Ecovyst Reports Third Quarter 2022 Results and Affirms Adjusted EBITDA Guidance
Ecovyst reported third-quarter 2022 results with sales of $233 million, a 39% increase from the same quarter in 2021. Net income rose to $21 million, yielding diluted earnings per share of $0.16. Adjusted EBITDA reached $75 million, up 9% year-over-year. The company affirmed its guidance, lowering sales expectations to $810 million to $830 million due to anticipated lower sulfur costs. Year-to-date cash from operations was $109 million, with reduced net leverage at 2.8x. Share buybacks totaled 7,577,640 shares in Q3 at an average price of $8.56.
- Sales increased by 39% compared to Q3 2021, indicating strong demand.
- Net income rose to $21 million, a $17 million increase year-over-year.
- Adjusted EBITDA increased by 9% to $75 million, showing effective cost management.
- Reduced net leverage ratio to 2.8x from 3.3x year-end 2021, improving financial stability.
- Significant share repurchases, totaling 7,577,640 shares at $8.56 per share.
- Sales guidance reduced to $810 million to $830 million due to lower expected sulfur costs.
- Adjusted EBITDA margin impacted negatively by over 400 basis points due to increased sulfur costs.
Third Quarter 2022 Results & Highlights
-
Sales of
, up$233 million 39% compared to the third quarter of 2021 -
Net income of
with diluted earnings per share of$21 million ; Adjusted net income of$0.16 with Adjusted diluted earnings per share of$31 million $0.23 -
Adjusted EBITDA of
, up$75 million 9% year-over-year with Adjusted EBITDA margins of29% -
Year-to-date net cash from operations of
, Adjusted Free Cash Flow of$109 million , and reduced net leverage ratio to 2.8x, compared to 3.3x at year-end 2021$85 million -
Repurchased 7,577,640 shares at an average price of
, for total cost of$8.56 .$65 million
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.
Third Quarter 2022 Results
Sales for the quarter ended
Net income was
“Ecovyst delivered strong results for the third quarter of 2022, powered by a continued growth in sales resulting from favorable demand fundamentals for Ecovyst’s products and services. In addition, continued strong pricing significantly mitigated inflationary pressures” said
Review of Segment Results and Business Trends
The post-pandemic macroeconomic recovery in 2021 that drove improved demand across most product categories, end-uses and customers has continued in 2022, resulting in positive demand fundamentals for the first nine months of the year. We anticipate relative stability in demand over the balance of 2022. Inflationary pressures, including higher costs for sulfur, energy, logistics and other raw materials, also continued through the third quarter. However, 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, have remained a factor. In response, we have continued efforts to minimize the associated impact on our businesses through enhanced coordination and planning with customers and suppliers using our strategic network.
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 growing demand for premium grade gasoline to power high compression, more efficient engines has resulted in higher utilization for our customers’ alkylation units. High refinery utilization and strong gasoline demand through the third quarter of 2022 continued to support production of alkylate, translating into robust demand for our regeneration services. Sulfuric acid is one of the most widely used chemicals and it plays a key role in producing a wide array of materials, particularly those supporting green infrastructure. Our sales of virgin sulfuric acid continued to benefit from healthy demand in the mining segment for metals and minerals that provide conductivity in low carbon technologies, as well as strong demand from numerous industrial segments, including construction, auto, and packaging materials. We believe sustainability trends will continue to favor our treatment services business as customers seek the sustainability-focused waste solutions offered by
Sales of
Catalyst Technologies
Growth in demand for polyethylene films and packaging has continued to drive higher sales of polyethylene catalysts. In addition, demand for traditional fuels remains strong and demand for renewable fuels increased. We continue to expect growth in demand for catalysts used in these applications. Higher demand for refined products has resulted in high refinery industry utilization and high refining margins, as well as the deferral of planned turnarounds as refiners seek to maximize profitability. As a result, this delay in planned turnarounds has impacted the timing of certain catalysts sales.
During the third quarter of 2022, Silica catalysts sales were
Cash Flows and Balance Sheet
Cash flows from operating activities was
2022 Financial Outlook
Full Year 2022 Guidance is as follows:
-
Sales of
to$810 million 1 (decreased from$830 million to$830 million to reflect lower anticipated sulfur costs)$850 million -
Sales of
to$135 million for proportionate$145 million 50% share of Zeolyst Joint Venture, which is excluded from GAAP Sales -
Adjusted EBITDA of
to$265 million , up$275 million 19% from 2021 at the mid-point of the range -
Adjusted Free Cash Flow of
to$115 million $125 million -
Capital Expenditures of
to$55 million $65 million
1Sales outlook for 2022 includes approximately
Stock Repurchase Authorization
In
During the third quarter of 2022, the Company repurchased 1,077,640 shares of its common stock on the open market at an average price of
Conference Call and Webcast Details
On
Conference Call: Investors may listen to the conference call live via telephone by dialing 1 (800) 245-3047 (domestic) or 1 (203) 518-9765 (international) and use the participant code ECVTQ322.
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
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.
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 2022 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 the COVID-19 pandemic, tariffs and trade disputes, currency exchange rates, the effects of inflation, the ongoing war in
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in millions, except share and per share amounts) |
|||||||||||||||||||||
|
Three months ended
|
|
|
|
Nine months ended
|
|
|
||||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
||
|
|
||||||||||||||||||||
Sales |
$ |
232.5 |
|
|
$ |
167.4 |
|
|
38.9 % |
|
$ |
637.4 |
|
|
$ |
441.0 |
|
|
44.5 % |
||
Cost of goods sold |
|
164.8 |
|
|
|
113.8 |
|
|
44.8 % |
|
|
462.2 |
|
|
|
318.8 |
|
|
45.0 % |
||
Gross profit |
|
67.7 |
|
|
|
53.6 |
|
|
26.3 % |
|
|
175.3 |
|
|
|
122.2 |
|
|
43.5 % |
||
Selling, general and administrative expenses |
|
21.5 |
|
|
|
24.8 |
|
|
(13.3) % |
|
|
67.8 |
|
|
|
68.8 |
|
|
(1.5) % |
||
Other operating expense, net |
|
7.7 |
|
|
|
6.3 |
|
|
22.2 % |
|
|
25.1 |
|
|
|
16.8 |
|
|
49.4 % |
||
Operating income |
|
38.5 |
|
|
|
22.5 |
|
|
71.1 % |
|
|
82.4 |
|
|
|
36.6 |
|
|
125.1 % |
||
Equity in net (income) from affiliated companies |
|
(3.2) |
|
|
(8.8) |
|
(63.6) % |
|
|
(17.4) |
|
|
(20.7) |
|
(15.9) % |
||||||
Interest expense, net |
|
9.5 |
|
|
|
9.0 |
|
|
5.6 % |
|
|
26.9 |
|
|
|
28.2 |
|
|
(4.6) % |
||
Debt extinguishment costs |
|
— |
|
|
|
15.2 |
|
|
(100.0) % |
|
|
— |
|
|
|
26.9 |
|
|
(100.0) % |
||
Other expense (income), net |
|
1.9 |
|
|
|
(0.2) |
|
NM |
|
|
|
2.5 |
|
|
|
3.1 |
|
|
(19.4) % |
||
Income (loss) before income taxes and noncontrolling interest |
|
30.3 |
|
|
|
7.3 |
|
|
315.1 % |
|
|
70.4 |
|
|
|
(0.9) |
|
NM |
|
||
Provision for income taxes |
|
9.0 |
|
|
|
2.6 |
|
|
246.2 % |
|
|
22.0 |
|
|
|
5.1 |
|
|
331.4 % |
||
Effective tax rate |
|
|
|
|
35.6 % |
|
|
|
|
31.2 % |
|
|
(610.9) % |
|
|
||||||
Net income (loss) from continuing operations |
|
21.3 |
|
|
|
4.7 |
|
|
353.2 % |
|
|
48.4 |
|
|
|
(6.0) |
|
(906.7) % |
|||
Net loss from discontinued operations, net of tax |
|
— |
|
|
|
(75.9 |
) |
|
(100.0) % |
|
|
— |
|
|
|
(159.1) |
|
(100.0) % |
|||
Net income (loss) |
|
21.3 |
|
|
|
(71.2) |
|
(129.9) % |
|
|
48.4 |
|
|
|
(165.1) |
|
(129.3) % |
||||
Less: Net income attributable to the noncontrolling interest—discontinued operations |
|
— |
|
|
|
0.1 |
|
|
(100.0) % |
|
|
— |
|
|
|
0.3 |
|
|
(100.0) % |
||
Net income (loss) attributable to |
$ |
21.3 |
|
|
$ |
(71.3) |
|
(129.9) % |
|
$ |
48.4 |
|
|
$ |
(165.4) |
|
(129.3) % |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations attributable to |
$ |
21.3 |
|
|
$ |
4.7 |
|
|
|
|
$ |
48.4 |
|
|
$ |
(6.0) |
|
|
|||
Loss from discontinued operations attributable to |
$ |
— |
|
|
$ |
(76.0) |
|
|
|
$ |
— |
|
|
$ |
(159.4) |
|
|
||||
Net income (loss) attributable to |
$ |
21.3 |
|
|
$ |
(71.3) |
|
|
|
$ |
48.4 |
|
|
$ |
(165.4) |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic income (loss) per share—continuing operations |
$ |
0.16 |
|
|
$ |
0.03 |
|
|
|
|
$ |
0.36 |
|
|
$ |
(0.04) |
|
|
|||
Diluted income (loss) per share—continuing operations |
$ |
0.16 |
|
|
$ |
0.03 |
|
|
|
|
$ |
0.35 |
|
|
$ |
(0.04) |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
132,622,105 |
|
|
|
136,129,591 |
|
|
|
|
|
136,115,598 |
|
|
|
136,111,555 |
|
|
|
||
Diluted |
|
134,096,839 |
|
|
|
137,354,427 |
|
|
|
|
|
137,666,215 |
|
|
|
136,111,555 |
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share and per share amounts) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
121.4 |
|
|
$ |
140.9 |
|
Accounts receivable, net |
|
107.0 |
|
|
|
80.8 |
|
Inventories, net |
|
49.7 |
|
|
|
53.8 |
|
Prepaid and other current assets |
|
46.1 |
|
|
|
16.2 |
|
Total current assets |
|
324.2 |
|
|
|
291.7 |
|
Investments in affiliated companies |
|
426.7 |
|
|
|
446.1 |
|
Property, plant and equipment, net |
|
581.4 |
|
|
|
596.2 |
|
|
|
401.2 |
|
|
|
406.1 |
|
Other intangible assets, net |
|
132.3 |
|
|
|
145.6 |
|
Right-of-use lease assets |
|
29.7 |
|
|
|
30.1 |
|
Other long-term assets |
|
36.3 |
|
|
|
15.4 |
|
Total assets |
$ |
1,931.8 |
|
|
$ |
1,931.2 |
|
LIABILITIES |
|
|
|
||||
Current maturities of long-term debt |
$ |
9.0 |
|
|
$ |
9.0 |
|
Accounts payable |
|
52.0 |
|
|
|
51.9 |
|
Operating lease liabilities—current |
|
8.6 |
|
|
|
8.3 |
|
Accrued liabilities |
|
65.1 |
|
|
|
75.9 |
|
Total current liabilities |
|
134.7 |
|
|
|
145.1 |
|
Long-term debt, excluding current portion |
|
867.6 |
|
|
|
872.8 |
|
Deferred income taxes |
|
148.0 |
|
|
|
126.7 |
|
Operating lease liabilities—noncurrent |
|
21.0 |
|
|
|
21.7 |
|
Other long-term liabilities |
|
21.0 |
|
|
|
24.2 |
|
Total liabilities |
|
1,192.3 |
|
|
|
1,190.5 |
|
Commitments and contingencies |
|
|
|
||||
EQUITY |
|
|
|
||||
Common stock ( |
|
1.4 |
|
|
|
1.4 |
|
Preferred stock ( |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,088.7 |
|
|
|
1,073.4 |
|
Accumulated deficit |
|
(267.3 |
) |
|
|
(315.7 |
) |
|
|
(86.6 |
) |
|
|
(12.6 |
) |
Accumulated other comprehensive income (loss) |
|
3.3 |
|
|
|
(5.8 |
) |
Total equity |
|
739.5 |
|
|
|
740.7 |
|
Total liabilities and equity |
$ |
1,931.8 |
|
|
$ |
1,931.2 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
Nine months ended
|
||||||
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
(in millions) |
||||||
Net income (loss) |
$ |
48.4 |
|
|
$ |
(165.1 |
) |
Net loss from discontinued operations |
|
— |
|
|
|
159.1 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
|
48.3 |
|
|
|
49.9 |
|
Amortization |
|
10.5 |
|
|
|
10.2 |
|
Amortization of deferred financing costs and original issue discount |
|
1.5 |
|
|
|
1.4 |
|
Debt extinguishment costs |
|
— |
|
|
|
12.8 |
|
Foreign currency exchange loss |
|
2.2 |
|
|
|
4.8 |
|
Deferred income tax provision |
|
12.5 |
|
|
|
4.3 |
|
Net loss on asset disposals |
|
1.2 |
|
|
|
4.5 |
|
Stock compensation |
|
17.4 |
|
|
|
22.8 |
|
Equity in net income from affiliated companies |
|
(17.4 |
) |
|
|
(20.7 |
) |
Dividends received from affiliated companies |
|
30.0 |
|
|
|
20.0 |
|
Other, net |
|
(2.8 |
) |
|
|
6.7 |
|
Working capital changes that provided (used) cash, excluding the effect of acquisitions and dispositions: |
|
|
|
||||
Receivables |
|
(28.4 |
) |
|
|
(33.8 |
) |
Inventories |
|
3.2 |
|
|
|
6.1 |
|
Prepaids and other current assets |
|
(5.2 |
) |
|
|
(8.4 |
) |
Accounts payable |
|
2.0 |
|
|
|
10.1 |
|
Accrued liabilities |
|
(14.1 |
) |
|
|
7.5 |
|
Net cash provided by operating activities, continuing operations |
|
109.3 |
|
|
|
92.3 |
|
Net cash used by operating activities, discontinued operations |
|
— |
|
|
|
(7.4 |
) |
Net cash provided by operating activities |
|
109.3 |
|
|
|
84.9 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property, plant and equipment |
|
(39.5 |
) |
|
|
(44.6 |
) |
Proceeds from business divestiture, net of cash |
|
— |
|
|
|
980.4 |
|
Payments for business divestiture, net of cash |
|
(3.7 |
) |
|
|
— |
|
Business combinations, net of cash acquired |
|
(0.5 |
) |
|
|
(42.8 |
) |
Other, net |
|
0.1 |
|
|
|
(0.1 |
) |
Net cash (used in) provided by investing activities, continuing operations |
|
(43.6 |
) |
|
|
892.9 |
|
Net cash used in investing activities, discontinued operations |
|
— |
|
|
|
(40.9 |
) |
Net cash (used in) provided by investing activities |
|
(43.6 |
) |
|
|
852.0 |
|
Cash flows from financing activities: |
|
|
|
||||
Issuance of long-term debt, net of discount |
|
— |
|
|
|
897.8 |
|
Debt issuance costs |
|
— |
|
|
|
(1.3 |
) |
Repayments of long-term debt |
|
(6.8 |
) |
|
|
(1,428.6 |
) |
Debt prepayment fees |
|
— |
|
|
|
(8.5 |
) |
Proceeds from failed sale-leaseback |
|
— |
|
|
|
14.6 |
|
Dividends paid to stockholders |
|
— |
|
|
|
(435.6 |
) |
Repurchases of common shares |
|
(73.7 |
) |
|
|
— |
|
Tax withholdings on equity award vesting |
|
(0.3 |
) |
|
|
(1.5 |
) |
Proceeds from stock options exercised |
|
0.1 |
|
|
|
0.2 |
|
Repayment of financing obligations |
|
(1.8 |
) |
|
|
(0.5 |
) |
Other, net |
|
(0.1 |
) |
|
|
(0.1 |
) |
Net cash used in financing activities, continuing operations |
|
(82.6 |
) |
|
|
(963.5 |
) |
Net cash used in financing activities, discontinued operations |
|
— |
|
|
|
(1.1 |
) |
Net cash used in financing activities |
|
(82.6 |
) |
|
|
(964.6 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(2.6 |
) |
|
|
(4.7 |
) |
Net change in cash and cash equivalents |
|
(19.5 |
) |
|
|
(32.4 |
) |
Cash and cash equivalents at beginning of period |
|
140.9 |
|
|
|
137.2 |
|
Cash and cash equivalents at end of period |
|
121.4 |
|
|
|
104.8 |
|
Less: cash, cash equivalents, and restricted cash of discontinued operations |
|
— |
|
|
|
— |
|
Cash and cash equivalents at end of period of continuing operations |
$ |
121.4 |
|
|
$ |
104.8 |
|
Appendix Table A-1: Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|||||||||||||||
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(in millions) |
||||||||||||||
Reconciliation of net income (loss) from continuing operations to Adjusted EBITDA |
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations |
$ |
21.3 |
|
|
$ |
4.7 |
|
|
$ |
48.4 |
|
|
$ |
(6.0 |
) |
Provision for income taxes |
|
9.0 |
|
|
|
2.6 |
|
|
|
22.0 |
|
|
|
5.1 |
|
Interest expense, net |
|
9.5 |
|
|
|
9.0 |
|
|
|
26.9 |
|
|
|
28.2 |
|
Depreciation and amortization |
|
19.6 |
|
|
|
20.6 |
|
|
|
58.8 |
|
|
|
60.1 |
|
EBITDA |
|
59.4 |
|
|
|
36.9 |
|
|
|
156.1 |
|
|
|
87.4 |
|
Joint venture depreciation, amortization and interest(a) |
|
3.9 |
|
|
|
4.1 |
|
|
|
12.0 |
|
|
|
11.4 |
|
Amortization of investment in affiliate step-up(b) |
|
1.6 |
|
|
|
1.6 |
|
|
|
4.8 |
|
|
|
4.9 |
|
Debt extinguishment costs |
|
— |
|
|
|
15.2 |
|
|
|
— |
|
|
|
26.9 |
|
Net loss on asset disposals(c) |
|
0.5 |
|
|
|
2.2 |
|
|
|
1.2 |
|
|
|
4.5 |
|
Foreign currency exchange loss(d) |
|
1.0 |
|
|
|
0.9 |
|
|
|
2.2 |
|
|
|
4.8 |
|
LIFO benefit(e) |
|
(0.4 |
) |
|
|
(1.3 |
) |
|
|
— |
|
|
|
(2.0 |
) |
Transaction and other related costs(f) |
|
1.8 |
|
|
|
0.5 |
|
|
|
6.9 |
|
|
|
1.6 |
|
Equity-based compensation |
|
4.7 |
|
|
|
10.2 |
|
|
|
17.4 |
|
|
|
22.8 |
|
Restructuring, integration and business optimization expenses(g) |
|
1.3 |
|
|
|
0.1 |
|
|
|
6.4 |
|
|
|
2.4 |
|
Defined benefit pension plan expense (benefit)(h) |
|
0.3 |
|
|
|
(1.0 |
) |
|
|
(0.8 |
) |
|
|
(2.2 |
) |
Other(i) |
|
1.3 |
|
|
|
— |
|
|
|
1.4 |
|
|
|
1.9 |
|
Adjusted EBITDA |
$ |
75.4 |
|
|
$ |
69.4 |
|
|
$ |
207.6 |
|
|
$ |
164.4 |
|
Descriptions to Ecovyst Non-GAAP Reconciliations |
||
(a) |
We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because the 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 primarily 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) |
Represents adjustments for defined benefit pension plan (benefit) costs in our statements of income. All of our defined benefit pension plan obligations are under defined benefit pension plans that are frozen. As such, we do not view such income or expenses as core to our ongoing business operations. |
|
(i) |
Other costs consist of certain expenses that are not core to our ongoing business operations, including environmental remediation-related costs, capital and franchise taxes. 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 (Loss) 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 |
$ |
30.3 |
|
|
$ |
9.0 |
|
|
$ |
21.3 |
|
|
$ |
7.3 |
|
|
$ |
2.6 |
|
|
$ |
4.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings per share - continuing operations |
|
|
|
|
$ |
0.16 |
|
|
|
|
|
|
$ |
0.03 |
|
||||||||
Diluted earnings per share - continuing operations |
|
|
|
|
$ |
0.16 |
|
|
|
|
|
|
$ |
0.03 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income from continuing operations |
$ |
30.3 |
|
|
$ |
9.0 |
|
|
$ |
21.3 |
|
|
$ |
7.3 |
|
|
$ |
2.6 |
|
|
$ |
4.7 |
|
Amortization of investment in affiliate step-up(b) |
|
1.6 |
|
|
|
0.5 |
|
|
|
1.1 |
|
|
|
1.6 |
|
|
|
0.5 |
|
|
|
1.1 |
|
Debt extinguishment costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15.2 |
|
|
|
4.4 |
|
|
|
10.8 |
|
Net loss on asset disposals(c) |
|
0.5 |
|
|
|
0.2 |
|
|
|
0.3 |
|
|
|
2.2 |
|
|
|
0.5 |
|
|
|
1.7 |
|
Foreign currency exchange loss(d) |
|
1.0 |
|
|
|
0.2 |
|
|
|
0.8 |
|
|
|
0.9 |
|
|
|
0.2 |
|
|
|
0.7 |
|
LIFO benefit(e) |
|
(0.4 |
) |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
(1.3 |
) |
|
|
(0.4 |
) |
|
|
(0.9 |
) |
Transaction and other related costs(f) |
|
1.8 |
|
|
|
0.5 |
|
|
|
1.3 |
|
|
|
0.5 |
|
|
|
0.2 |
|
|
|
0.3 |
|
Equity-based compensation |
|
4.7 |
|
|
|
0.1 |
|
|
|
4.6 |
|
|
|
10.2 |
|
|
|
2.9 |
|
|
|
7.3 |
|
Restructuring, integration and business optimization expenses(g) |
|
1.3 |
|
|
|
0.4 |
|
|
|
0.9 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
— |
|
Defined benefit plan pension expense (benefit)(h) |
|
0.3 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
(1.0 |
) |
|
|
(0.3 |
) |
|
|
(0.7 |
) |
Other(i) |
|
1.3 |
|
|
|
0.4 |
|
|
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted Net Income, including Intraperiod allocation |
|
42.4 |
|
|
|
11.3 |
|
|
|
31.1 |
|
|
|
35.7 |
|
|
|
10.7 |
|
|
|
25.0 |
|
Intraperiod allocation for restating discontinued operations(3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.5 |
) |
|
|
0.5 |
|
Adjusted Net Income(1) |
$ |
42.4 |
|
|
$ |
11.3 |
|
|
$ |
31.1 |
|
|
$ |
35.7 |
|
|
$ |
10.2 |
|
|
$ |
25.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted basic earnings per share |
|
|
|
|
$ |
0.23 |
|
|
|
|
|
|
$ |
0.19 |
|
||||||||
Adjusted diluted earnings per share |
|
|
|
|
$ |
0.23 |
|
|
|
|
|
|
$ |
0.19 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic |
|
|
|
|
|
132,622,105 |
|
|
|
|
|
|
|
136,129,591 |
|
||||||||
Diluted |
|
|
|
|
|
134,096,839 |
|
|
|
|
|
|
|
137,354,427 |
|
|
Nine months ended |
||||||||||||||||||||||
|
2022 |
|
2021 |
||||||||||||||||||||
|
Pre-tax |
|
Tax expense (benefit) |
|
After-tax |
|
Pre-tax |
|
Tax expense (benefit) |
|
After-tax |
||||||||||||
|
(in millions) |
||||||||||||||||||||||
Net income (loss) from continuing operations |
$ |
70.4 |
|
|
$ |
22.0 |
|
|
$ |
48.4 |
|
|
$ |
(0.9 |
) |
|
$ |
5.1 |
|
|
$ |
(6.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings (loss) per share - continuing operations |
|
|
|
|
$ |
0.36 |
|
|
|
|
|
|
$ |
(0.04 |
) |
||||||||
Diluted earnings (loss) per share - continuing operations |
|
|
|
|
$ |
0.35 |
|
|
|
|
|
|
$ |
(0.04 |
) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) from continuing operations |
$ |
70.4 |
|
|
$ |
22.0 |
|
|
$ |
48.4 |
|
|
$ |
(0.9 |
) |
|
$ |
5.1 |
|
|
$ |
(6.0 |
) |
Amortization of investment in affiliate step-up(b) |
|
4.8 |
|
|
|
1.3 |
|
|
|
3.5 |
|
|
|
4.9 |
|
|
|
1.4 |
|
|
|
3.5 |
|
Debt extinguishment costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26.9 |
|
|
|
7.5 |
|
|
|
19.4 |
|
Net loss on asset disposals(c) |
|
1.2 |
|
|
|
0.3 |
|
|
|
0.9 |
|
|
|
4.5 |
|
|
|
1.2 |
|
|
|
3.3 |
|
Foreign currency exchange loss(d) |
|
2.2 |
|
|
|
0.4 |
|
|
|
1.8 |
|
|
|
4.8 |
|
|
|
1.3 |
|
|
|
3.5 |
|
LIFO benefit(e) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2.0 |
) |
|
|
(0.6 |
) |
|
|
(1.4 |
) |
Transaction and other related costs(f) |
|
6.9 |
|
|
|
1.7 |
|
|
|
5.2 |
|
|
|
1.6 |
|
|
|
0.5 |
|
|
|
1.1 |
|
Equity-based compensation(2) |
|
17.4 |
|
|
|
0.6 |
|
|
|
16.8 |
|
|
|
22.8 |
|
|
|
6.4 |
|
|
|
16.4 |
|
Restructuring, integration and business optimization expenses(g) |
|
6.4 |
|
|
|
1.8 |
|
|
|
4.6 |
|
|
|
2.4 |
|
|
|
0.7 |
|
|
|
1.7 |
|
Defined benefit plan pension benefit(h) |
|
(0.8 |
) |
|
|
(0.2 |
) |
|
|
(0.6 |
) |
|
|
(2.2 |
) |
|
|
(0.6 |
) |
|
|
(1.6 |
) |
Other(i) |
|
1.4 |
|
|
|
0.4 |
|
|
|
1.0 |
|
|
|
1.9 |
|
|
|
0.6 |
|
|
|
1.3 |
|
Adjusted Net Income, including Intraperiod allocation |
|
109.9 |
|
|
|
28.3 |
|
|
|
81.6 |
|
|
|
64.7 |
|
|
|
23.5 |
|
|
|
41.2 |
|
Intraperiod allocation for restating discontinued operations(3) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(5.3 |
) |
|
|
5.3 |
|
Adjusted Net Income(1) |
$ |
109.9 |
|
|
$ |
28.3 |
|
|
$ |
81.6 |
|
|
$ |
64.7 |
|
|
$ |
18.2 |
|
|
$ |
46.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted basic earnings per share |
|
|
|
|
$ |
0.60 |
|
|
|
|
|
|
$ |
0.34 |
|
||||||||
Adjusted diluted earnings per share |
|
|
|
|
$ |
0.59 |
|
|
|
|
|
|
$ |
0.34 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic |
|
|
|
|
|
136,115,598 |
|
|
|
|
|
|
|
136,111,555 |
|
||||||||
Diluted |
|
|
|
|
|
137,666,215 |
|
|
|
|
|
|
|
136,111,555 |
|
See Appendix Table A-1 for Descriptions to Ecovyst Non-GAAP Reconciliations in the table above. |
||
(1) |
We define adjusted net income as net income attributable to |
|
(2) |
Includes tax adjustments for the shortfall in stock compensation. |
|
(3) |
Due to the sale of the Performance Chemicals business, the tax rates used to value deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) needs to be adjusted. Given it is a direct result of the sale of discontinued operations and the need to adjust the tax rate arose because of discontinued operations, the impact of revaluing the reporting entity’s DTAs and DTLs are reflected in continuing operations. |
Appendix Table A-3: Sales and Adjusted EBITDA by Business Segment |
|||||||||||||||||||||
|
Three months ended
|
|
|
|
Nine months ended
|
|
|
||||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
||
|
|
||||||||||||||||||||
Sales: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
$ |
195.7 |
|
|
$ |
137.5 |
|
|
42.3 % |
|
$ |
542.7 |
|
|
$ |
358.5 |
|
|
51.4 % |
||
Silica Catalysts |
|
36.8 |
|
|
|
29.9 |
|
|
23.1 % |
|
|
94.7 |
|
|
|
82.5 |
|
|
14.8 % |
||
Total sales |
$ |
232.5 |
|
|
$ |
167.4 |
|
|
38.9 % |
|
$ |
637.4 |
|
|
$ |
441.0 |
|
|
44.5 % |
||
Zeolyst Joint Venture sales |
$ |
27.8 |
|
|
$ |
32.8 |
|
|
(15.3) % |
|
|
$ |
92.7 |
|
|
$ |
95.0 |
|
|
(2.4) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
$ |
64.1 |
|
|
$ |
51.9 |
|
|
23.5 % |
|
$ |
173.4 |
|
|
$ |
125.4 |
|
|
38.3 % |
||
Catalyst Technologies |
|
19.3 |
|
|
|
25.5 |
|
|
(24.3) % |
|
|
|
57.7 |
|
|
|
64.6 |
|
|
(10.7) % |
|
Unallocated corporate expenses |
|
(8.0) |
|
|
(8.0) |
|
— % |
|
|
(23.5) |
|
|
(25.6) |
|
(8.2) % |
||||||
Total Adjusted EBITDA |
$ |
75.4 |
|
|
$ |
69.4 |
|
|
8.6 % |
|
$ |
207.6 |
|
|
$ |
164.4 |
|
|
26.3 % |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA Margin: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
32.8 % |
|
|
37.7 % |
|
|
|
|
32.0 % |
|
|
35.0 % |
|
|
||||||
Catalyst Technologies(1) |
|
29.9 % |
|
|
40.7 % |
|
|
|
|
30.8 % |
|
|
36.4 % |
|
|
||||||
Total Adjusted EBITDA Margin(1) |
|
29.0 % |
|
|
34.7 % |
|
|
|
|
28.4 % |
|
|
30.7 % |
|
|
(1) |
Adjusted EBITDA margin calculation includes proportionate |
Appendix Table A-4: Adjusted Free Cash Flow |
|||||||||||||||
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(in millions) |
||||||||||||||
Net cash provided by operating activities, continuing operations |
$ |
56.5 |
|
|
$ |
55.1 |
|
|
$ |
109.3 |
|
|
$ |
92.3 |
|
Net cash used in operating activities, discontinued operations |
|
— |
|
|
|
(19.5 |
) |
|
|
— |
|
|
|
(7.4 |
) |
Net cash provided by operating activities |
|
56.5 |
|
|
|
35.6 |
|
|
|
109.3 |
|
|
|
84.9 |
|
|
|
|
|
|
|
|
|
||||||||
Less: |
|
|
|
|
|
|
|
||||||||
Purchases of property, plant and equipment, continuing operations |
|
(13.7 |
) |
|
|
(16.6 |
) |
|
|
(39.5 |
) |
|
|
(44.6 |
) |
Purchases of property, plant and equipment, discontinued operations |
|
— |
|
|
|
(9.0 |
) |
|
|
— |
|
|
|
(31.0 |
) |
Purchases of property, plant and equipment(1) |
|
(13.7 |
) |
|
|
(25.6 |
) |
|
|
(39.5 |
) |
|
|
(75.6 |
) |
|
|
|
|
|
|
|
|
||||||||
Free cash flow |
|
42.8 |
|
|
|
10.0 |
|
|
|
69.8 |
|
|
|
9.3 |
|
|
|
|
|
|
|
|
|
||||||||
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 |
|
0.7 |
|
|
|
19.3 |
|
|
|
14.8 |
|
|
|
40.3 |
|
Adjusted free cash flow(2) |
$ |
43.5 |
|
|
$ |
35.0 |
|
|
$ |
84.6 |
|
|
$ |
57.9 |
|
|
|
|
|
|
|
|
|
||||||||
Net cash (used in) provided by investing activities(3) |
$ |
(14.1 |
) |
|
$ |
954.0 |
|
|
$ |
(43.6 |
) |
|
$ |
852.0 |
|
Net cash used in financing activities |
$ |
(70.7 |
) |
|
$ |
(958.5 |
) |
|
$ |
(82.6 |
) |
|
$ |
(964.6 |
) |
(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, net interest proceeds on swaps designated as net investment hedges, the cash paid for segment disposals and cash paid for debt financing costs included in cash from operating activities. 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 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. You should not consider adjusted free cash flow in isolation or as an alternative to the presentation of our financial results in accordance with GAAP. The presentation of adjusted free cash flow may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. |
|
(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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221101005216/en/
Investor:
(484) 617-1225
gene.shiels@ecovyst.com
Source:
FAQ
What were Ecovyst's Q3 2022 sales figures?
How did Ecovyst's net income perform in Q3 2022?
What is the adjusted EBITDA for Ecovyst in Q3 2022?
What changes were made to Ecovyst's financial outlook for 2022?