MERCER INTERNATIONAL INC. REPORTS THIRD QUARTER 2026 RESULTS
MERCER INTERNATIONAL INC. (MERC) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 For Immediate Release MERCER INTERNATIONAL INC. REPORTS THIRD QUARTER 2026 RESULTS Selected Highlights • As announced on November 2, 2026, we entered into restructuring support agreements with significant support from noteholders and shareholders to, among other thin
How this was made
The 30-second read
Why it matters
The recapitalization provides $400 M of new capital and exchanges $1.1 B of senior notes for equity, reducing annual interest expense by $96 M.
Market read
First‑report earnings and recapitalization news for a small‑cap industrial firm; may influence peer valuations.
What to watch
Future cost increases at German mills and soft demand in China may offset balance‑sheet gains.
Mercer reported third quarter 2026 Operating EBITDA of negative $2.9 million and a net loss of $59.2 million while pursuing a comprehensive recapitalization addressing $1.275 billion of outstanding senior notes.
Third-quarter losses and negative operating cash flow persisted despite substantial improvement in Operating EBITDA, government-grant support and cost savings. Liquidity and capital structure remain central issues as the company expects to commence voluntary prepackaged Chapter 11 cases to implement its Recapitalization.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total revenuesGAAP | $440.7M | – | decreased by approximately 4% |
| Q3 2026 operating lossGAAP | $38.7M | – | – |
| Q3 2026 Operating EBITDAnon-GAAP | negative $2.9 million | – | – |
| Q3 2026 net lossGAAP | $59.2M | – | – |
| Q3 2026 net loss per common share, basicGAAP | $0.88 | – | – |
| Q3 2026 net loss per common share, dilutedGAAP | $0.88 | – | – |
| Q3 2026 cost of sales, excluding depreciation and amortizationGAAP | $416.5M | – | – |
| Q3 2026 cost of sales depreciation and amortizationGAAP | $35.82M | – | – |
| Q3 2026 selling, general and administrative expensesGAAP | $27.12M | – | – |
| Q3 2026 interest expenseGAAP | $32.32M | – | – |
| Q3 2026 income tax recoveryGAAP | $10.99M | – | – |
| Q3 2026 net cash used in operating activitiesGAAP | $19.99M | – | – |
| Q3 2026 purchase of property, plant and equipmentGAAP | $13.34M | – | – |
| Nine months ended September 30, 2026 total revenuesGAAP | $1.39B | – | relatively steady |
| Nine months ended September 30, 2026 operating lossGAAP | $130.6M | – | – |
| Nine months ended September 30, 2026 Operating EBITDAnon-GAAP | negative $16.0 million | – | – |
| Nine months ended September 30, 2026 net lossGAAP | $187.2M | – | – |
| Nine months ended September 30, 2026 net loss per common share, basicGAAP | $2.79 | – | – |
| Nine months ended September 30, 2026 net loss per common share, dilutedGAAP | $2.79 | – | – |
| Nine months ended September 30, 2026 net cash used in operating activitiesGAAP | $120.8M | – | – |
| Nine months ended September 30, 2026 purchase of property, plant and equipmentGAAP | $38.67M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Pulp segmentLower pulp revenues were partly offset by higher energy and chemicals revenues. Lower pulp sales volumes and realizations drove the pulp revenue decline. | $310.2M | – | decreased by approximately 8% |
| Solid wood segmentHigher revenue from all product categories except pallets increased segment revenue. | $128.6M | – | increased by approximately 10% |
| Corporate and otherRevenues from external customers were $1,860 in Q3 2026. | $1.9M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter of 2026 outlook
- NotePer unit fiber costs for German pulp mills are expected to slightly increase.
- NotePer unit fiber costs for Canadian pulp mills are expected to decrease following renegotiation of Celgar's supply contracts and improved supply.
- NoteSawmill per unit fiber costs are projected to remain flat.
- NoteThe company expects a total of 18 days of planned annual maintenance downtime at the Celgar mill.
- NoteSoftwood pulp prices are expected to modestly increase in all markets due to continued global supply constraints.
- NoteHardwood pulp prices are expected to remain relatively stable.
- NoteLumber prices are expected to be relatively flat.
- NoteThe company is optimistic it will be able to conclude the expedited chapter 11 process by the end of 2026.
Capital returns
- Q3 2026 dividends declared per common share: $ —.
- Nine months ended September 30, 2026 dividends declared per common share: $ —.
- Q3 2026 dividend payments: —.
- Nine months ended September 30, 2026 dividend payments: —.
What drove it
- The Peace River mill recognized a $13.0 million benefit from government grants in Q3 2026.
- The company secured approximately $13.0 million in grants and up to $13.5 million in low-interest repayable contributions for the Peace River mill.
- "One Goal One Hundred" delivered $22.0 million in Q3 cost savings and approximately $76.0 million since launch in April 2025.
- Pulp mills had 44 days of planned annual maintenance downtime, representing approximately 48,900 ADMTs, which adversely impacted Operating EBITDA by approximately $34.1 million.
- Pulp segment Q3 2026 Segment Operating EBITDA was $5.9 million, compared with negative $12.7 million in Q3 2025.
- Solid wood segment Q3 2026 Segment Operating EBITDA was negative $7.0 million, compared with negative $9.3 million in Q3 2025.
- Average NBSK pulp sales realizations decreased by approximately 8% to $671 per ADMT from $728 per ADMT.
- Average NBHK pulp sales realizations increased by approximately 14% to $601 per ADMT from $528 per ADMT.
- Average lumber sales realizations increased by approximately 6% to $586 per Mfbm from $553 per Mfbm.
- Manufactured products sales realizations increased by approximately 28% to $2,063 per cubic meter from $1,615 per cubic meter.
- The mass timber order book and commitments were approximately $151 million at the end of the third quarter, anchored by large-scale data center infrastructure projects.
Concerns
- Mercer expects to commence voluntary chapter 11 prepackaged cases to implement the Recapitalization.
- The company reported a Q3 2026 net loss of $59.2 million and Q3 2026 net cash used in operating activities of $19,992.
- A non-cash inventory impairment of $8.0 million was included in Q3 2026 results, primarily due to low pulp prices and high fiber costs.
- Nine-month Operating EBITDA decreased to negative $16.0 million from negative $1.9 million, primarily due to higher per unit fiber and freight costs and lower pulp sales realizations.
- Fiber costs at German pulp mills increased due to persistent regional supply shortages and competition from energy producers.
- Rosenthal incurred 24 days of unplanned downtime in the fourth quarter of 2026 following effluent treatment issues during restart.
- Soft market demand and ongoing regional overcapacity in China kept pulp prices flat in the third quarter.
- The Recapitalization is subject to customary conditions, including receipt of any requisite regulatory approvals.
What to watch
- Completion of the Recapitalization and the expected commencement and conclusion of the Chapter 11 Cases by the end of 2026.
- The exchange of approximately $1.1 billion of existing senior notes for equity, elimination of approximately $96 million of annual cash interest on senior notes, and the $400 million fully-backstopped rights offering of senior secured notes.
- The expected fourth-quarter increase in German pulp-mill fiber costs and expected decline in Canadian pulp-mill fiber costs.
- The impact of 18 days of planned annual maintenance downtime at Celgar in the fourth quarter.
- Rosenthal's operations after its fourth-quarter restart following 24 days of unplanned downtime.
- Whether contracts within the approximately $151 million mass timber order book begin contributing to results in late 2026 and into 2027.
- Delivery of the previously disclosed $100 million "One Goal One Hundred" cost-savings and operational-efficiencies target by the end of 2026.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $71.0 million.
- Cash and cash equivalents as of September 30, 2026: $71,007; December 31, 2025: $186,805.
- Restricted cash as of September 30, 2026: $5,000.
- Approximately $72.5 million was available under revolving credit facilities after the previously announced €70 million reduction in borrowing capacity under the German revolving credit facility.
- Aggregate liquidity as of September 30, 2026: approximately $143.5 million.
- Current debt as of September 30, 2026: $354,703; December 31, 2025: $13,664.
- Long-term debt as of September 30, 2026: $1,309,770; December 31, 2025: $1,605,144.
- Working capital as of September 30, 2026: $139,174; December 31, 2025: $582,176.
- Total assets as of September 30, 2026: $1,815,850; December 31, 2025: $2,041,420.
- Total shareholders' equity (deficit) as of September 30, 2026: $(158,205); December 31, 2025: $68,060.
- Q3 2026 net cash used in investing activities: $11,472; Q3 2025: $27,613.
- Q3 2026 net cash from financing activities: $24,235; Q3 2025: $10,954.
- Nine months ended September 30, 2026 net cash used in investing activities: $30,815; nine months ended September 30, 2025: $70,246.
- Nine months ended September 30, 2026 net cash from financing activities: $41,842; nine months ended September 30, 2025: $26,932.
Analysis
Mercer’s third-quarter operating performance improved materially from the prior-year and prior-quarter losses, but it remained loss-making. Revenue declined by approximately 4% year over year to $440.7 million, reflecting lower pulp volumes and realizations. Operating EBITDA improved to negative $2.9 million from negative $28.1 million in the prior-year quarter and negative $21.0 million in the second quarter, while the net loss narrowed to $59.2 million from $80.8 million in the prior-year quarter. The improvement included a $13.0 million government-grant benefit at Peace River, cost reductions and stronger energy and solid wood sales realizations, partially offset by higher fiber and freight costs and lower pulp realizations.
Management, verbatim
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.
Juan Carlos Bueno, Chief Executive Officer
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.
Juan Carlos Bueno, Chief Executive Officer
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.
Juan Carlos Bueno, Chief Executive Officer
Not in the filing
stated, not guessed- Gross profit and gross margin were not reported.
- Free cash flow was not reported.
- Share repurchases were not reported.
- Forward revenue, gross-margin, operating-expense and tax-rate guidance were not reported.
- Previous-release outlook was not provided, so comparison with prior guidance is unavailable.
- A reported total debt figure was not provided as a single line item.
- A Q3 2026 effective tax rate was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Mercer International Inc. filed a Form 8‑K reporting its Q3 2026 operating results and a restructuring support agreement.
Ticker impact
Q3 2026 results disclosed via 8‑K showing EBITDA improvement to -$2.9 M, $400 M new capital and senior note exchange.
potential modest upside as balance‑sheet improvement is priced in
The primary disclosure of a $400 M rights offering and note exchange is new and material, but the company still reports a net loss, limiting upside.
Market effects
Pulp and wood products sector may see slight valuation lift as a peer improves its balance sheet.
North American timber stocks could benefit from perceived credit improvement.
Limited; impact confined to niche industrial sector.
Counterpoint
Despite the recapitalization, continued losses and maintenance downtime could keep the stock under pressure.
Key entities
- companyMercer International Inc.
Nasdaq‑listed pulp and wood products producer.
