 | 13 | 11 | |||||||||||||||
| Biofuels(4) | ||||||||||||||||||||
| Production ('000 tonnes) | 37.3 | 35.4 | 25.2 | 72.7 | 69.7 | |||||||||||||||
| Sales ('000 tonnes) | 34.6 | 38.1 | 19.6 | 72.6 | 59.9 | |||||||||||||||
| Average sales realizations ($/tonne) | 310 | 320 | 260 | 315 | 239 | |||||||||||||||
| Average Spot Currency Exchange Rates | ||||||||||||||||||||
| $ / €(5) | 1.1632 | 1.1701 | 1.1342 | 1.1666 | 1.0943 | |||||||||||||||
| $ / C$(5) | 0.7229 | 0.7292 | 0.7225 | 0.7260 | 0.7099 | |||||||||||||||
______________
(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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | $ | 460,278 | $ | 453,524 | $ | 949,582 | $ | 960,498 | ||||||||
| Costs and expenses | ||||||||||||||||
| Cost of sales, excluding depreciation and amortization | 449,798 | 444,047 | 902,783 | 874,294 | ||||||||||||
| Cost of sales depreciation and amortization | 37,903 | 37,451 | 78,569 | 77,741 | ||||||||||||
| Selling, general and administrative expenses | 31,551 | 30,430 | 60,096 | 60,134 | ||||||||||||
| Operating loss | (58,974 | ) | (58,404 | ) | (91,866 | ) | (51,671 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest expense | (30,920 | ) | (28,411 | ) | (60,021 | ) | (56,566 | ) | ||||||||
| Other income (expenses) | 503 | (1,120 | ) | 2,323 | (1,305 | ) | ||||||||||
| Total other expenses, net | (30,417 | ) | (29,531 | ) | (57,698 | ) | (57,871 | ) | ||||||||
| Loss before income taxes | (89,391 | ) | (87,935 | ) | (149,564 | ) | (109,542 | ) | ||||||||
| Income tax recovery | 13,413 | 1,864 | 21,590 | 1,132 | ||||||||||||
| Net loss | $ | (75,978 | ) | $ | (86,071 | ) | $ | (127,974 | ) | $ | (108,410 | ) | ||||
| Net loss per common share | ||||||||||||||||
| Basic | $ | (1.13 | ) | $ | (1.29 | ) | $ | (1.91 | ) | $ | (1.62 | ) | ||||
| Diluted | $ | (1.13 | ) | $ | (1.29 | ) | $ | (1.91 | ) | $ | (1.62 | ) | ||||
| Dividends declared per common share | $ | — | $ | 0.075 | $ | — | $ | 0.150 | ||||||||
| MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 78,775 | $ | 186,805 | ||||
| Restricted cash | 5,000 | — | ||||||
| Accounts receivable, net | 308,554 | 298,889 | ||||||
| Inventories | 375,301 | 359,401 | ||||||
| Prepaid expenses and other | 15,720 | 20,707 | ||||||
| Total current assets | 783,350 | 865,802 | ||||||
| Property, plant and equipment, net | 1,028,469 | 1,115,490 | ||||||
| Amortizable intangible assets, net | 24,335 | 26,110 | ||||||
| Operating lease right-of-use assets | 5,696 | 6,818 | ||||||
| Pension asset | 11,328 | 12,975 | ||||||
| Deferred income tax assets | 4,929 | 7,839 | ||||||
| Other long-term assets | 11,800 | 6,386 | ||||||
| Total assets | $ | 1,869,907 | $ | 2,041,420 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other | $ | 270,496 | $ | 269,217 | ||||
| Pension and other post-retirement benefit obligations | 718 | 745 | ||||||
| Current debt | 329,662 | 13,664 | ||||||
| Total current liabilities | 600,876 | 283,626 | ||||||
| Long-term debt | 1,305,711 | 1,605,144 | ||||||
| Pension and other post-retirement benefit obligations | 10,786 | 10,392 | ||||||
| Operating lease liabilities | 3,048 | 3,858 | ||||||
| Deferred income tax liabilities | 33,079 | 58,298 | ||||||
| Other long-term liabilities | 14,381 | 12,042 | ||||||
| Total liabilities | 1,967,881 | 1,973,360 | ||||||
| Shareholders’ equity | ||||||||
| Common shares | 67,083 | 66,871 | ||||||
| Additional paid-in capital | 365,066 | 365,357 | ||||||
| Accumulated deficit | (404,990 | ) | (277,016 | ) | ||||
| Accumulated other comprehensive loss | (125,133 | ) | (87,152 | ) | ||||
| Total shareholders’ equity (deficit) | (97,974 | ) | 68,060 | |||||
| Total liabilities and shareholders’ equity | $ | 1,869,907 | $ | 2,041,420 | ||||
| MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Cash flows from (used in) operating activities | ||||||||||||||||
| Net loss | $ | (75,978 | ) | $ | (86,071 | ) | $ | (127,974 | ) | $ | (108,410 | ) | ||||
| Adjustments to reconcile net loss to cash flows from operating activities | ||||||||||||||||
| Depreciation and amortization | 37,981 | 37,523 | 78,721 | 77,878 | ||||||||||||
| Deferred income tax recovery | (13,254 | ) | (1,632 | ) | (21,263 | ) | (11,138 | ) | ||||||||
| Inventory impairment | 29,000 | 11,000 | 51,000 | 11,000 | ||||||||||||
| Defined benefit pension plans and other post-retirement benefit plan expense (income) | (82 | ) | 175 | (161 | ) | 344 | ||||||||||
| Stock-based compensation | (857 | ) | 1,036 | (69 | ) | 2,042 | ||||||||||
| Foreign exchange transaction losses (gains) | (621 | ) | 9,361 | (5,261 | ) | 17,779 | ||||||||||
| Other | 2,462 | 3,012 | 2,250 | 4,640 | ||||||||||||
| Changes in working capital | ||||||||||||||||
| Accounts receivable | 18,580 | 31,588 | (13,452 | ) | 14,790 | |||||||||||
| Inventories | (46,597 | ) | (17,175 | ) | (81,727 | ) | (24,066 | ) | ||||||||
| Accounts payable and accrued expenses | (87 | ) | (12,046 | ) | 12,579 | 16,386 | ||||||||||
| Prepaid expenses and other | 34,337 | 18,703 | 4,575 | (8,760 | ) | |||||||||||
| Net cash used in operating activities | (15,116 | ) | (4,526 | ) | (100,782 | ) | (7,515 | ) | ||||||||
| Cash flows from (used in) investing activities | ||||||||||||||||
| Purchase of property, plant and equipment | (12,164 | ) | (24,331 | ) | (25,330 | ) | (44,413 | ) | ||||||||
| Proceeds from government grants | 4,825 | 3,115 | 4,825 | 3,115 | ||||||||||||
| Other | 821 | (1,557 | ) | 1,162 | (1,335 | ) | ||||||||||
| Net cash used in investing activities | (6,518 | ) | (22,773 | ) | (19,343 | ) | (42,633 | ) | ||||||||
| Cash flows from (used in) financing activities | ||||||||||||||||
| Proceeds from revolving credit facilities, net | 24,153 | 3,607 | 30,001 | 25,361 | ||||||||||||
| Dividend payments | — | (5,015 | ) | — | (5,015 | ) | ||||||||||
| Payment of finance lease obligations | (3,753 | ) | (2,405 | ) | (7,316 | ) | (4,913 | ) | ||||||||
| Other | (4,551 | ) | 545 | (5,078 | ) | 545 | ||||||||||
| Net cash from (used in) financing activities | 15,849 | (3,268 | ) | 17,607 | 15,978 | |||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 19 | (4,407 | ) | (512 | ) | (4,256 | ) | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | (5,766 | ) | (34,974 | ) | (103,030 | ) | (38,426 | ) | ||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 89,541 | 181,473 | 186,805 | 184,925 | ||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 83,775 | $ | 146,499 | $ | 83,775 | $ | 146,499 | ||||||||
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:
| Q2 | Q1 | Q2 | YTD | YTD | |||||||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||
| Net loss | $ | (75,978 | ) | $ | (51,996 | ) | $ | (86,071 | ) | $ | (127,974 | ) | $ | (108,410 | ) | ||||
| Income tax recovery | (13,413 | ) | (8,177 | ) | (1,864 | ) | (21,590 | ) | (1,132 | ) | |||||||||
| Interest expense | 30,920 | 29,101 | 28,411 | 60,021 | 56,566 | ||||||||||||||
| Other expenses (income) | (503 | ) | (1,820 | ) | 1,120 | (2,323 | ) | 1,305 | |||||||||||
| Operating loss | (58,974 | ) | (32,892 | ) | (58,404 | ) | (91,866 | ) | (51,671 | ) | |||||||||
| Add: Depreciation and amortization | 37,981 | 40,740 | 37,523 | 78,721 | 77,878 | ||||||||||||||
| Operating EBITDA | $ | (20,993 | ) | $ | 7,848 | $ | (20,881 | ) | $ | (13,145 | ) | $ | 26,207 | ||||||
