Mercer International Inc. Reports Third Quarter 2026 Results

The proposed recapitalization pairs a debt-for-equity exchange with new secured borrowing, while quarterly revenue declined.

Rhea-AI Summary

Mercer International (Nasdaq: MERC) reported a third-quarter 2026 net loss of $59.2 million, narrowing from the same quarter last year. Loss per share was $0.88 versus $1.21, while revenue fell approximately 4% to $440.7 million. Operating EBITDA, a non-GAAP earnings measure, improved to negative $2.9 million from negative $28.1 million.

Restructuring support agreements address $1.275 billion of senior notes. The recapitalization provides for exchanging approximately $1.1 billion of notes for equity, eliminating approximately $96 million of annual cash interest, and raising $400 million through fully backstopped senior secured notes. Mercer secured approximately $13.0 million in grants and up to $13.5 million in repayable contributions for Peace River. Planned maintenance reduced quarterly Operating EBITDA by approximately $34.1 million; cost savings reached approximately $76.0 million since April 2025.

21 points · 4 major

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3 major · 18 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.Approximately $1.1 billion of senior notes would exchange for equity under the recapitalization, reducing debt. 66× market cap
• Major point. Forward-looking: it has not happened yet and may not happen.$400 million of new capital is provided for through a fully backstopped senior secured notes rights offering. 24× market cap
• Major pointApproximately $13.0 million in Peace River grants supported modernization projects and benefited Q3 costs. 78% of market cap
• Major pointUp to $13.5 million in low-interest repayable contributions secured for Peace River productivity and modernization projects. 81% of market cap
• Moderate pointQ3 net loss narrowed to $59.2 million from $80.8 million a year earlier and $76.0 million in Q2.
• Moderate pointQ3 Operating EBITDA improved to negative $2.9 million from negative $28.1 million year-over-year and negative $21.0 million sequentially.
• Moderate pointRestructuring support includes holders of more than 87% of senior-note principal and a majority of common shares.
• Moderate point$22.0 million in Q3 cost savings brought savings since April 2025 to approximately $76.0 million.
• Moderate point. Forward-looking: it has not happened yet and may not happen.$100 million savings and efficiency target remains on track for year-end 2026, Mercer expects.
• Moderate point. Forward-looking: it has not happened yet and may not happen.Approximately $151 million mass timber order book and commitments expected to begin contributing in late 2026 and into 2027. 9× market cap
• Moderate pointQ3 costs and expenses fell approximately 9% year-over-year to $479.4 million from $525.7 million.
• Moderate pointPulp segment Operating EBITDA improved to $5.9 million from negative $12.7 million a year earlier.
• Moderate pointHardwood pulp realizations rose approximately 14% year-over-year to $601 per air-dried metric ton from $528.

8 minor points

• Minor pointQ3 loss per share narrowed to $0.88 from $1.21 a year earlier and $1.13 in Q2.
• Minor pointQ3 operating loss narrowed to $38.747 million from $67.589 million a year earlier.
• Minor point. Forward-looking: it has not happened yet and may not happen.Approximately $96 million of annual cash interest on senior notes would be eliminated under the recapitalization.
• Minor pointEnergy and chemical revenue rose approximately 43% year-over-year to $29.1 million from $20.4 million.
• Minor pointLumber sales realizations increased modestly versus Q2, primarily reflecting higher U.S. prices.
• Minor point. Forward-looking: it has not happened yet and may not happen.Canadian pulp mill fiber costs expected to decrease in Q4 following Celgar contract renegotiation and improved supply.
• Minor point. Forward-looking: it has not happened yet and may not happen.Softwood pulp prices expected to increase modestly across all Mercer markets in Q4.
• Minor pointYear-to-date net loss narrowed to $187.180 million from $189.189 million; loss per share narrowed to $2.79 from $2.83.

Negative

• Major point. Forward-looking: it has not happened yet and may not happen.Approximately $1.1 billion debt-for-equity exchange would issue equity as part of the recapitalization. 66× market cap
• Major point. Forward-looking: it has not happened yet and may not happen.$400 million senior secured notes rights offering would add secured debt under the recapitalization. 24× market cap
• Major pointUp to $13.5 million of Peace River contributions are repayable rather than grants.
• Moderate pointRecapitalization remains pending as Mercer works to complete its implementation.
• Moderate pointQ3 revenue declined approximately 4% year-over-year to $440.7 million from $458.1 million.
• Moderate pointQ3 non-cash inventory impairment was $8.0 million, versus $20.4 million a year earlier. 48% of market cap
• Moderate point44 days of planned Q3 maintenance reduced Operating EBITDA by approximately $34.1 million and production by approximately 48,900 air-dried metric tons. 2× market cap
• Moderate pointPulp revenue fell approximately 12% year-over-year to $281.1 million from $318.6 million.

10 minor points

• Minor pointRosenthal incurred 24 days of unplanned Q4 downtime after startup effluent-treatment issues; wastewater discharge and operations subsequently resumed.
• Minor point. Forward-looking: it has not happened yet and may not happen.18 days of planned Celgar maintenance downtime expected in Q4 2026.
• Minor pointSoftwood pulp realizations fell approximately 8% year-over-year to $671 per air-dried metric ton from $728.
• Minor pointPulp sales volumes fell approximately 7% year-over-year to 421,413 air-dried metric tons from 452,840.
• Minor pointPulp production fell approximately 11% year-over-year to 406,519 air-dried metric tons from 458,708.
• Minor pointPulp per-unit fiber costs rose approximately 7% year-over-year, primarily reflecting higher German costs.
• Minor point. Forward-looking: it has not happened yet and may not happen.German pulp mill per-unit fiber costs expected to increase slightly in Q4 amid reduced supply and energy-sector demand.
• Minor pointYear-to-date revenue fell to $1,390.250 million from $1,418.566 million.
• Minor pointYear-to-date operating loss widened to $130.613 million from $119.260 million.
• Minor pointYear-to-date Operating EBITDA deteriorated to negative $15.996 million from negative $1.870 million.

News Explained

Holders of more than 87% of senior-note principal and a majority of common shares support the recapitalization, which Mercer is still working to complete.

Mercer has entered into restructuring support agreements, but says it is still working to complete the recapitalization.

The plan provides for exchanging approximately $1.1 billion of notes for equity; if that involves issuing additional shares, the share count would rise and existing holders’ percentage ownership would fall.

Key Figures

Operating EBITDA: Negative $2.9 million Net loss: $59.2 million ($0.88 per share) Revenue: $440.7 million +5 more

Operating EBITDA

Negative $2.9 million

Q3 2026; improved from negative $28.1 million in Q3 2025 and negative $21.0 million in Q2 2026

Net loss

$59.2 million ($0.88 per share)

Q3 2026; compared with $80.8 million in Q3 2025 and $76.0 million in Q2 2026

Revenue

$440.7 million

Q3 2026; decreased approximately 4% from $458.1 million in Q3 2025

Senior notes exchanged

Approximately $1.1 billion

Existing senior notes to be exchanged for equity under the recapitalization

Annual cash interest eliminated

Approximately $96 million

Annual cash interest on senior notes under the recapitalization

New capital

$400 million

Fully backstopped rights offering of senior secured notes

Planned maintenance impact

Approximately $34.1 million

Adverse impact on Q3 2026 Segment Operating EBITDA

Cost savings

Approximately $76.0 million

Cumulative savings since the program launched

Previous Earnings Reports

3 past events · Latest: Aug 06

Same Type 3 events

1. Aug 06

   Quarterly earnings

   24h Move

   -12.1%

   Q2 reported negative $21.0 million EBITDA and a $76.0 million net loss.

2. May 07

   Quarterly earnings

   24h Move

   -11.7%

   Q1 reported $7.8 million EBITDA but a $52.0 million net loss.

3. Nov 06

   Quarterly earnings

   24h Move

   -2.1%

   Q3 2025 reported negative $28.1 million EBITDA and an $80.8 million net loss.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

operating ebitda, rights offering, senior secured notes, gaap

4 terms

operating ebitda financial

"reported third quarter 2026 Operating EBITDA of negative $2.9 million"

Operating EBITDA is a measure of the cash profit a company generates from its core business activities, calculated by taking earnings and adding back interest, taxes, depreciation and amortization while excluding one‑time items and non‑operating income. For investors it acts like checking how much money a store makes from selling its products before financing, taxes and accounting charges, helping compare operational performance across companies and periods.

rights offering financial

"through a fully-backstopped rights offering of senior secured notes"

A rights offering is a way for a company to raise additional money by giving existing shareholders the opportunity to buy more shares at a discounted price before they are offered to the public. It’s similar to a special sale where current owners get the first chance to buy extra items at a lower cost, allowing them to increase their investment if they choose. This process matters to investors because it can affect the value of their holdings and their ability to buy new shares at favorable terms.

View in glossary

senior secured notes financial

"fully-backstopped rights offering of senior secured notes"

Senior secured notes are loans a company sells to investors that are backed by specific assets and given first priority for repayment if the company defaults. Because they have a claim on collateral and are paid before other debts, they usually offer lower risk and correspondingly lower interest than unsecured debt; investors use them to judge how safe repayment and recovery of principal might be, like holding a mortgage instead of an unsecured credit card balance.

gaap financial

"accounting principles generally accepted in the United States ("GAAP")"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

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• As announced on November 2, 2026, we entered into restructuring support agreements with significant support from noteholders and shareholders to, among other things, effectuate a balance sheet restructuring which will address $1.275 billion of our outstanding senior notes and provide for $400 million of fully backstopped new capital to position Mercer for long-term success. Our operating subsidiaries will continue to operate their businesses with no impact on customers, suppliers and employees
• Third quarter Operating EBITDA* improved to negative $2.9 million (net loss of $59.2 million), including a non-cash inventory impairment of $8.0 million, from negative $28.1 million (net loss of $80.8 million) in the same quarter of 2025
• Secured a total of approximately $26.5 million in grants and repayable contributions for the Peace River mill to improve productivity and modernize the mill amid industry headwinds
• 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 cost savings of $22.0 million in third quarter and a total of approximately $76.0 million to date since launch in April 2025

NEW YORK, Nov. 05, 2026 (GLOBE NEWSWIRE) -- Mercer International Inc. (Nasdaq: MERC) today reported third quarter 2026 Operating EBITDA of negative $2.9 million, an improvement from negative $28.1 million in the same quarter of 2025 and negative $21.0 million in the second quarter of 2026.

In the third quarter of 2026, net loss was $59.2 million ($0.88 per share) compared to $80.8 million ($1.21 per share) in the third quarter of 2025 and $76.0 million ($1.13 per share) in the second quarter of 2026.

Mr. Juan Carlos Bueno, Chief Executive Officer, stated: "As announced on November 2, 2026, we entered into restructuring support agreements with holders of more than 87% of the aggregate outstanding principal amount of our senior notes and with holders of a majority of the outstanding shares of our common stock that provide for a comprehensive recapitalization of the company (the "Recapitalization"). The transaction provides for, among other things, the exchange of approximately $1.1 billion of existing senior notes for equity, eliminates approximately $96 million of annual cash interest on our senior notes and provides for $400 million of new capital through a fully-backstopped rights offering of senior secured notes. The Recapitalization is expected to significantly reduce our debt, extend our maturity runway and provide substantial new liquidity. This transaction is a decisive step forward and a result of constructive negotiations with key stakeholder groups.

The Recapitalization is being implemented through Mercer International Inc., the parent company, and Mercer International (Texas) LLC, a non-operating subsidiary. No other subsidiary is directly impacted by the implementation of the plan of reorganization. Our operations will continue in the ordinary course with no impact on customers, suppliers and employees.

During the third quarter of 2026, our pulp sales realizations remained steady. Industry-wide curtailments and permanent pulp mill closures helped balance out supply this quarter, but soft market demand and ongoing regional overcapacity in China kept prices flat. Overall fiber pricing improved as we had lower costs for our pulp mills in Canada and improved supply for our German sawmills. In contrast, fiber costs for our German pulp mills increased due to persistent regional supply shortages and competition from energy producers. Our results in the third quarter of 2026 were also negatively impacted by significant planned annual maintenance downtime during the quarter.

Per unit fiber costs for the pulp and solid wood segments modestly decreased in the third quarter of 2026 compared to the second quarter. For the fourth quarter, per unit fiber costs for our German pulp mills are expected to increase slightly, driven by continued strong demand for wood as an energy source amid ongoing geopolitical conflicts, and reduced supply. Conversely, per unit fiber costs for our Canadian pulp mills are expected to decrease following renegotiation of Celgar's supply contracts and improved supply, while sawmill per unit fiber costs are projected to remain flat.

In the third quarter of 2026, our pulp mills had 44 days of planned annual maintenance downtime (approximately 48,900 ADMTs) which negatively impacted Operating EBITDA in the quarter by approximately $34.1 million. We currently expect a total of 18 days of planned annual maintenance downtime at the Celgar mill in the fourth quarter of 2026.

Following Rosenthal's planned downtime in the third quarter of 2026, the mill encountered effluent treatment issues during startup. To address these issues and as a precautionary measure, the mill proactively paused its restart process and wastewater discharge. After working closely with relevant authorities, wastewater discharge subsequently resumed and the mill restarted following 24 days of unplanned downtime in the fourth quarter of 2026.

In the third quarter of 2026, overall pulp prices were relatively flat compared to the second quarter. In the fourth quarter of 2026, we currently expect softwood pulp prices to modestly increase in all our markets due to continued global supply constraints. For hardwood pulp, prices are expected to remain relatively stable.

Our lumber sales realizations modestly increased in the third quarter of 2026 compared to the second quarter, primarily due to higher prices in the U.S. market driven by reduced supply. While supply also contracted in Europe, continued weak regional demand limited the positive impact on pricing in the market. In the fourth quarter of 2026, we currently expect lumber prices to be relatively flat as weak demand, driven by high interest rates and seasonal slowdowns, is offset by ongoing supply constraints. As market conditions improve, we believe pent-up demand and supply constraints will support price increases. The order book and commitments for our mass timber business are approximately $151 million at the end of the third quarter, anchored by large-scale data center infrastructure projects. We expect these contracts to begin contributing to our results as they commence in late 2026 and into 2027.

In the third quarter of 2026, we successfully secured government support for our Peace River mill in the form of approximately $13.0 million in grants and up to $13.5 million in low-interest repayable contributions. This funding directly supports our projects to improve productivity and modernize the mill during a period of macroeconomic and geopolitical uncertainty for the industry.

Our "One Goal One Hundred" program achieved an additional $22.0 million in cost savings in the third quarter and approximately $76.0 million in total since launch. We remain on track to achieve our previously disclosed $100 million target by the end of 2026. The program is part of broader initiatives we have implemented to improve our balance sheet and preserve cash, including efforts to reduce capital expenditures and optimize working capital."

Mr. Bueno concluded: "Market and industry-wide pressures continue to persist as we enter the fourth quarter of 2026. With the support of the majority of our noteholders and shareholders, we are putting in place a much stronger balance sheet. As we work to complete the Recapitalization, our focus remains on business fundamentals, where cost reduction, operational efficiency, and cash flow preservation are key. We will also continue exploring opportunities for additional government support, where appropriate. The Recapitalization is a key step in achieving necessary deleveraging to position us toward long-term stability and growth as market conditions improve in the future."

______________
^{*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
	Q3				Q2				Q3				YTD				YTD
	2026				2026				2025				2026				2025
	(in thousands, except per share amounts)
Revenues	$	440,668			$	460,278			$	458,068			$	1,390,250			$	1,418,566
Operating loss	$	(38,747	)		$	(58,974	)		$	(67,589	)		$	(130,613	)		$	(119,260	)
Operating EBITDA	$	(2,851	)		$	(20,993	)		$	(28,077	)		$	(15,996	)		$	(1,870	)
Net loss	$	(59,206	)		$	(75,978	)		$	(80,779	)		$	(187,180	)		$	(189,189	)
Net loss per common share
Basic	$	(0.88	)		$	(1.13	)		$	(1.21	)		$	(2.79	)		$	(2.83	)
Diluted	$	(0.88	)		$	(1.13	)		$	(1.21	)		$	(2.79	)		$	(2.83	)

Consolidated – Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025

Total revenues for the third quarter of 2026 decreased by approximately 4% to $440.7 million from $458.1 million in the same period of 2025 primarily as a result of lower pulp sales volumes and realizations. This decrease was partially offset by higher energy and solid wood products sales realizations.

Costs and expenses in the third quarter of 2026 decreased by approximately 9% to $479.4 million from $525.7 million in the same period of 2025. This decrease was primarily driven by lower pulp sales volumes and the benefits of our cost reduction initiatives, partially offset by higher per unit fiber and freight costs. In the third quarter of 2026, costs and expenses included a $13.0 million benefit from government grants recognized at our Peace River mill and a non-cash inventory impairment of $8.0 million primarily as a result of low pulp prices and high fiber costs. In the same period of 2025, costs and expenses included a non-cash inventory impairment of $20.4 million primarily as a result of lower pulp prices.

In the third quarter of 2026, Operating EBITDA improved to negative $2.9 million from negative $28.1 million in the same period of 2025. This improvement was primarily due to the government grants recognized at our Peace River mill, cost reduction initiatives and higher energy and solid wood products sales realizations. These positive impacts were partially offset by higher per unit fiber and freight costs and lower pulp sales realizations. In the third quarter of 2026, our Operating EBITDA included a non-cash inventory impairment of $8.0 million compared to $20.4 million in the same period of 2025.

Segment Results

Pulp
	Three Months Ended September 30,
	2026				2025
	(in thousands)
Pulp revenues	$	281,080			$	318,622
Energy and chemical revenues	$	29,085			$	20,416
Segment Operating EBITDA(1)	$	5,890			$	(12,686	)

______________
^{(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 third quarter of 2026, Segment Operating EBITDA for our pulp segment improved to positive $5.9 million from negative $12.7 million in the same period of 2025. This improvement was primarily due to government grants recognized at our Peace River mill, cost reduction initiatives and higher energy sales realizations. These positive impacts were partially offset by higher per unit fiber costs and lower pulp sales realizations. In the third quarter of 2026, Segment Operating EBITDA included a non-cash inventory impairment of $7.0 million compared to $18.9 million in the same period of 2025.

Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the third quarter of 2026 decreased by approximately 8% to $310.2 million from $339.0 million in the same period of 2025 due to lower pulp revenues, partially offset by higher energy and chemicals revenues.

Pulp revenues in the third quarter of 2026 decreased by approximately 12% to $281.1 million from $318.6 million in the same period of 2025 as a result of lower sales volumes and realizations.

In the third 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 environment and, in China, an oversupplied paper market. In the third quarter of 2026, the third-party industry quoted average list price for NBSK pulp in Europe increased compared to the same period of 2025 but the benefit of the higher list price was mostly offset by increased customer discounts. Our average NBSK pulp sales realizations in the third quarter of 2026 decreased by approximately 8% to $671 per ADMT from $728 per ADMT in the same period of 2025.

In the third 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 continued global supply constraints. In the third quarter of 2026, average NBHK pulp sales realizations increased by approximately 14% to $601 per ADMT from $528 per ADMT in the same period of 2025.

Total pulp sales volumes in the third quarter of 2026 decreased by approximately 7% to 421,413 ADMTs from 452,840 ADMTs in the same period of 2025 primarily driven by reduced production.

Energy and chemical revenues in the third quarter of 2026 increased by approximately 43% to $29.1 million from $20.4 million in the same period of 2025 primarily due to higher energy sales realizations.

Costs and expenses in the third quarter of 2026 decreased by approximately 14% to $327.3 million from $378.6 million in the same period of 2025. This decrease was primarily driven by lower pulp sales volumes and the benefits of our cost reduction initiatives, partially offset by higher per unit fiber costs at our German mills. In the third quarter of 2026, costs and expenses included a $13.0 million benefit from government grants recognized at our Peace River mill and a non-cash inventory impairment of $7.0 million. In the same period of 2025, costs and expenses included a non-cash inventory impairment of $18.9 million.

Total pulp production in the third quarter of 2026 decreased by approximately 11% to 406,519 ADMTs from 458,708 ADMTs in the same period of 2025. This decrease was mainly due to more days of planned annual maintenance downtime, reduced production at our German pulp mills in response to high fiber prices and mechanical issues at our Celgar mill. In the third quarter of 2026, our pulp mills had 44 days of planned annual maintenance downtime (approximately 48,900 ADMTs). In the same quarter of 2025, our pulp mills had 32 days of downtime (approximately 35,700 ADMTs) which included 20 days of planned annual maintenance and 12 days of unplanned downtime at the Celgar mill.

We estimate that planned annual maintenance downtime in the third quarter of 2026 adversely impacted our Segment Operating EBITDA by approximately $34.1 million, comprised of approximately $22.6 million in direct out-of-pocket expenses and the balance in reduced production. Many of our competitors that report their financial results using International Financial Reporting Standards capitalize their direct costs of maintenance downtime.

Overall average per unit fiber costs in the third quarter of 2026 increased by approximately 7% compared to the same period of 2025 primarily due to higher costs in Germany. These higher costs were driven by reduced supply, and strong demand for wood as an energy source amid ongoing geopolitical conflicts. For the fourth quarter of 2026, per unit fiber costs for our German pulp mills are expected to slightly increase due to continued strong demand. For our Canadian pulp mills, per unit fiber costs are expected to decrease following renegotiation of Celgar’s supply contracts and improved supply.

Solid Wood
	Three Months Ended September 30,
	2026				2025
	(in thousands)
Lumber revenues	$	68,004			$	60,971
Manufactured products revenues(1)	$	18,707			$	12,171
Pallet revenues	$	21,910			$	26,650
Biofuels revenues(2)	$	12,157			$	10,183
Energy revenues	$	5,099			$	4,894
Wood residuals revenues	$	2,766			$	2,365
Segment Operating EBITDA(3)	$	(7,036	)		$	(9,268	)

______________
^{(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 third quarter of 2026, Segment Operating EBITDA for the solid wood segment improved to negative $7.0 million from negative $9.3 million in the same period of 2025. This improvement primarily resulted from higher sales realizations for all our products and the benefits of our cost reduction initiatives, partially offset by higher per unit fiber and freight costs.

Solid wood segment revenues in the third quarter of 2026 increased by approximately 10% to $128.6 million from $117.2 million in the same period of 2025 as a result of higher revenue from all product categories except for pallets.

In the third quarter of 2026, lumber revenues increased by approximately 11% to $68.0 million from $61.0 million in the same period of 2025 as a result of higher sales realizations and volumes. Average lumber sales realizations in the third quarter of 2026 increased by approximately 6% to $586 per Mfbm from $553 per Mfbm in the same period of 2025 primarily due to supply constraints. The U.S. market accounted for approximately 56% of our lumber revenues and approximately 49% of our lumber sales volumes in the third quarter of 2026. The balance of our lumber sales were mainly to Europe.

Lumber sales volumes in the third quarter of 2026 increased by approximately 5% to 116.0 MMfbm from 110.2 MMfbm in the same period of 2025 driven by the timing of sales.

In the third quarter of 2026, manufactured products revenues increased by approximately 53% to $18.7 million from $12.2 million in the same period of 2025 driven by higher sales realizations and volumes. Manufactured products sales realizations increased by approximately 28% to $2,063 per cubic meter in the third quarter of 2026 from $1,615 per cubic meter in the same period of 2025 driven by a shift in mass timber construction activity toward higher-value projects.

Lumber production in the third quarter of 2026 decreased by approximately 6% to 108.6 MMfbm from 115.4 MMfbm in the same period of 2025 as a result of lower operating rates in response to high fiber prices.

Fiber costs were approximately 80% of our lumber cash production costs in the third quarter of 2026. In the third quarter of 2026, per unit fiber costs for lumber production increased by approximately 15% compared to the same period of 2025 due to reduced supply and strong demand. For the fourth quarter of 2026, we currently expect per unit fiber costs to remain flat.

Consolidated – Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025

Total revenues for the nine months ended September 30, 2026 were relatively steady at $1,390.3 million compared to $1,418.6 million in the same period of 2025 as lower pulp sales realizations and volumes were mostly offset by higher energy and solid wood products sales realizations.

Costs and expenses in the nine months ended September 30, 2026 were relatively flat at $1,520.9 million compared to $1,537.8 million in the same period of 2025. The decrease in costs and expenses from lower planned annual maintenance downtime, cost reduction initiatives and lower pulp sales volumes was mostly offset by higher per unit fiber and freight costs and the negative foreign exchange impact from a weaker dollar. In the nine months ended September 30, 2026, costs and expenses included a $13.0 million benefit from government grants recognized at our Peace River mill and inventory impairment charges of $59.0 million primarily as a result of low pulp prices and high fiber costs. In the same period of 2025, costs and expenses included inventory impairment charges of $31.4 million against pulp inventory.

In the nine months ended September 30, 2026, Operating EBITDA decreased to negative $16.0 million from negative $1.9 million in the same period of 2025. This decrease was primarily due to higher per unit fiber and freight costs and lower pulp sales realizations. These adverse effects were partially offset by the impact of lower planned annual maintenance downtime, cost reduction initiatives, higher energy and solid wood products sales realizations and the government grants recognized at our Peace River mill. In the nine months ended September 30, 2026, our Operating EBITDA included inventory impairment charges of $59.0 million compared to $31.4 million in the same period of 2025.

Liquidity

On November 2, 2026, we entered into restructuring support agreements (the “RSAs”) with holders of more than 87% of the aggregate outstanding principal amount of our 12.875% Senior Notes due 2028 and 5.125% Senior Notes due 2029, including the members of an ad hoc group of noteholders, and with holders of a majority of the outstanding shares of our common stock. The RSAs set out the terms of a comprehensive Recapitalization that is expected to significantly reduce our debt, extend our maturity runway and provide substantial new liquidity.

To implement the transactions, Mercer International Inc. and Mercer International (Texas) LLC, a non-operating U.S. subsidiary, expect to commence voluntary chapter 11 prepackaged cases under the United States Bankruptcy Code (the “Chapter 11 Cases”) and file a plan of reorganization (the “Plan”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Court”). Completion of the Recapitalization is subject to customary conditions, including receipt of any requisite regulatory approvals, and we are optimistic that we will be able to conclude this expedited chapter 11 process by the end of 2026.

For further information regarding the Recapitalization, please refer to our Current Report on Form 8-K dated November 2, 2026.

As of September 30, 2026, we had cash and cash equivalents of $71.0 million. After taking into account the previously announced €70 million reduction in borrowing capacity under our German revolving credit facility, we had approximately $72.5 million available under our revolving credit facilities, bringing aggregate liquidity to approximately $143.5 million as of September 30, 2026. Please refer to our Quarterly Report on Form 10-Q for the period ended September 30, 2026, for further information regarding our liquidity as of September 30, 2026.

The following table is a summary of selected financial information as of the dates indicated:

	September 30,				December 31,
	2026				2025
	(in thousands)
Cash and cash equivalents	$	71,007			$	186,805
Working capital	$	139,174			$	582,176
Total assets	$	1,815,850			$	2,041,420
Current liabilities	$	614,974			$	283,626
Long-term liabilities	$	1,359,081			$	1,689,734
Total shareholders’ equity (deficit)	$	(158,205	)		$	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 November 6, 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/iv6mon86 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: our ability to commence the Chapter 11 Cases, obtain Bankruptcy Court approval of the prepackaged chapter 11 plan and complete the Recapitalization on the anticipated terms and timeline or at all; the satisfaction of the conditions to, and the effectiveness of, the RSAs, the backstop commitments and the rights offering; the effects of the Chapter 11 Cases on our business, liquidity and relationships with customers, suppliers and employees; the cancellation of our existing common stock and the listing of our securities; 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
	Q3				Q2				Q3				YTD				YTD
	2026				2026				2025				2026				2025
	(in thousands, except per share amounts)
Revenues from external customers
Pulp segment	$	310,165			$	325,074			$	339,038			$	980,222			$	1,052,426
Solid wood segment		128,643				134,203				117,234				394,588				357,222
Corporate and other		1,860				1,001				1,796				15,440				8,918
Total revenues	$	440,668			$	460,278			$	458,068			$	1,390,250			$	1,418,566
Pulp Segment Operating EBITDA(1)	$	5,890			$	(12,651	)		$	(12,686	)		$	136			$	26,924
Solid wood Segment Operating EBITDA(1)		(7,036	)			(8,238	)			(9,268	)			(20,905	)			(14,421	)
Corporate and other		(1,705	)			(104	)			(6,123	)			4,773				(14,373	)
Operating EBITDA(2)	$	(2,851	)		$	(20,993	)		$	(28,077	)		$	(15,996	)		$	(1,870	)
Net loss	$	(59,206	)		$	(75,978	)		$	(80,779	)		$	(187,180	)		$	(189,189	)
Net loss per common share
Basic	$	(0.88	)		$	(1.13	)		$	(1.21	)		$	(2.79	)		$	(2.83	)
Diluted	$	(0.88	)		$	(1.13	)		$	(1.21	)		$	(2.79	)		$	(2.83	)
Common shares outstanding at period end		67,018				67,018				66,983				67,018				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
	Q3				Q2				Q3				YTD				YTD
	2026				2026				2025				2026				2025
Pulp Segment
Pulp production ('000 ADMTs)
NBSK		330.1				390.0				366.7				1,082.6				1,140.3
NBHK		76.4				65.8				92.0				245.5				234.4
Annual maintenance downtime ('000 ADMTs)		48.9				—				21.3				48.9				84.2
Annual maintenance downtime (days)		44				—				20				44				65
Pulp sales ('000 ADMTs)
NBSK		342.9				368.8				385.9				1,096.8				1,135.4
NBHK		78.5				81.6				67.0				245.7				222.1
Average NBSK pulp prices ($/ADMT)(1)
Europe		1,625				1,655				1,497				1,633				1,533
China		645				658				690				663				739
North America		1,570				1,577				1,700				1,570				1,758
Average NBHK pulp prices ($/ADMT)(1)
China		572				602				503				589				538
North America		1,535				1,495				1,203				1,456				1,261
Average pulp sales realizations ($/ADMT)(2)
NBSK		671				682				728				683				756
NBHK		601				607				528				590				559
Energy production ('000 MWh)		464.8				483.0				490.5				1,492.5				1,528.7
Energy sales ('000 MWh)		161.2				162.3				171.1				502.8				552.9
Average energy sales realizations ($/MWh)		154				109				98				129				97
Solid Wood Segment
Lumber
Production (MMfbm)		108.6				123.8				115.4				348.4				363.6
Sales (MMfbm)		116.0				100.3				110.2				328.5				361.8
Average sales realizations ($/Mfbm)		586				565				553				562				533
Energy
Production and sales ('000 MWh)		31.7				43.3				32.7				112.9				101.5
Average sales realizations ($/MWh)		161				145				150				150				138
Manufactured products(3)
Production ('000 cubic meters)		8.7				11.0				9.2				27.8				24.1
Sales ('000 cubic meters)		8.5				11.0				6.8				30.2				20.8
Average sales realizations ($/cubic meter)		2,063				2,206				1,615				2,023				1,843
Pallets
Production ('000 units)		1,821.9				2,314.8				2,265.2				6,570.0				6,494.5
Sales ('000 units)		1,661.4				2,418.3				2,144.5				6,461.0				6,521.3
Average sales realizations ($/unit)		13				13				12				13				12
Biofuels(4)
Production ('000 tonnes)		35.7				37.3				33.3				108.4				103.1
Sales ('000 tonnes)		39.2				34.6				39.8				111.8				99.6
Average sales realizations ($/tonne)		310				310				256				314				246
Average Spot Currency Exchange Rates
$ / €(5)		1.1506				1.1632				1.1685				1.1612				1.1196
$ / C$(5)		0.7146				0.7229				0.7261				0.7221				0.7154

______________
^{(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 September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenues		$	440,668			$	458,068			$	1,390,250			$	1,418,566
Costs and expenses
Cost of sales, excluding depreciation and amortization			416,474				457,397				1,319,257				1,331,691
Cost of sales depreciation and amortization			35,822				39,439				114,391				117,180
Selling, general and administrative expenses			27,119				28,821				87,215				88,955
Operating loss			(38,747	)			(67,589	)			(130,613	)			(119,260	)
Other income (expenses)
Interest expense			(32,323	)			(28,506	)			(92,344	)			(85,072	)
Other income (expenses)			873				539				3,196				(766	)
Total other expenses, net			(31,450	)			(27,967	)			(89,148	)			(85,838	)
Loss before income taxes			(70,197	)			(95,556	)			(219,761	)			(205,098	)
Income tax recovery			10,991				14,777				32,581				15,909
Net loss		$	(59,206	)		$	(80,779	)		$	(187,180	)		$	(189,189	)
Net loss per common share
Basic		$	(0.88	)		$	(1.21	)		$	(2.79	)		$	(2.83	)
Diluted		$	(0.88	)		$	(1.21	)		$	(2.79	)		$	(2.83	)
Dividends declared per common share		$	—			$	—			$	—			$	0.150

MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data)
		September 30, 2026				December 31, 2025
ASSETS
Current assets
Cash and cash equivalents		$	71,007			$	186,805
Restricted cash			5,000				—
Accounts receivable, net			282,143				298,889
Inventories			372,882				359,401
Prepaid expenses and other			23,116				20,707
Total current assets			754,148				865,802
Property, plant and equipment, net			1,006,202				1,115,490
Amortizable intangible assets, net			22,523				26,110
Operating lease right-of-use assets			5,659				6,818
Pension asset			10,761				12,975
Deferred income tax assets			4,913				7,839
Other long-term assets			11,644				6,386
Total assets		$	1,815,850			$	2,041,420
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and other		$	259,545			$	269,217
Pension and other post-retirement benefit obligations			726				745
Current debt			354,703				13,664
Total current liabilities			614,974				283,626
Long-term debt			1,309,770				1,605,144
Pension and other post-retirement benefit obligations			11,231				10,392
Operating lease liabilities			3,331				3,858
Deferred income tax liabilities			21,679				58,298
Other long-term liabilities			13,070				12,042
Total liabilities			1,974,055				1,973,360
Shareholders’ equity
Common shares $1 par value; 200,000,000 authorized; 67,018,000 issued and outstanding (2025 – 66,983,000)			67,083				66,871
Additional paid-in capital			365,598				365,357
Accumulated deficit			(464,196	)			(277,016	)
Accumulated other comprehensive loss			(126,690	)			(87,152	)
Total shareholders’ equity (deficit)			(158,205	)			68,060
Total liabilities and shareholders’ equity		$	1,815,850			$	2,041,420

MERCER INTERNATIONAL INC. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Cash flows from (used in) operating activities
Net loss		$	(59,206	)		$	(80,779	)		$	(187,180	)		$	(189,189	)
Adjustments to reconcile net loss to cash flows from operating activities
Depreciation and amortization			35,896				39,512				114,617				117,390
Deferred income tax recovery			(11,130	)			(10,989	)			(32,393	)			(22,127	)
Inventory impairment			8,000				20,400				59,000				31,400
Defined benefit pension plans and other post-retirement benefit plan expense (income)			(78	)			174				(239	)			518
Stock-based compensation			477				1,310				408				3,352
Foreign exchange transaction losses (gains)			1,578				(3,480	)			(3,683	)			14,299
Other			3,070				2,016				5,320				6,656
Changes in working capital
Accounts receivable			23,247				10,245				9,795				25,035
Inventories			(3,474	)			20,025				(85,201	)			(4,041	)
Accounts payable and accrued expenses			(10,864	)			(3,159	)			1,715				13,227
Prepaid expenses and other			(7,508	)			(25,329	)			(2,933	)			(34,089	)
Net cash used in operating activities			(19,992	)			(30,054	)			(120,774	)			(37,569	)
Cash flows from (used in) investing activities
Purchase of property, plant and equipment			(13,344	)			(30,017	)			(38,674	)			(74,430	)
Proceeds from government grants			1,155				1,858				5,980				4,973
Other			717				546				1,879				(789	)
Net cash used in investing activities			(11,472	)			(27,613	)			(30,815	)			(70,246	)
Cash flows from (used in) financing activities
Proceeds from revolving credit facilities, net			25,674				21,275				55,675				46,636
Proceeds from repayable government contributions			6,034				—				6,034				—
Dividend payments			—				(5,024	)			—				(10,039	)
Payment of finance lease obligations			(4,055	)			(4,872	)			(11,371	)			(9,785	)
Other			(3,418	)			(425	)			(8,496	)			120
Net cash from financing activities			24,235				10,954				41,842				26,932
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(539	)			(1,684	)			(1,051	)			(5,940	)
Net decrease in cash, cash equivalents and restricted cash			(7,768	)			(48,397	)			(110,798	)			(86,823	)
Cash, cash equivalents and restricted cash, beginning of period			83,775				146,499				186,805				184,925
Cash, cash equivalents and restricted cash, end of period		$	76,007			$	98,102			$	76,007			$	98,102

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:

	Q3				Q2				Q3				YTD				YTD
	2026				2026				2025				2026				2025
Net loss	$	(59,206	)		$	(75,978	)		$	(80,779	)		$	(187,180	)		$	(189,189	)
Income tax recovery		(10,991	)			(13,413	)			(14,777	)			(32,581	)			(15,909	)
Interest expense		32,323				30,920				28,506				92,344				85,072
Other expenses (income)		(873	)			(503	)			(539	)			(3,196	)			766
Operating loss		(38,747	)			(58,974	)			(67,589	)			(130,613	)			(119,260	)
Add: Depreciation and amortization		35,896				37,981				39,512				114,617				117,390
Operating EBITDA	$	(2,851	)		$	(20,993	)		$	(28,077	)		$	(15,996	)		$	(1,870	)

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Mercer International's third-quarter 2026 earnings results?

Mercer reported a $59.2 million net loss, or $0.88 per share, compared with a $80.8 million loss, or $1.21 per share, in Q3 2025. Revenue was $440.7 million, down approximately 4% year-over-year. Operating EBITDA improved to negative $2.9 million from negative $28.1 million.

What does Mercer's recapitalization provide for?

The recapitalization provides for exchanging approximately $1.1 billion of senior notes for equity and $400 million of new capital through a fully backstopped senior secured notes rights offering. It also provides for eliminating approximately $96 million of annual cash interest on senior notes.

Which Mercer entities are implementing the recapitalization?

The recapitalization is being implemented through Mercer International and Mercer International (Texas), a non-operating subsidiary. No other subsidiary is directly affected by implementation of the reorganization plan. Mercer expects operations to continue in the ordinary course without impact on customers, suppliers or employees.

What does Mercer expect for hardwood pulp, lumber and sawmill fiber costs in Q4 2026?

Mercer expects hardwood pulp and lumber prices to remain relatively stable in Q4 2026, with sawmill per-unit fiber costs projected to remain flat. For lumber, the company expects weak demand associated with high interest rates and seasonal slowdowns to be offset by supply constraints.