Ecovyst Reports Third Quarter 2024 Results
Ecovyst (NYSE: ECVT) reported Q3 2024 results with sales of $179.2 million, up from $173.3 million in Q3 2023. Net income was $14.3 million ($0.12 per share), down from $16.6 million year-over-year. Adjusted EBITDA decreased 12% to $59.8 million with a 28.5% margin. Operating cash flow improved to $106.4 million for the nine months ended September 30, 2024. The company maintained its full-year 2024 guidance with Adjusted EBITDA of $230-245 million and sales of $700-740 million. Ecoservices segment showed resilience with favorable pricing, while Advanced Materials & Catalysts segment saw timing shifts in orders.
Ecovyst (NYSE: ECVT) ha riportato i risultati del terzo trimestre 2024 con vendite di 179,2 milioni di dollari, rispetto ai 173,3 milioni di dollari nel terzo trimestre 2023. L'utile netto è stato di 14,3 milioni di dollari (0,12 dollari per azione), in calo rispetto ai 16,6 milioni dell'anno precedente. L'EBITDA rettificato è diminuito del 12% a 59,8 milioni di dollari con un margine del 28,5%. Il flusso di cassa operativo è migliorato a 106,4 milioni di dollari per i nove mesi conclusi il 30 settembre 2024. L'azienda ha mantenuto le previsioni per l'intero anno 2024 con un EBITDA rettificato tra 230 e 245 milioni di dollari e vendite comprese tra 700 e 740 milioni di dollari. Il segmento Ecoservices ha mostrato resilienza con una politica di prezzi favorevoli, mentre il segmento Advanced Materials & Catalysts ha subito spostamenti temporali negli ordini.
Ecovyst (NYSE: ECVT) informó los resultados del tercer trimestre de 2024 con ventas de 179,2 millones de dólares, un aumento respecto a los 173,3 millones de dólares en el tercer trimestre de 2023. La utilidad neta fue de 14,3 millones de dólares (0,12 dólares por acción), en comparación con los 16,6 millones del año anterior. El EBITDA ajustado disminuyó un 12% a 59,8 millones de dólares con un margen del 28,5%. El flujo de efectivo operativo mejoró a 106,4 millones de dólares durante los nueve meses finalizados el 30 de septiembre de 2024. La compañía mantuvo su guía para el año completo 2024 con un EBITDA ajustado de entre 230 y 245 millones de dólares y ventas de entre 700 y 740 millones de dólares. El segmento de Ecoservices mostró resiliencia con precios favorables, mientras que el segmento de Materiales Avanzados y Catalizadores vio cambios temporales en los pedidos.
에코비스티 (NYSE: ECVT)는 2024년 3분기 실적을 발표하며 매출이 1억 7,920만 달러에 이르렀으며, 이는 2023년 3분기의 1억 7,330만 달러에서 증가한 수치입니다. 순이익은 1,430만 달러(주당 0.12 달러)로, 지난해 1,660만 달러에서 감소했습니다. 조정 EBITDA는 12% 감소하여 5,980만 달러에 이르렀으며, 마진은 28.5%입니다. 운영 현금 흐름은 2024년 9월 30일로 종료된 9개월 동안 1억 6,640만 달러로 개선되었습니다. 이 회사는 조정 EBITDA를 2억 3천만 달러에서 2억 4천 5백만 달러로, 매출을 7억 달러에서 7억 4천만 달러로 유지하는 2024년 전체 연간 가이던스를 그대로 유지했습니다. 생태 서비스 부문은 유리한 가격으로 회복력을 보였고, 고급 재료 및 촉매 부문은 주문 타이밍 변동을 경험했습니다.
Ecovyst (NYSE: ECVT) a publié les résultats du troisième trimestre 2024, avec des ventes de 179,2 millions de dollars, en hausse par rapport à 173,3 millions de dollars au troisième trimestre 2023. Le revenu net était de 14,3 millions de dollars (0,12 dollar par action), en baisse par rapport à 16,6 millions de dollars l'année précédente. L'EBITDA ajusté a diminué de 12 % pour atteindre 59,8 millions de dollars, avec une marge de 28,5 %. Le flux de trésorerie d'exploitation s'est amélioré, atteignant 106,4 millions de dollars pour les neuf mois se terminant le 30 septembre 2024. L'entreprise a maintenu ses prévisions pour l'année 2024 avec un EBITDA ajusté de 230 à 245 millions de dollars et des ventes de 700 à 740 millions de dollars. Le segment Ecoservices a montré une résilience avec des prix favorables, tandis que le segment Matériaux Avancés et Catalyseurs a connu des décalages temporaires dans les commandes.
Ecovyst (NYSE: ECVT) veröffentlichte die Ergebnisse des dritten Quartals 2024 mit Umsätzen von 179,2 Millionen Dollar, ein Anstieg gegenüber 173,3 Millionen Dollar im dritten Quartal 2023. Der Nettogewinn betrug 14,3 Millionen Dollar (0,12 Dollar pro Aktie), ein Rückgang gegenüber 16,6 Millionen Dollar im Vorjahr. Das bereinigte EBITDA fiel um 12% auf 59,8 Millionen Dollar mit einer Marge von 28,5%. Der operative Cashflow verbesserte sich auf 106,4 Millionen Dollar für die neun Monate bis zum 30. September 2024. Das Unternehmen hielt an seiner Gesamtjahresprognose 2024 mit einem bereinigten EBITDA von 230 bis 245 Millionen Dollar und Umsätzen von 700 bis 740 Millionen Dollar fest. Das Segment Ökoservices zeigte Widerstandsfähigkeit mit günstigen Preisen, während das Segment Advanced Materials & Catalysts zeitliche Verschiebungen bei den Bestellungen erlebte.
- Sales increased to $179.2 million from $173.3 million YoY
- Operating cash flow improved to $106.4 million from $73.4 million YoY
- Strong liquidity position with $188.0 million available
- Ecoservices segment showed growth in virgin sulfuric acid sales and favorable pricing
- Net income declined to $14.3 million from $16.6 million YoY
- Adjusted EBITDA decreased 12% compared to Q3 2023
- Higher manufacturing costs due to inflation and maintenance
- Lower sales in Zeolyst Joint Venture segment
- High net debt leverage ratio of 3.2x
Insights
Ecovyst's Q3 2024 results show mixed performance with some concerning trends. Sales increased modestly to
Key concerns include declining Adjusted EBITDA (
The company maintained its full-year guidance but highlighted challenges in renewable fuels and emission control markets. With
The industrial sector dynamics present significant challenges for Ecovyst. The company faces headwinds from supply-demand imbalances in renewable fuels, subdued economic conditions affecting heavy-duty diesel vehicle demand and potential industrial demand contraction.
The diversification strategy through investments in Kansas City expansion and biocatalysis shows promise for long-term growth. However, near-term market conditions, particularly high interest rates and macroeconomic uncertainty, may continue to pressure performance.
Segment performance divergence between stable Ecoservices and struggling Advanced Materials & Catalysts highlights the importance of the ongoing operational excellence initiatives and reliability improvements.
Third Quarter 2024 Results & Highlights
- Sales of
$179.2 million $173.3 million - Net Income of
$14.3 million $16.6 million 8.0% and diluted net income per share of$0.12 $16.5 million $0.14 - Adjusted EBITDA of
$59.8 million 12% compared to the third quarter of 2023, with an Adjusted EBITDA margin of28.5% - Cash flows from operating activities was
$106.4 million $73.4 million $59.3 million $19.8 million
"Ecovyst's third-quarter results met our expectations, showcasing the resilience of our Ecoservices segment. This was driven by favorable pricing in regeneration services and increased sales volumes for virgin sulfuric acid. In our Advanced Materials & Catalysts segment, growth in polyethylene catalysts was offset by the shift of certain hydrocracking and custom catalyst orders into the fourth quarter of 2024," said Kurt J. Bitting, Ecovyst's Chief Executive Officer.
"Ecovyst is steadfast in pursuing our strategic goals of operational excellence, increasing industrial segment volumes, and diversifying products through emerging technologies. I am pleased with the strides we've made in enhancing reliability within Ecoservices, which has already led to gains in operational efficiency. Additionally, we have made notable progress in Advanced Materials & Catalysts through investments in the
Review of Segment Results and Business Trends
Ecoservices
Third quarter 2024 sales were
Advanced Materials & Catalysts
During the third quarter of 2024, Advanced Silicas sales were
Cash Flows and Balance Sheet
Cash flows from operating activities was
2024 Financial Outlook
Ecovyst expects demand trends for our Ecoservices segment to remain positive for the balance of 2024. The company expects high refinery utilization to provide continued support for our regeneration services business. Ecovyst remains cautious about the possibility of further contraction in industrial demand, but we anticipate sales of virgin sulfuric acid to be up in 2024, compared to 2023. For Advanced Silicas, Ecovyst expects sales of polyethylene catalysts and supports to be up in 2024, compared to 2023. However, the magnitude of the increase remains a function of overall industrial activity and related customer demand. Ecovyst remains cautious of the potential for timing shifts to impact sales of event-driven, niche custom catalysts in our Advanced Silicas business. The Company expects the current supply and demand imbalance in the renewable fuels industry will continue to challenge the near-term demand outlook for Ecovyst's sales of catalyst materials used in sustainable fuel production. Subdued economic conditions and high interest rates are also anticipated to continue to weigh on the near-term sales of emission control catalyst materials which are used on heavy duty diesel vehicles.
"I am pleased with the focus and performance of my Ecovyst colleagues in the face of the near-term challenges in some of our product groups. Based upon our current expectations for the remainder of the year, which include continued positive momentum in our Ecoservices business, and an expectation for higher polyethylene catalyst sales and anticipated timing associated with hydrocracking and niche custom catalyst sales, we are maintaining our guidance for full-year 2024 Adjusted EBITDA of
The Company's current guidance for full year 2024 is as follows:
- Sales of
$700 million $740 million - Sales of
$115 million $135 million 50% share of Zeolyst Joint Venture, which is excluded from GAAP Sales - Full year 2024 Adjusted EBITDA1 of
$230 million $245 million - Free Cash Flow1 of
$75 million $85 million - Capital expenditures of
$70 million $80 million - Interest expense of
$48 million $52 million - Depreciation & Amortization
- Ecovyst -
$88 million $92 million - Zeolyst J.V. -
$12 million $14 million
- Ecovyst -
- Effective tax rate in the mid
20% range - Full year 2024 Adjusted Net Income1 of
$53 million $74 million $0.45 $0.63
1In 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 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 April 2022, the Company's Board of Directors approved a stock repurchase program authorizing the repurchase of up to
During the third quarter of 2024, the Company did not repurchase any shares of its common stock pursuant to the stock repurchase program. During the third quarter of 2023, the Company repurchased 541,494 shares of its common stock on the open market at an average price of
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 and may be conducted through negotiated transactions, open market repurchases or other means, including through Rule 10b-18 trading plans or accelerated share repurchases. 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.
Conference Call and Webcast Details
On Thursday, October 31, 2024, Ecovyst management will review the third quarter results during a conference call and audio-only webcast scheduled for 11:00 a.m. Eastern Time.
Conference Call: Investors may listen to the conference call live via telephone by dialing 1 (800) 267-6316 (domestic) or 1 (203) 518-9783 (international) and use the participant code ECVTQ324.
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.
Investor Contact:
Gene Shiels
(484) 617-1225
gene.shiels@ecovyst.com
About Ecovyst Inc.
Ecovyst Inc. and subsidiaries is a leading integrated and innovative global provider of advanced materials, specialty catalysts and services. We support customers globally through our strategically located network of manufacturing facilities. We believe that our products and services contribute to improving the sustainability of the environment.
We have two uniquely positioned specialty businesses: Ecoservices provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides high quality and high strength virgin sulfuric acid for industrial and mining applications. Ecoservices also provides chemical waste handling and treatment services, as well as ex-situ catalyst activation services for the refining and petrochemical industry. Advanced Materials & Catalysts, through its Advanced Silicas business, provides finished silica catalysts, catalyst supports and functionalized silicas necessary to produce high performing plastics and to enable sustainable chemistry, and through its Zeolyst Joint Venture, innovates and supplies specialty zeolites used in catalysts that support the production of sustainable fuels, remove nitrogen oxides from diesel engine emissions and that are broadly applied in refining and petrochemical process. For more information, see our website at https://www.ecovyst.com.
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, capital expenditure projects, liquidity, prospects, growth, strategies, capital allocation program (including the stock repurchase program), product and service offerings, expected demand trends and our 2024 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 SEC, which are available on the SEC's website at www.sec.gov. These forward-looking statements speak only as of the date of this release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.
ECOVYST INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
(in millions, except share and per share amounts) | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||
Sales | $ 179.2 | $ 173.3 | 3.4 % | $ 522.5 | $ 518.3 | 0.8 % | ||||||
Cost of goods sold | 124.5 | 120.1 | 3.7 % | 374.9 | 367.7 | 2.0 % | ||||||
Gross profit | 54.7 | 53.2 | 2.8 % | 147.6 | 150.6 | (2.0) % | ||||||
Selling, general and administrative expenses | 20.0 | 16.9 | 18.3 % | 64.3 | 59.5 | 8.1 % | ||||||
Other operating expense, net | 3.1 | 4.3 | (27.9) % | 9.9 | 17.2 | (42.4) % | ||||||
Operating income | 31.6 | 32.0 | (1.3) % | 73.4 | 73.9 | (0.7) % | ||||||
Equity in net (income) from affiliated companies | 0.9 | (4.7) | (119.1) % | (2.5) | (16.3) | (84.7) % | ||||||
Interest expense, net | 11.3 | 11.8 | (4.2) % | 37.6 | 30.8 | 22.1 % | ||||||
Debt extinguishment costs | — | — | — % | 4.6 | — | NM | ||||||
Other expense, net | 0.6 | 0.4 | 50.0 % | 1.1 | 0.6 | 83.3 % | ||||||
Income before income taxes | 18.8 | 24.5 | (23.3) % | 32.6 | 58.8 | (44.6) % | ||||||
Provision for income taxes | 4.5 | 7.9 | (43.0) % | 8.8 | 17.6 | (50.0) % | ||||||
Effective tax rate | 24.0 % | 32.3 % | 26.9 % | 29.9 % | ||||||||
Net income | $ 14.3 | $ 16.6 | (13.9) % | $ 23.8 | $ 41.2 | (42.2) % | ||||||
Earnings per share: | ||||||||||||
Basic earnings per share | $ 0.12 | $ 0.14 | $ 0.20 | $ 0.35 | ||||||||
Diluted earnings per share | $ 0.12 | $ 0.14 | $ 0.20 | $ 0.34 | ||||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 116,490,634 | 116,446,085 | 116,786,759 | 119,042,161 | ||||||||
Diluted | 117,187,054 | 117,374,347 | 117,425,254 | 120,417,132 | ||||||||
ECOVYST INC. AND SUBSIDIARIES | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(in millions, except share and per share amounts) | |||
September 30, | December 31, | ||
ASSETS | |||
Cash and cash equivalents | $ 123.5 | $ 88.4 | |
Accounts receivable, net | 74.0 | 81.3 | |
Inventories, net | 53.7 | 45.1 | |
Derivative assets | 6.2 | 13.4 | |
Prepaid and other current assets | 26.1 | 17.8 | |
Total current assets | 283.5 | 246.0 | |
Investments in affiliated companies | 410.4 | 440.2 | |
Property, plant and equipment, net | 571.7 | 576.9 | |
Goodwill | 405.8 | 404.5 | |
Other intangible assets, net | 106.6 | 116.6 | |
Right-of-use lease assets | 25.7 | 24.3 | |
Other long-term assets | 36.3 | 29.4 | |
Total assets | $ 1,840.0 | $ 1,837.8 | |
LIABILITIES | |||
Current maturities of long-term debt | $ 8.7 | $ 9.0 | |
Accounts payable | 33.4 | 40.2 | |
Operating lease liabilities—current | 8.0 | 8.2 | |
Accrued liabilities | 61.7 | 61.7 | |
Total current liabilities | 111.8 | 119.1 | |
Long-term debt, excluding current portion | 853.9 | 858.9 | |
Deferred income taxes | 108.5 | 115.8 | |
Operating lease liabilities—noncurrent | 17.6 | 16.0 | |
Other long-term liabilities | 18.9 | 22.5 | |
Total liabilities | 1,110.7 | 1,132.3 | |
Commitments and contingencies | |||
EQUITY | |||
Common stock ( | 1.4 | 1.4 | |
Preferred stock ( | — | — | |
Additional paid-in capital | 1,103.4 | 1,102.6 | |
Accumulated deficit | (147.1) | (170.9) | |
Treasury stock, at cost; shares 24,363,043 and 24,627,150 on September 30, 2024 and December 31, 2023, respectively | (223.1) | (226.7) | |
Accumulated other comprehensive loss | (5.3) | (0.9) | |
Total equity | 729.3 | 705.5 | |
Total liabilities and equity | $ 1,840.0 | $ 1,837.8 | |
ECOVYST INC. AND SUBSIDIARIES | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Nine months ended September 30, | |||
2024 | 2023 | ||
Cash flows from operating activities: | (in millions) | ||
Net income | $ 23.8 | $ 41.2 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 56.2 | 51.9 | |
Amortization | 10.6 | 10.5 | |
Amortization of deferred financing costs and original issue discount | 1.3 | 1.5 | |
Deferred income tax benefit | (4.5) | (1.0) | |
Net loss on asset disposals | 0.8 | 3.3 | |
Stock compensation | 10.5 | 12.5 | |
Equity in net income from affiliated companies | (2.5) | (16.3) | |
Dividends received from affiliated companies | 33.0 | 10.0 | |
Other, net | (7.3) | (5.2) | |
Working capital changes that provided (used) cash: | |||
Receivables | 7.6 | (8.9) | |
Inventories | (7.4) | (3.9) | |
Prepaids and other current assets | (8.3) | 0.9 | |
Accounts payable | (5.8) | (3.7) | |
Accrued liabilities | (1.6) | (19.4) | |
Net cash provided by operating activities | 106.4 | 73.4 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (51.7) | (53.6) | |
Investment in non-marketable equity securities | (4.5) | — | |
Net cash used in investing activities | (56.2) | (53.6) | |
Cash flows from financing activities: | |||
Draw down of revolving credit facilities | — | 14.5 | |
Repayments of revolving credit facilities | — | (14.5) | |
Issuance of long-term debt, net of original issue discount and financing fees | 870.8 | — | |
Repayments of long-term debt | (877.5) | (6.8) | |
Repurchases of common shares | (5.0) | (78.7) | |
Tax withholdings on equity award vesting | (1.2) | (3.4) | |
Repayment of financing obligation | (2.4) | (2.1) | |
Other, net | 0.2 | 0.5 | |
Net cash used in financing activities | (15.1) | (90.5) | |
Effect of exchange rate changes on cash and cash equivalents | — | (1.9) | |
Net change in cash and cash equivalents | 35.1 | (72.6) | |
Cash and cash equivalents at beginning of period | 88.4 | 110.9 | |
Cash and cash equivalents at end of period | $ 123.5 | $ 38.3 | |
Appendix Table A-1: Reconciliation of Net Income to Adjusted EBITDA | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
(in millions) | ||||||||
Reconciliation of net income to Adjusted EBITDA | ||||||||
Net income | $ 14.3 | $ 16.6 | $ 23.8 | $ 41.2 | ||||
Provision for income taxes | 4.5 | 7.9 | 8.8 | 17.6 | ||||
Interest expense, net | 11.3 | 11.8 | 37.6 | 30.8 | ||||
Depreciation and amortization | 23.2 | 21.3 | 66.8 | 62.5 | ||||
EBITDA | 53.3 | 57.6 | 137.0 | 152.1 | ||||
Joint venture depreciation, amortization and interest(a) | 3.6 | 3.3 | 10.1 | 10.1 | ||||
Amortization of investment in affiliate step-up(b) | 0.6 | 1.6 | 3.2 | 4.8 | ||||
Debt extinguishment costs | — | — | 4.6 | — | ||||
Net loss on asset disposals(c) | 0.2 | 1.0 | 0.8 | 3.3 | ||||
Foreign currency exchange loss (gain)(d) | — | 0.8 | 0.1 | (0.4) | ||||
LIFO (benefit) expense(e) | (0.6) | — | (3.2) | 2.5 | ||||
Transaction and other related costs(f) | — | 0.2 | 0.2 | 2.8 | ||||
Equity-based compensation | 3.0 | 3.5 | 10.5 | 12.6 | ||||
Restructuring, integration and business optimization expenses(g) | 0.5 | 0.3 | 0.9 | 2.4 | ||||
Other(h) | (0.8) | (0.4) | (1.9) | (0.1) | ||||
Adjusted EBITDA | $ 59.8 | $ 67.9 | $ 162.3 | $ 190.1 | ||||
Descriptions to Ecovyst Non-GAAP Reconciliations | |
(a) | We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Advanced Materials & Catalysts 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 PQ Holdings Inc. and Eco Services Operations LLC in May 2016. We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of the Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with intangible assets, including customer relationships and technical know-how. |
(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 remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt, denominated in foreign currency. |
(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 consists of adjustments for items that are not core to our ongoing business operations. These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen. Also included in this amount are adjustments to eliminate the benefit realized in cost of goods sold of the allocation of a portion of the contract manufacturing payments under the five-year agreement with the buyer of the Performance Chemicals business to the financing obligation under the failed sale-leaseback. 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 and EPS to Adjusted Net Income and Adjusted EPS(1) | |||||||||||
Three months ended September 30, | |||||||||||
2024 | 2023 | ||||||||||
Pre-tax | Tax | After-tax | Per share, | Per share, | Pre-tax | Tax | After-tax | Per share, | Per share, | ||
(in millions, except share and per share amounts) | |||||||||||
Net income | $ 18.8 | $ 4.5 | $ 14.3 | $ 0.12 | $ 0.12 | $ 24.5 | $ 7.9 | $ 16.6 | $ 0.14 | $ 0.14 | |
Amortization of investment in affiliate step-up(b) | 0.6 | 0.1 | 0.5 | — | — | 1.6 | 0.5 | 1.1 | 0.01 | 0.01 | |
Net loss on asset disposals(c) | 0.2 | 0.1 | 0.1 | — | — | 1.0 | 0.3 | 0.7 | 0.01 | 0.01 | |
Foreign currency exchange loss(d) | — | — | — | — | — | 0.8 | 0.2 | 0.6 | 0.01 | 0.01 | |
LIFO benefit(e) | (0.6) | (0.2) | (0.4) | — | — | — | — | — | — | — | |
Transaction and other related costs(f) | — | — | — | — | — | 0.2 | 0.1 | 0.1 | — | — | |
Equity-based compensation | 3.0 | 0.7 | 2.3 | 0.02 | 0.02 | 3.5 | 0.3 | 3.2 | 0.03 | 0.03 | |
Restructuring, integration and business optimization expenses(g) | 0.5 | 0.1 | 0.4 | — | — | 0.3 | 0.1 | 0.2 | — | — | |
Other(h) | (0.8) | (0.1) | (0.7) | — | — | (0.4) | (0.1) | (0.3) | (0.01) | (0.01) | |
Adjusted Net Income(1) | $ 21.7 | $ 5.2 | $ 16.5 | $ 0.14 | $ 0.14 | $ 31.5 | $ 9.3 | $ 22.2 | $ 0.19 | $ 0.19 | |
Weighted average shares outstanding | 116,490,634 | 117,187,054 | 116,446,085 | 117,374,347 | |||||||
Nine months ended September 30, | |||||||||||
2024 | 2023 | ||||||||||
Pre-tax | Tax | After-tax | Per share, | Per share, | Pre-tax | Tax | After-tax | Per share, | Per share, | ||
(in millions, except share and per share amounts) | |||||||||||
Net income | $ 32.6 | $ 8.8 | $ 23.8 | $ 0.20 | $ 0.20 | $ 58.8 | $ 17.6 | $ 41.2 | $ 0.35 | $ 0.34 | |
Amortization of investment in affiliate step-up(b) | 3.2 | 0.8 | 2.4 | 0.02 | 0.02 | 4.8 | 1.3 | 3.5 | 0.03 | 0.03 | |
Debt extinguishment costs | 4.6 | 1.2 | 3.4 | 0.03 | 0.03 | — | — | — | — | — | |
Net loss on asset disposals(c) | 0.8 | 0.2 | 0.6 | 0.01 | 0.01 | 3.3 | 0.9 | 2.4 | 0.02 | 0.02 | |
Foreign currency exchange loss (gain)(d) | 0.1 | — | 0.1 | — | — | (0.4) | (0.1) | (0.3) | — | — | |
LIFO (benefit) expense(e) | (3.2) | (0.8) | (2.4) | (0.02) | (0.02) | 2.5 | 0.7 | 1.8 | 0.02 | 0.01 | |
Transaction and other related costs(f) | 0.2 | 0.1 | 0.1 | — | — | 2.8 | 0.8 | 2.0 | 0.02 | 0.02 | |
Equity-based compensation | 10.5 | 2.1 | 8.4 | 0.07 | 0.07 | 12.6 | 1.1 | 11.5 | 0.10 | 0.10 | |
Restructuring, integration and business optimization expenses(g) | 0.9 | 0.2 | 0.7 | 0.01 | 0.01 | 2.4 | 0.7 | 1.7 | 0.01 | 0.01 | |
Other(h) | (1.9) | (0.6) | (1.3) | (0.01) | (0.02) | (0.1) | — | (0.1) | (0.01) | — | |
Adjusted Net Income(1) | $ 47.8 | $ 12.0 | $ 35.8 | $ 0.31 | $ 0.30 | $ 86.7 | $ 23.0 | $ 63.7 | $ 0.54 | $ 0.53 | |
Weighted average shares outstanding | 116,786,759 | 117,425,254 | 119,042,161 | 120,417,132 | |||||||
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 adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted Net Income is presented as a key performance indicator as we believe it will enhance a prospective investor's understanding of our results of operations and financial condition. Adjusted Net Income may not be comparable with net income or Adjusted Net Income as defined by other companies. |
The adjustments to net income are shown net of applicable tax rates of
Appendix Table A-3: Sales and Adjusted EBITDA by Business Segment | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||
Sales: | ||||||||||||
Ecoservices | $ 153.9 | $ 147.6 | 4.3 % | $ 449.4 | $ 443.4 | 1.4 % | ||||||
Advanced Silicas | 25.3 | 25.7 | (1.6) % | 73.1 | 74.9 | (2.4) % | ||||||
Total sales | $ 179.2 | $ 173.3 | 3.4 % | $ 522.5 | $ 518.3 | 0.8 % | ||||||
Zeolyst Joint Venture sales | $ 30.9 | $ 37.0 | (16.5) % | $ 83.4 | $ 103.7 | (19.6) % | ||||||
Adjusted EBITDA: | ||||||||||||
Ecoservices | $ 55.1 | $ 54.7 | 0.7 % | $ 146.3 | $ 151.6 | (3.5) % | ||||||
Advanced Materials & Catalysts | 10.9 | 16.4 | (33.5) % | 36.8 | 54.7 | (32.7) % | ||||||
Unallocated corporate expenses | (6.2) | (3.2) | (93.8) % | (20.8) | (16.2) | (28.4) % | ||||||
Total Adjusted EBITDA | $ 59.8 | $ 67.9 | (11.9) % | $ 162.3 | $ 190.1 | (14.6) % | ||||||
Adjusted EBITDA Margin: | ||||||||||||
Ecoservices | 35.8 % | 37.1 % | 32.6 % | 34.2 % | ||||||||
Advanced Materials & Catalysts(1) | 19.4 % | 26.2 % | 23.5 % | 30.6 % | ||||||||
Total Adjusted EBITDA Margin(1) | 28.5 % | 32.3 % | 26.8 % | 30.6 % | ||||||||
(1) | Adjusted EBITDA Margin calculation includes proportionate |
Appendix Table A-4: Adjusted Free Cash Flow | ||||
Nine months ended September 30, | ||||
2024 | 2023 | |||
(in millions) | ||||
Net cash provided by operating activities | $ 106.4 | $ 73.4 | ||
Less: | ||||
Purchases of property, plant and equipment(1) | (51.7) | (53.6) | ||
Free Cash Flow(2) | $ 54.7 | $ 19.8 | ||
Adjustments to free cash flow: | ||||
Cash paid for debt financing costs included in cash from operating activities | 4.6 | — | ||
Adjusted Free Cash Flow(2) | $ 59.3 | $ 19.8 | ||
Net cash used in investing activities(3) | $ (56.2) | $ (53.6) | ||
Net cash used in financing activities | $ (15.1) | $ (90.5) | ||
(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 cash flows that are unusual in nature and/or infrequent in occurrence that neither relate to our core business nor reflect the liquidity of our underlying business. Historically these adjustments include proceeds from the 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, which is also included in our computation of Adjusted Free Cash Flow. |
Appendix Table A-5: Net Debt Leverage Ratio | |||
September 30, 2024 | September 30, 2023 | ||
(in millions, except ratios) | |||
Total debt | $ 873.0 | $ 879.8 | |
Less: | |||
Cash and cash equivalents | 123.5 | 38.3 | |
Net debt | $ 749.5 | $ 841.5 | |
Trailing twelve months: | |||
Net income | $ 53.8 | $ 62.7 | |
Adjusted EBITDA(1) | $ 232.0 | $ 259.3 | |
Net Debt to Net Income ratio | 13.9x | 13.4x | |
Net Debt Leverage ratio | 3.2x | 3.2x | |
___________
(1) | Refer to Appendix Table A-1: Reconciliation of Net Income to Adjusted EBITDA for the reconciliation to the most comparable GAAP financial measure. |
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SOURCE Ecovyst Inc.
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