Ecovyst Reports Fourth Quarter 2022 Results
Ecovyst reported strong financial results for the fourth quarter and full year 2022, with sales of $820.2 million, up 34.2% year-over-year. The company achieved a net income of $69.8 million and an Adjusted EBITDA of $276.8 million, reflecting a 21.6% increase. The fourth quarter sales reached $182.8 million, up 7.4%, with a net income margin of 11.8%. The company repurchased 16.5 million shares totaling $136.7 million. Ecovyst maintained a net debt leverage ratio of 2.8x as of year-end 2022. Looking ahead, the company expects sales between $760 million to $790 million for 2023.
- Sales increased by 34.2% year-over-year, reaching $820.2 million.
- Net income surged to $69.8 million, marking a significant year-over-year increase.
- Adjusted EBITDA rose 21.6% to $276.8 million, exceeding guidance.
- Approximately 16.5 million shares repurchased, contributing to enhanced shareholder value.
- Net debt leverage ratio improved to 2.8x, down from 3.3x at year-end 2021.
- Sales in the Catalyst Technologies segment decreased, with silica catalysts down $5.2 million year-over-year.
- Continued inflationary pressures and supply chain constraints negatively impacted margins.
- Production outages due to Winter Storm Elliott may affect early 2023 sales.
Full Year 2022 Results & Highlights
-
Sales of
, up$820.2 million 34.2% year-over-year -
Net income of
, up$69.8 million , year-over-year percentage change not meaningful, with a net income margin of$68.0 million 8.5% , with diluted earnings per share of ; Adjusted net income of$0.52 , with Adjusted diluted income per share of$113.2 million $0.84 -
Adjusted EBITDA of
, up$276.8 million 21.6% year-over-year, exceeding upwardly revised company guidance -
Full year net cash from operations of
, Adjusted Free Cash Flow of$186.6 million , with net debt to net income ratio of 11.1x, and a net debt leverage ratio of 2.8x, compared to 3.3x at year-end 2021$145.8 million -
Full year share repurchases of approximately 16.5 million or
$136.7 million -
Achieved a Gold sustainability rating from
EcoVadis , placingEcovyst in the 97th percentile of companies rated in our peer group
Fourth Quarter 2022 Results & Highlights
-
Sales of
, up$182.8 million 7.4% compared to the fourth quarter of 2021 -
Net income of
, up$21.5 million 176% period-over-period, with a net income margin of11.8% , with diluted earnings per share of ; Adjusted net income of$0.17 with Adjusted diluted income per share of$31.8 million $0.25 -
Adjusted EBITDA of
, up$69.2 million 9.4% period-over-period with an Adjusted EBITDA margin of31.1% -
In connection with a secondary offering of our common stock, returned capital to shareholders by repurchasing 8,000,000 shares at an average price of
, for a total cost of$7.88 , reducing a private equity sponsor’s ownership below$63.0 million 10%
Financial results and outlook include non-GAAP financial measures. These non-GAAP measures are more fully described and are reconciled from the respective measures determined under GAAP in “Presentation of Non-GAAP Financial Measures” and the attached appendix.
“The fourth quarter of 2022 was another quarter of solid financial performance for
Fourth Quarter and Full Year 2022 Results
For the year, sales of
Sales for the quarter ended
Review of Segment Results and Business Trends
The post-pandemic macroeconomic recovery drove improved demand across most product categories, end-uses and customers throughout 2022, resulting in positive demand fundamentals for the year. Inflationary pressures in 2022, including higher costs for energy, logistics and other raw materials, continued through the fourth quarter. While contractual pass-through mechanisms and targeted price increases have served to mitigate the adverse impacts of higher variable costs on our businesses, supply chain constraints, including limited availability and higher costs for transportation and logistics, primarily in our Catalyst Technologies business, had an adverse impact on margins and profitability. In response, we have continued our efforts to minimize the associated impacts on our businesses through enhanced coordination and planning with customers and suppliers using our strategic network.
Late in the fourth quarter of 2022, our
Our regeneration services support the production of alkylate, a high value gasoline component critical for meeting stringent gasoline standards and for producing premium grade gasoline. Tightening of gasoline standards and increased demand for higher-octane premium grade gasoline to power high compression, more fuel efficient engines has resulted in higher utilization for our customers’ alkylation units.
Fourth quarter 2022 sales for
For the year, sales of
Catalyst Technologies
Our silica catalysts business supplies critical catalyst components for the production of high-density polyethylene, a high-strength and high-stiffness plastic used in bottles, containers, and molded applications and linear low-density polyethylene used predominately for films. Growth in demand for polyethylene films and packaging has continued to drive higher sales of polyethylene catalysts. We also supply specialty catalysts to customers for use in refining both traditional and renewable fuels, petrochemicals, and emission control systems for both on-road and non-road diesel engines. Demand for traditional fuels remained strong and demand for renewable fuels has increased. We also supply niche custom catalysts in the refining and petrochemical industries. We continue to expect growth in demand for catalysts used in each of these applications.
During the fourth quarter of 2022, Silica Catalysts sales were
For the year, Silica Catalyst sales of
Cash Flows and Balance Sheet
Cash flows from operating activities was
2023 Financial Outlook
Full year 2023 guidance is as follows:
-
Sales of
to$760 million 1$790 million -
Sales of
to$145 million for proportionate$155 million 50% share of Zeolyst Joint Venture, which is excluded from GAAP Sales -
Adjusted EBITDA2 of
to$285 million , up$300 million 6% from 2022 at the mid-point of the range, and inclusive of impacts from Winter Storm Elliott -
Adjusted Free Cash Flow2 of
to$115 million $130 million -
Capital expenditures of
to$60 million $70 million -
Interest expense of
to$45 million $50 million -
Depreciation & Amortization
-
Ecovyst - to$80 million $90 million -
Zeolyst J.V. -
to$14 million $16 million
-
1Sales outlook for 2023 assumes lower average sulfur prices, compared to 2022, and lower projected pass-through of sulfur costs of approximately
2In reliance upon the unreasonable efforts exemption provided under Item 10(e)(1)(i)(B) of Regulation S-K, the Company is not able to provide a reconciliation of its non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation such as certain non-cash, nonrecurring or other items that are included in net income and EBITDA as well as the related tax impacts of these items and asset dispositions / acquisitions and changes in foreign currency exchange rates that are included in cash flow, due to the uncertainty and variability of the nature and amount of these future charges and costs. Because this information is uncertain, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Stock Repurchase Authorization
In
During the second and third quarters of 2022, the Company repurchased 1,970,763 shares of its common stock on the open market at an average price of
In connection with a secondary offering of the Company’s common stock in
In connection with a secondary offering in
For possible future repurchases, the actual timing, number, and nature of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The repurchase program does not obligate the Company to acquire any number of shares in any specific period, or at all, and the repurchase program may be amended, suspended or discontinued at any time at the Company’s discretion. As of
Conference Call and Webcast Details
On
Conference Call: Investors may listen to the conference call live via telephone by dialing 1 (800) 579-2543 (domestic) or 1 (203) 518-9708 (international) and using the participant code ECVTQ422.
Webcast: An audio-only live webcast of the conference call and presentation materials can be accessed at https://investor.ecovyst.com. A replay of the conference call/webcast will be made available at https://investor.ecovyst.com/events-presentations.
About
We have two uniquely positioned specialty businesses:
Presentation of Non-GAAP Financial Measures
In addition to the results provided in accordance with
Zeolyst Joint Venture
The Company’s zeolite catalysts product group operates through its Zeolyst Joint Venture, which is accounted for as an equity method investment in accordance with GAAP. The presentation of the Zeolyst Joint Venture’s sales represents
Note on Forward-Looking Statements
Some of the information contained in this press release constitutes “forward-looking statements.” Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Examples of forward-looking statements include, but are not limited to, statements regarding our future results of operations, financial condition, liquidity, prospects, growth, strategies, capital allocation program (including the stock repurchase program), product and service offerings, expected demand trends and our 2023 financial outlook. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including tariffs and trade disputes, currency exchange rates, the effects of inflation, and other factors, including those described in the sections titled “Risk Factors” and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” in our filings with the
CONSOLIDATED STATEMENTS OF INCOME (in millions, except share and per share amounts) |
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Three months ended
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% |
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Years ended
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% |
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|
|
|
2022 |
|
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
|
2021 |
|
|
Change |
||
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|
|
||||||||||||||||||||
Sales |
|
$ |
182.8 |
|
|
$ |
170.2 |
|
|
7.4 |
% |
|
$ |
820.2 |
|
|
$ |
611.2 |
|
|
34.2 |
% |
Cost of goods sold |
|
|
133.3 |
|
|
|
115.7 |
|
|
15.2 |
% |
|
|
595.5 |
|
|
|
434.5 |
|
|
37.1 |
% |
Gross profit |
|
|
49.5 |
|
|
|
54.5 |
|
|
(9.2 |
)% |
|
|
224.7 |
|
|
|
176.7 |
|
|
27.2 |
% |
Selling, general and administrative expenses |
|
|
17.5 |
|
|
|
29.0 |
|
|
(39.7 |
)% |
|
|
85.3 |
|
|
|
97.8 |
|
|
(12.8 |
)% |
Other operating expense, net |
|
|
9.9 |
|
|
|
7.5 |
|
|
32.0 |
% |
|
|
35.0 |
|
|
|
24.3 |
|
|
44.0 |
% |
Operating income |
|
|
22.1 |
|
|
|
18.0 |
|
|
22.8 |
% |
|
|
104.4 |
|
|
|
54.6 |
|
|
91.2 |
% |
Equity in net (income) from affiliated companies |
|
|
(10.3 |
) |
|
|
(7.0 |
) |
|
47.1 |
% |
|
|
(27.7 |
) |
|
|
(27.7 |
) |
|
— |
% |
Interest expense, net |
|
|
10.3 |
|
|
|
8.8 |
|
|
17.0 |
% |
|
|
37.2 |
|
|
|
37.0 |
|
|
0.5 |
% |
Debt extinguishment costs |
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
|
26.9 |
|
|
(100.0 |
)% |
Other (income) expense, net |
|
|
(2.3 |
) |
|
|
1.4 |
|
|
(264.3 |
)% |
|
|
0.2 |
|
|
|
4.5 |
|
|
(95.6 |
)% |
Income before income taxes and noncontrolling interest |
|
|
24.4 |
|
|
|
14.8 |
|
|
64.9 |
% |
|
|
94.7 |
|
|
|
13.9 |
|
|
581.3 |
% |
Provision for income taxes |
|
|
2.9 |
|
|
|
7.0 |
|
|
(58.6 |
)% |
|
|
24.9 |
|
|
|
12.1 |
|
|
105.8 |
% |
Effective tax rate |
|
|
11.9 |
% |
|
|
47.3 |
% |
|
(74.9 |
)% |
|
|
26.3 |
% |
|
|
87.1 |
% |
|
|
|
Net income from continuing operations |
|
|
21.5 |
|
|
|
7.8 |
|
|
175.6 |
% |
|
|
69.8 |
|
|
|
1.8 |
|
|
NM |
|
Net income (loss) from discontinued operations, net of tax |
|
|
3.9 |
|
|
|
17.7 |
|
|
(78.0 |
)% |
|
|
3.9 |
|
|
|
(141.4 |
) |
|
(102.8 |
)% |
Net income (loss) |
|
|
25.4 |
|
|
|
25.5 |
|
|
— |
% |
|
|
73.7 |
|
|
|
(139.6 |
) |
|
(152.8 |
)% |
Less: Net income attributable to the noncontrolling interest - discontinued operations |
|
|
— |
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
|
0.3 |
|
|
(100.0 |
)% |
Net income (loss) attributable to |
|
$ |
25.4 |
|
|
$ |
25.5 |
|
|
(0.4 |
)% |
|
$ |
73.7 |
|
|
$ |
(139.9 |
) |
|
(152.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to |
|
|
21.5 |
|
|
|
7.8 |
|
|
|
|
|
69.8 |
|
|
|
1.8 |
|
|
|
||
Income (loss) from discontinued operations attributable to |
|
|
3.9 |
|
|
|
17.7 |
|
|
|
|
|
3.9 |
|
|
|
(141.7 |
) |
|
|
||
Net income (loss) attributable to |
|
|
25.4 |
|
|
|
25.5 |
|
|
|
|
|
73.7 |
|
|
|
(139.9 |
) |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income per share - continuing operations |
|
$ |
0.17 |
|
|
$ |
0.06 |
|
|
|
|
$ |
0.52 |
|
|
$ |
0.01 |
|
|
|
||
Diluted income per share - continuing operations |
|
$ |
0.17 |
|
|
$ |
0.06 |
|
|
|
|
$ |
0.52 |
|
|
$ |
0.01 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
125,962,111 |
|
|
|
136,256,601 |
|
|
|
|
|
133,601,322 |
|
|
|
136,167,384 |
|
|
|
||
Diluted |
|
|
127,538,343 |
|
|
|
137,528,028 |
|
|
|
|
|
135,088,172 |
|
|
|
137,708,931 |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS (in millions, except share and per share amounts) |
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|
|
|
|
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
110.9 |
|
|
$ |
140.9 |
|
Accounts receivables, net |
|
74.8 |
|
|
|
80.8 |
|
Inventories, net |
|
44.4 |
|
|
|
53.8 |
|
Derivative assets |
|
18.5 |
|
|
|
— |
|
Prepaid and other current assets |
|
19.1 |
|
|
|
16.2 |
|
Total current assets |
|
267.7 |
|
|
|
291.7 |
|
Investments in affiliated companies |
|
436.0 |
|
|
|
446.1 |
|
Property, plant and equipment, net |
|
584.9 |
|
|
|
596.2 |
|
|
|
403.2 |
|
|
|
406.1 |
|
Other intangible assets, net |
|
129.9 |
|
|
|
145.6 |
|
Right-of-use lease assets |
|
28.3 |
|
|
|
30.1 |
|
Other long-term assets |
|
34.6 |
|
|
|
15.4 |
|
Total assets |
$ |
1,884.6 |
|
|
$ |
1,931.2 |
|
LIABILITIES |
|
|
|
||||
Current maturities of long-term debt |
$ |
9.0 |
|
|
$ |
9.0 |
|
Accounts payable |
|
40.0 |
|
|
|
51.9 |
|
Operating lease liabilities—current |
|
8.2 |
|
|
|
8.3 |
|
Accrued liabilities |
|
72.2 |
|
|
|
75.9 |
|
Total current liabilities |
|
129.4 |
|
|
|
145.1 |
|
Long-term debt, excluding current portion |
|
865.9 |
|
|
|
872.8 |
|
Deferred income taxes |
|
136.2 |
|
|
|
126.7 |
|
Operating lease liabilities—noncurrent |
|
20.0 |
|
|
|
21.7 |
|
Other long-term liabilities |
|
25.8 |
|
|
|
24.2 |
|
Total liabilities |
|
1,177.3 |
|
|
|
1,190.5 |
|
Commitments and contingencies |
|
|
|
||||
EQUITY |
|
|
|
||||
Common stock ( |
|
1.4 |
|
|
|
1.4 |
|
Preferred stock ( |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,091.5 |
|
|
|
1,073.4 |
|
Accumulated deficit |
|
(242.0 |
) |
|
|
(315.7 |
) |
|
|
(149.6 |
) |
|
|
(12.6 |
) |
Accumulated other comprehensive loss |
|
6.0 |
|
|
|
(5.8 |
) |
Total equity |
|
707.3 |
|
|
|
740.7 |
|
Total liabilities and equity |
$ |
1,884.6 |
|
|
$ |
1,931.2 |
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
Years ended |
||||||
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
(in millions) |
||||||
Net income (loss) |
$ |
73.7 |
|
|
$ |
(139.6 |
) |
Net (income) loss from discontinued operations |
|
(3.9 |
) |
|
|
141.4 |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
|
65.1 |
|
|
|
66.0 |
|
Amortization |
|
14.0 |
|
|
|
13.8 |
|
Amortization of deferred financing costs and original issue discount |
|
2.0 |
|
|
|
1.9 |
|
Debt extinguishment costs |
|
— |
|
|
|
21.2 |
|
Foreign currency exchange loss |
|
1.0 |
|
|
|
4.7 |
|
Pension and postretirement healthcare benefit |
|
(1.0 |
) |
|
|
(0.3 |
) |
Deferred income tax provision (benefit) |
|
1.7 |
|
|
|
4.5 |
|
Net loss on asset disposals |
|
3.6 |
|
|
|
5.7 |
|
Stock compensation |
|
20.6 |
|
|
|
31.8 |
|
Equity in net income from affiliated companies |
|
(27.7 |
) |
|
|
(27.7 |
) |
Dividends received from affiliated companies |
|
35.0 |
|
|
|
35.0 |
|
Other, net |
|
(1.6 |
) |
|
|
(3.0 |
) |
Working capital changes that provided (used) cash, excluding the effect of acquisitions and dispositions: |
|
|
|
||||
Receivables |
|
5.5 |
|
|
|
(33.5 |
) |
Inventories |
|
9.9 |
|
|
|
0.6 |
|
Prepaids and other current assets |
|
— |
|
|
|
(7.8 |
) |
Accounts payable |
|
(10.1 |
) |
|
|
10.0 |
|
Accrued liabilities |
|
(7.4 |
) |
|
|
12.6 |
|
Net cash provided by operating activities, continuing operations |
|
180.3 |
|
|
|
137.3 |
|
Net cash provided by (used in) operating activities, discontinued operations |
|
6.3 |
|
|
|
(7.4 |
) |
Net cash provided by operating activities |
|
186.6 |
|
|
|
129.9 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Purchases of property, plant and equipment |
|
(58.9 |
) |
|
|
(60.0 |
) |
Proceeds from business divestiture, net of cash and indebtedness |
|
— |
|
|
|
978.4 |
|
Payments for business divestiture |
|
(3.7 |
) |
|
|
— |
|
Business combinations, net of cash acquired |
|
(0.5 |
) |
|
|
(42.6 |
) |
Other, net |
|
0.1 |
|
|
|
(0.1 |
) |
Net cash (used in) provided by investing activities, continuing operations |
|
(63.0 |
) |
|
|
875.7 |
|
Net cash used in investing activities, discontinued operations |
|
— |
|
|
|
(40.0 |
) |
Net cash (used in) provided by investing activities |
|
(63.0 |
) |
|
|
835.7 |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Issuance of long-term debt, net of original issue discount and financing fees |
|
— |
|
|
|
897.8 |
|
Debt issuance costs |
|
— |
|
|
|
(1.3 |
) |
Debt prepayment fees |
|
— |
|
|
|
(8.5 |
) |
Repayments of long-term debt |
|
(9.0 |
) |
|
|
(1,430.9 |
) |
Proceeds from financing obligation |
|
— |
|
|
|
16.0 |
|
Dividends paid to stockholders |
|
— |
|
|
|
(435.6 |
) |
Repurchases of common shares |
|
(136.7 |
) |
|
|
— |
|
Tax withholdings on equity award vesting |
|
(0.3 |
) |
|
|
(1.5 |
) |
Proceeds from stock options exercised |
|
0.6 |
|
|
|
0.7 |
|
Repayments of finance lease obligations |
|
(2.7 |
) |
|
|
(1.4 |
) |
Other |
|
— |
|
|
|
1.5 |
|
Net cash used in financing activities, continuing operations |
|
(148.1 |
) |
|
|
(963.1 |
) |
Net cash used in financing activities, discontinued operations |
|
— |
|
|
|
(1.1 |
) |
Net cash used in financing activities |
|
(148.1 |
) |
|
|
(964.2 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(5.5 |
) |
|
|
2.3 |
|
Net change in cash, cash equivalents and restricted cash |
|
(30.0 |
) |
|
|
3.7 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
140.9 |
|
|
|
137.2 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
110.9 |
|
|
$ |
140.9 |
|
Appendix Table A-1: Reconciliation of Net Income to Adjusted EBITDA |
||||||||||||||||
|
|
Three months ended
|
|
Years ended
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
(in millions) |
||||||||||||||
Reconciliation of net income to Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations |
|
$ |
21.5 |
|
|
$ |
7.8 |
|
|
$ |
69.8 |
|
|
$ |
1.8 |
|
Provision for income taxes |
|
|
2.9 |
|
|
|
7.0 |
|
|
|
24.9 |
|
|
|
12.1 |
|
Interest expense, net |
|
|
10.3 |
|
|
|
8.8 |
|
|
|
37.2 |
|
|
|
37.0 |
|
Depreciation and amortization |
|
|
20.4 |
|
|
|
19.6 |
|
|
|
79.2 |
|
|
|
79.7 |
|
EBITDA |
|
|
55.1 |
|
|
|
43.2 |
|
|
|
211.1 |
|
|
|
130.6 |
|
Joint venture depreciation, amortization and interest(a) |
|
|
4.0 |
|
|
|
4.2 |
|
|
|
16.0 |
|
|
|
15.6 |
|
Amortization of investment in affiliate step-up(b) |
|
|
1.6 |
|
|
|
1.6 |
|
|
|
6.4 |
|
|
|
6.5 |
|
Debt extinguishment costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26.9 |
|
Net loss on asset disposals(c) |
|
|
2.4 |
|
|
|
1.2 |
|
|
|
3.6 |
|
|
|
5.7 |
|
Foreign currency exchange (gain) loss(d) |
|
|
(0.8 |
) |
|
|
(0.1 |
) |
|
|
1.4 |
|
|
|
4.7 |
|
LIFO (benefit) expense(e) |
|
|
(0.2 |
) |
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
(1.9 |
) |
Transaction and other related costs(f) |
|
|
0.1 |
|
|
|
0.4 |
|
|
|
7.0 |
|
|
|
2.0 |
|
Equity-based compensation |
|
|
3.2 |
|
|
|
9.0 |
|
|
|
20.6 |
|
|
|
31.8 |
|
Restructuring, integration and business optimization expenses(g) |
|
|
5.2 |
|
|
|
0.6 |
|
|
|
11.6 |
|
|
|
3.9 |
|
Other(h) |
|
|
(1.4 |
) |
|
|
3.0 |
|
|
|
(0.7 |
) |
|
|
1.8 |
|
Adjusted EBITDA |
|
$ |
69.2 |
|
|
$ |
63.2 |
|
|
$ |
276.8 |
|
|
$ |
227.6 |
|
Descriptions to Ecovyst Non-GAAP Reconciliations |
|
(a) |
We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalyst Technologies segment includes our |
(b) |
Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of |
(c) |
When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use. |
(d) |
Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income related to the non-permanent intercompany debt denominated in local currency translated to |
(e) |
Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the |
(f) |
Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations. |
(g) |
Includes the impact of restructuring, integration and business optimization expenses which are incremental costs that are not representative of our ongoing business operations. |
(h) |
Other costs consist of adjustments for defined benefit pension plan (benefit) costs and certain expenses that are not core to our ongoing business operations, including environmental remediation-related costs, capital and franchise taxes. All of our defined benefit pension plan obligations are under defined benefit pension plans that are frozen. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions). |
Appendix Table A-2: Reconciliation of Net Income to Adjusted Net Income(1) |
||||||||||||||||||||||
|
|
Three months ended |
||||||||||||||||||||
|
|
2022 |
|
2021 |
||||||||||||||||||
|
|
Pre-tax |
|
Tax expense (benefit) |
|
After-tax |
|
Pre-tax |
|
Tax expense (benefit) |
|
After-tax |
||||||||||
|
|
(in millions) |
||||||||||||||||||||
Net income from continuing operations |
|
$ |
24.4 |
|
|
$ |
2.9 |
|
|
$ |
21.5 |
|
|
$ |
14.8 |
|
$ |
7.0 |
|
|
$ |
7.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income per share - continuing operations |
|
|
|
|
|
$ |
0.17 |
|
|
|
|
|
|
$ |
0.06 |
|||||||
Diluted income per share - continuing operations |
|
|
|
|
|
$ |
0.17 |
|
|
|
|
|
|
$ |
0.06 |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income from continuing operations |
|
|
24.4 |
|
|
|
2.9 |
|
|
|
21.5 |
|
|
|
14.8 |
|
|
7.0 |
|
|
|
7.8 |
Amortization of investment in affiliate step-up(b) |
|
|
1.6 |
|
|
|
0.2 |
|
|
|
1.4 |
|
|
|
1.6 |
|
|
0.2 |
|
|
|
1.4 |
Debt extinguishment costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(0.9 |
) |
|
|
0.9 |
Net loss on asset disposals(c) |
|
|
2.4 |
|
|
|
0.5 |
|
|
|
1.9 |
|
|
|
1.1 |
|
|
0.1 |
|
|
|
1.0 |
Foreign currency exchange gain(d) |
|
|
(0.8 |
) |
|
|
(0.1 |
) |
|
|
(0.7 |
) |
|
|
— |
|
|
— |
|
|
|
— |
LIFO benefit(e) |
|
|
(0.2 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
— |
|
|
|
— |
Transaction and other related costs(f) |
|
|
0.1 |
|
|
|
(0.6 |
) |
|
|
0.7 |
|
|
|
0.4 |
|
|
(0.1 |
) |
|
|
0.5 |
Equity-based compensation |
|
|
3.2 |
|
|
|
(0.7 |
) |
|
|
3.9 |
|
|
|
9.0 |
|
|
1.3 |
|
|
|
7.7 |
Restructuring, integration and business optimization expenses(g) |
|
|
5.1 |
|
|
|
0.9 |
|
|
|
4.2 |
|
|
|
0.6 |
|
|
0.1 |
|
|
|
0.5 |
Other(h) |
|
|
(1.3 |
) |
|
|
(0.3 |
) |
|
|
(1.0 |
) |
|
|
3.2 |
|
|
0.9 |
|
|
|
2.3 |
Adjusted net income, includes Impact of Discrete Tax Items |
|
|
34.5 |
|
|
|
2.7 |
|
|
|
31.8 |
|
|
|
30.7 |
|
|
8.6 |
|
|
|
22.1 |
Impact of Discrete Tax Items(2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
(0.8 |
) |
|
|
0.8 |
Adjusted net income(1) |
|
$ |
34.5 |
|
|
$ |
2.7 |
|
|
$ |
31.8 |
|
|
$ |
30.7 |
|
$ |
7.8 |
|
|
$ |
22.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income per share |
|
|
|
|
|
$ |
0.25 |
|
|
|
|
|
|
$ |
0.17 |
|||||||
Diluted income per share |
|
|
|
|
|
$ |
0.25 |
|
|
|
|
|
|
$ |
0.17 |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
|
|
|
|
125,962,111 |
|
|
|
|
|
|
|
136,256,601 |
|||||||
Diluted |
|
|
|
|
|
|
127,538,343 |
|
|
|
|
|
|
|
137,528,028 |
See Appendix Table A-1 for Descriptions to Ecovyst Non-GAAP Reconciliations in the table above. The adjustments to net income attributable to
|
|
Years ended |
||||||||||||||||||||||
|
|
2022 |
|
2021 |
||||||||||||||||||||
|
|
Pre-tax |
|
Tax expense (benefit) |
|
After-tax |
|
Pre-tax |
|
Tax expense (benefit) |
|
After-tax |
||||||||||||
|
|
(in millions) |
||||||||||||||||||||||
Net income from continuing operations |
|
$ |
94.7 |
|
|
$ |
24.9 |
|
|
$ |
69.8 |
|
|
$ |
13.9 |
|
|
$ |
12.1 |
|
|
$ |
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic income per share - continuing operations |
|
|
|
|
|
$ |
0.52 |
|
|
|
|
|
|
$ |
0.01 |
|
||||||||
Diluted income per share - continuing operations |
|
|
|
|
|
$ |
0.52 |
|
|
|
|
|
|
$ |
0.01 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income attributable to |
|
|
94.7 |
|
|
|
24.9 |
|
|
|
69.8 |
|
|
|
13.9 |
|
|
|
12.1 |
|
|
|
1.8 |
|
Amortization of investment in affiliate step-up(b) |
|
|
6.4 |
|
|
|
1.5 |
|
|
|
4.9 |
|
|
|
6.5 |
|
|
|
1.6 |
|
|
|
4.9 |
|
Debt extinguishment costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26.9 |
|
|
|
6.6 |
|
|
|
20.3 |
|
Net loss on asset disposals(c) |
|
|
3.6 |
|
|
|
0.9 |
|
|
|
2.7 |
|
|
|
5.7 |
|
|
|
1.4 |
|
|
|
4.3 |
|
Foreign currency exchange loss(d) |
|
|
1.4 |
|
|
|
0.4 |
|
|
|
1.0 |
|
|
|
4.7 |
|
|
|
1.0 |
|
|
|
3.7 |
|
LIFO benefit(e) |
|
|
(0.2 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(1.9 |
) |
|
|
(0.5 |
) |
|
|
(1.4 |
) |
Transaction and other related costs(f) |
|
|
7.0 |
|
|
|
1.1 |
|
|
|
5.9 |
|
|
|
2.0 |
|
|
|
0.5 |
|
|
|
1.5 |
|
Equity-based compensation |
|
|
20.6 |
|
|
|
(0.1 |
) |
|
|
20.7 |
|
|
|
31.8 |
|
|
|
7.7 |
|
|
|
24.1 |
|
Restructuring, integration and business optimization expenses(g) |
|
|
11.6 |
|
|
|
2.8 |
|
|
|
8.8 |
|
|
|
3.9 |
|
|
|
0.7 |
|
|
|
3.2 |
|
Other(h) |
|
|
(0.7 |
) |
|
|
(0.2 |
) |
|
|
(0.5 |
) |
|
|
1.8 |
|
|
|
0.7 |
|
|
|
1.1 |
|
Adjusted net income, includes Impact of Discrete Tax Items |
|
|
144.4 |
|
|
|
31.2 |
|
|
|
113.2 |
|
|
|
95.3 |
|
|
|
31.8 |
|
|
|
63.5 |
|
Impact of Discrete Tax Items(2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6.1 |
) |
|
|
6.1 |
|
Adjusted net income(1) |
|
$ |
144.4 |
|
|
$ |
31.2 |
|
|
$ |
113.2 |
|
|
$ |
95.3 |
|
|
$ |
25.7 |
|
|
$ |
69.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic income per share |
|
|
|
|
|
$ |
0.85 |
|
|
|
|
|
|
$ |
0.51 |
|
||||||||
Diluted income per share |
|
|
|
|
|
$ |
0.84 |
|
|
|
|
|
|
$ |
0.51 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic |
|
|
|
|
|
|
133,601,322 |
|
|
|
|
|
|
|
136,167,384 |
|
||||||||
Diluted |
|
|
|
|
|
|
135,088,172 |
|
|
|
|
|
|
|
137,708,931 |
|
(1) |
We define adjusted net income as net income attributable to |
(2) |
Represents intraperiod allocation rules related to a change in the |
Appendix Table A-3: Business Segment Sales and Adjusted EBITDA |
||||||||||||||||||||||
|
|
Three months ended
|
|
|
|
Years ended
|
|
|
||||||||||||||
|
|
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
||||||||||
|
|
|
||||||||||||||||||||
Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
159.8 |
|
|
$ |
142.0 |
|
|
12.5 |
% |
|
$ |
702.5 |
|
|
$ |
500.5 |
|
|
40.4 |
% |
Catalyst Technologies |
|
|
23.0 |
|
|
|
28.2 |
|
|
(18.4 |
)% |
|
|
117.7 |
|
|
|
110.7 |
|
|
6.3 |
% |
Total sales |
|
$ |
182.8 |
|
|
$ |
170.2 |
|
|
7.4 |
% |
|
$ |
820.2 |
|
|
$ |
611.2 |
|
|
34.2 |
% |
|
|
$ |
39.9 |
|
|
$ |
36.3 |
|
|
9.9 |
% |
|
$ |
132.6 |
|
|
$ |
131.3 |
|
|
1.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
$ |
54.4 |
|
|
$ |
52.3 |
|
|
4.0 |
% |
|
$ |
227.8 |
|
|
$ |
177.7 |
|
|
28.2 |
% |
Catalyst Technologies |
|
|
20.3 |
|
|
|
23.4 |
|
|
(13.2 |
)% |
|
|
78.0 |
|
|
|
88.0 |
|
|
(11.4 |
)% |
Unallocated corporate expenses |
|
|
(5.5 |
) |
|
|
(12.5 |
) |
|
(55.7 |
)% |
|
|
(29.0 |
) |
|
|
(38.1 |
) |
|
(24.0 |
)% |
Total Adjusted EBITDA |
|
$ |
69.2 |
|
|
$ |
63.2 |
|
|
9.4 |
% |
|
$ |
276.8 |
|
|
$ |
227.6 |
|
|
21.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
34.0 |
% |
|
|
36.8 |
% |
|
|
|
|
32.4 |
% |
|
|
35.5 |
% |
|
|
||
Catalyst Technologies(1) |
|
|
32.3 |
% |
|
|
36.3 |
% |
|
|
|
|
31.2 |
% |
|
|
36.4 |
% |
|
|
||
Total Adjusted EBITDA Margin(1) |
|
|
31.1 |
% |
|
|
30.6 |
% |
|
|
|
|
29.0 |
% |
|
|
30.7 |
% |
|
|
(1) |
Adjusted EBITDA margin calculation includes proportionate |
Appendix Table A-4: Adjusted Free Cash Flow |
||||||||
|
|
Years ended
|
||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(in millions) |
||||||
Net cash provided by operating activities, continuing operations |
|
$ |
180.3 |
|
|
$ |
137.3 |
|
Net cash (used in) provided by operating activities, discontinued operations |
|
|
6.3 |
|
|
|
(7.4 |
) |
Net cash provided by operating activities |
|
|
186.6 |
|
|
|
129.9 |
|
|
|
|
|
|
||||
Less: |
|
|
|
|
||||
Purchases of property, plant and equipment, continuing operations |
|
|
(58.9 |
) |
|
|
(60.0 |
) |
Purchases of property, plant and equipment, discontinued operations |
|
|
— |
|
|
|
(31.0 |
) |
Purchases of property, plant and equipment(1) |
|
|
(58.9 |
) |
|
|
(91.0 |
) |
|
|
|
|
|
||||
Free cash flow |
|
|
127.7 |
|
|
|
38.9 |
|
|
|
|
|
|
||||
Adjustments to free cash flow: |
|
|
|
|
||||
Proceeds from sale of assets |
|
|
— |
|
|
|
0.3 |
|
Net interest proceeds on currency swaps |
|
|
— |
|
|
|
2.3 |
|
Cash paid for costs related to segment disposals |
|
|
18.1 |
|
|
|
46.0 |
|
Cash paid for debt financing costs included in cash from operating activities |
|
|
— |
|
|
|
5.7 |
|
|
|
|
|
|
||||
Adjusted free cash flow(2) |
|
$ |
145.8 |
|
|
$ |
93.2 |
|
|
|
|
|
|
||||
Net cash provided by investing activities(3) |
|
$ |
(63.0 |
) |
|
$ |
835.7 |
|
Net cash used in financing activities |
|
$ |
(148.1 |
) |
|
$ |
(964.2 |
) |
(1) |
Excludes the Company’s proportionate |
(2) |
We define adjusted free cash flow as net cash provided by operating activities less purchases of property, plant and equipment, adjusted for proceeds from sale of assets and net interest proceeds on swaps designated as net investment hedges and the cash paid for costs related to segment disposals. Adjusted free cash flow is a non-GAAP financial measure that we believe will enhance a prospective investor’s understanding of our ability to generate additional cash from operations, including the reduction in cash paid for interest related to our cross-currency interest rate swaps, and is an important financial measure for use in evaluating our financial performance. Our presentation of adjusted free cash flow is not intended to replace, and should not be considered superior to, the presentation of our net cash provided by operating activities determined in accordance with GAAP. Additionally, our definition of adjusted free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view adjusted free cash flow as a measure that provides supplemental information to our consolidated statements of cash flows. |
(3) |
Net cash used in investing activities includes purchases of property, plant and equipment, proceeds from sale of assets, and net interest proceeds on swaps designated as net investment hedges, which are also included in our computation of adjusted free cash flow. |
Appendix Table A-5: Net Debt Leverage Ratio |
|||||
|
|
|
|
||
In millions, except ratios |
|
|
|
||
Total Debt |
$ |
886.5 |
|
$ |
895.5 |
Less: |
|
|
|
||
Cash and cash equivalents |
|
110.9 |
|
|
140.9 |
Net Debt |
$ |
775.6 |
|
$ |
754.6 |
|
|
|
|
||
Net Income |
|
69.8 |
|
|
1.8 |
Adjusted EBITDA(1) |
|
276.8 |
|
|
227.6 |
|
|
|
|
||
Net Debt to Net Income Ratio |
11.1 x |
|
419.2 x |
||
Net Debt Leverage Ratio |
2.8 x |
|
3.3 x |
____________________
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230228005395/en/
Investor Contact:
(484) 617-1225
gene.shiels@ecovyst.com
Source:
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