Ascent Industries Co. (Nasdaq: ACNT) (“Ascent” or the
“Company”), an industrials company focused on the production of
specialty chemicals and industrial tubular products, is reporting
its results for the first quarter ended March 31, 2024.
First Quarter
2024 Summary1
(in millions, except per share and
margin)
Q1 2024
Q1 2023
Change
Net Sales
$44.1
$54.9
(19.6)%
Gross Profit
$2.5
$1.5
72.4%
Gross Profit Margin
5.7%
2.7%
300bps
Net (Loss)
$(4.7)
$(5.8)
18.6%
Diluted (Loss) per Share
$(0.47)
$(0.57)
17.5%
Adjusted EBITDA
$(3.1)
$(3.7)
16.6%
Adjusted EBITDA Margin
(7.1)%
(6.8)%
(30)bps
____________________________
1 On June 2, 2023, the Board of Directors
of Ascent made the decision to permanently cease operations at the
Company’s welded pipe and tube facility located in Munhall, PA
(“Munhall”) effective on August 31, 2023. On December 22, 2023, the
Company closed on a transaction to sell substantially all of the
assets of Specialty Pipe & Tube (“SPT”). As a result, financial
results from Munhall & SPT have been categorized into
discontinued operations.
Management Commentary
“The first quarter of 2024 marked a period of structural cost
reduction and stabilization efforts across the enterprise,” said
Ascent CEO Bryan Kitchen. “Without question, our initial efforts to
optimize both cash and costs have helped drive year-over-year
improvements across our consolidated gross margin and bottom line,
while operating within the confines of our own free cash flow.
Aggressive self-help has been at the core of our ability to
overcome ongoing market headwinds that have resulted in a
year-over-year decline in total net sales.
“As promised, in just a short period of time we have made
progress in laying the groundwork for driving profitable growth
through the optimization of our product mix while recapitalizing
our SG&A across both segments. These actions, coupled with a
continued focus on driving efficiencies across all sites and
functions, will create a more predictable, reliable, and profitable
operating model moving forward. Momentum is building, and we expect
continued improvements in our financial results throughout 2024. We
believe we are on the right track to create durable value for
shareholders.”
First Quarter 2024 Financial
Results
Net sales from continuing operations were $44.1 million compared
to $54.9 million in the first quarter of 2023, primarily
attributable to decreased end-market demand and de-stocking trends
across both segments.
Gross profit from continuing operations improved to $2.5
million, or 5.7% of net sales, compared to $1.5 million, or 2.7% of
net sales, in the first quarter of 2023. The increase was primarily
attributable to improved strategic sourcing initiatives and cost
improvements.
Net loss from continuing operations decreased to $4.7 million,
or $(0.47) diluted loss per share, compared to net loss from
continuing operations of $5.8 million, or $(0.57) diluted earnings
per share, in the first quarter of 2023. The decrease was primarily
attributable to the aforementioned increases in gross profit and a
year-over-year decrease in interest expense due to lower debt
outstanding.
Adjusted EBITDA improved to $(3.1) million compared to $(3.7)
million in the first quarter of 2023, primarily driven by the
aforementioned cost optimization efforts. Adjusted EBITDA margin
was (7.1)% compared to (6.8)% in the prior year period, with the
decline primarily a result of the aforementioned lower net sales
base.
Segment Results
Ascent Chemicals – net sales in the first quarter of 2024
were $20.3 million compared to $23.7 million in the first quarter
of 2023. Operating loss in the first quarter was $1.4 million
compared to operating income of $1.4 million in the prior year
period. Adjusted EBITDA in the first quarter was $(0.3) million
compared to $2.5 million in the prior year period. As a percentage
of segment net sales, adjusted EBITDA was (1.4)% compared to 10.5%
in the first quarter of 2023.
Ascent Tubular – net sales from continuing operations in
the first quarter of 2024 were $23.8 million compared to $31.1
million in the first quarter of 2023. Operating loss from
continuing operations in the first quarter decreased to $1.5
million compared to operating loss from continuing operations of
$3.3 million in the prior year period. Adjusted EBITDA from
continuing operations in the first quarter was $(0.7) million
compared to $(2.4) million in the prior year period. As a
percentage of segment net sales, adjusted EBITDA was (3.0)%
compared to (7.7)% in the first quarter of 2023.
Liquidity
As of March 31, 2024, the Company had no debt outstanding under
its revolving credit facilities and had $63.6 million in
availability under its revolving credit facility.
For the quarter ended March 31, 2024, the Company repurchased
16,330 shares at an average cost of $9.97 per share for
approximately $0.2 million.
Conference Call
Ascent will conduct a conference call today at 5:00 p.m. Eastern
time to discuss its results for the first quarter ended March 31,
2024.
Ascent management will host the conference call, followed by a
question-and-answer period.
Date: Wednesday, May 8, 2024 Time: 5:00 p.m. Eastern time Live
Call Registration Link: Here Webcast Registration Link: Here
To access the call by phone, please register via the live call
registration link above or here and you will be provided with
dial-in instructions and details. If you have any difficulty
connecting with the conference call, please contact Gateway Group
at 1-949-574-3860.
The conference call will also be broadcast live and available
for replay via the webcast registration link above or here. The
webcast will be archived for one year in the investor relations
section of the Company’s website at www.ascentco.com.
About Ascent Industries
Co.
Ascent Industries Co. (Nasdaq: ACNT) is a company that engages
in a number of diverse business activities including the production
of specialty chemicals and industrial tubular products. For more
information about Ascent, please visit its website at
www.ascentco.com.
Forward-Looking
Statements
This press release may include "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 and other applicable federal securities laws. All
statements that are not historical facts are forward-looking
statements. Forward-looking statements can be identified through
the use of words such as "estimate," "project," "intend," "expect,"
"believe," "should," "anticipate," "hope," "optimistic," "plan,"
"outlook," "should," "could," "may" and similar expressions. The
forward-looking statements are subject to certain risks and
uncertainties which could cause actual results to differ materially
from historical results or those anticipated. Readers are cautioned
not to place undue reliance on these forward-looking statements and
to review the risks as set forth in more detail in Ascent
Industries Co.’s Securities and Exchange Commission filings,
including our Annual Report on Form 10-K, which filings are
available from the SEC or on our website. Ascent Industries Co.
assumes no obligation to update any forward-looking information
included in this release.
Non-GAAP Financial
Information
Financial statement information included in this earnings
release includes non-GAAP (Generally Accepted Accounting
Principles) measures and should be read along with the accompanying
tables which provide a reconciliation of non-GAAP measures to GAAP
measures.
Adjusted EBITDA is a non-GAAP financial
measure that the Company believes is useful to investors in
evaluating its results to determine the value of a company. An item
is excluded in the measure if its periodic value is inconsistent
and sufficiently material that not identifying the item would
render period comparability less meaningful to the reader or if
including the item provides a clearer representation of normalized
periodic earnings. The Company excludes in Adjusted EBITDA two
categories of items: 1) Base EBITDA components, including: interest
expense, income taxes, depreciation and amortization, and 2)
Material transaction costs including: goodwill impairment, asset
impairment, gain on lease modification, stock-based compensation,
non-cash lease cost, acquisition costs and other fees, shelf
registration costs, loss on extinguishment of debt, retention costs
and restructuring & severance costs from net income.
Management believes that these non-GAAP measures are useful
because they are key measures used by our management team to
evaluate our operating performance, generate future operating plans
and make strategic decisions as well as allow readers to compare
the financial results between periods. Non-GAAP measures should not
be considered as an alternative to any measure of performance or
financial condition as promulgated under GAAP, and investors should
consider the Company's performance and financial condition as
reported under GAAP and all other relevant information when
assessing the performance or financial condition of the Company.
Non-GAAP measures have limitations as analytical tools, and
investors should not consider them in isolation or as a substitute
for analysis of the Company's results or financial condition as
reported under GAAP.
Ascent Industries Co.
Condensed Consolidated Balance
Sheets
(in thousands, except par value and share
data)
(Unaudited)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
1,299
$
1,851
Accounts receivable, net of allowance for
credit losses of $792 and $463, respectively
28,160
26,604
Inventories
51,197
52,306
Prepaid expenses and other current
assets
4,146
4,879
Assets held for sale
1,792
2,912
Current assets of discontinued
operations
46
861
Total current assets
86,640
89,413
Property, plant and equipment, net
28,648
29,755
Right-of-use assets, operating leases,
net
27,431
27,784
Intangible assets, net
8,129
8,496
Deferred income taxes
7,366
5,808
Deferred charges, net
79
104
Other non-current assets, net
2,678
1,935
Total assets
$
160,971
$
163,295
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable
$
20,549
$
16,416
Accrued expenses and other current
liabilities
4,824
5,108
Current portion of note payable
88
360
Current portion of operating lease
liabilities
1,170
1,140
Current portion of finance lease
liabilities
288
292
Current liabilities of discontinued
operations
1,376
1,473
Total current liabilities
28,295
24,789
Long-term portion of operating lease
liabilities
29,419
29,729
Long-term portion of finance lease
liabilities
1,236
1,307
Other long-term liabilities
57
60
Total non-current liabilities
30,712
31,096
Total liabilities
$
59,007
$
55,885
Commitments and contingencies
Shareholders' equity:
Common stock, par value $1 per share;
24,000,000 shares authorized; 11,085,103 and 10,124,781 shares
issued and outstanding, respectively
$
11,085
$
11,085
Capital in excess of par value
47,097
47,333
Retained earnings
53,024
58,517
111,206
116,935
Less: cost of common stock in treasury -
960,323 and 990,282 shares, respectively
(9,242
)
(9,525
)
Total shareholders' equity
101,964
107,410
Total liabilities and shareholders'
equity
$
160,971
$
163,295
Note: The condensed consolidated balance
sheets at December 31, 2023 have been derived from the audited
consolidated financial statements at that date.
Ascent Industries Co.
Condensed Consolidated Statements of
Income (Loss) - Comparative Analysis (Unaudited)
($ in thousands, except per share
data)
Three Months Ended
March 31,
2024
2023
Net sales
Tubular Products
$
23,814
$
31,061
Specialty Chemicals
20,296
23,749
All Other
—
50
44,110
54,860
Operating (loss) income from continuing
operations
Tubular Products
(1,502
)
(3,293
)
Specialty Chemicals
(1,439
)
1,352
All Other
(162
)
(479
)
Corporate
Unallocated corporate expenses
(2,150
)
(3,704
)
Acquisition costs and other
—
(259
)
Total Corporate
(2,150
)
(3,963
)
Operating loss
(5,253
)
(6,383
)
Interest expense
127
1,107
Other, net
(120
)
(95
)
Loss from continuing operations before
income taxes
(5,260
)
(7,395
)
Income tax benefit
(1,166
)
(1,607
)
Loss from continuing operations
(4,094
)
(5,788
)
(Loss) income from discontinued
operations, net of tax
(1,399
)
589
Net loss
$
(5,493
)
$
(5,199
)
Net loss per common share from
continuing operations
Basic
$
(0.41
)
$
(0.57
)
Diluted
$
(0.41
)
$
(0.57
)
Net (loss) income per common share from
discontinued operations
Basic
$
(0.14
)
$
0.06
Diluted
$
(0.14
)
$
0.06
Net loss per common share
Basic
$
(0.54
)
$
(0.51
)
Diluted
$
(0.54
)
$
(0.51
)
Average shares outstanding
Basic
10,094
10,148
Diluted
10,094
10,148
Other data:
Adjusted EBITDA1
$
(3,115
)
$
(3,735
1 The term Adjusted EBITDA is a non-GAAP
financial measure that the Company believes is useful to investors
in evaluating its results to determine the value of a company. An
item is excluded in the measure if its periodic value is
inconsistent and sufficiently material that not identifying the
item would render period comparability less meaningful to the
reader or if including the item provides a clearer representation
of normalized periodic earnings. The Company excludes in Adjusted
EBITDA two categories of items: 1) Base EBITDA components,
including: interest expense, income taxes, depreciation and
amortization, and 2) Material transaction costs including: goodwill
impairment, asset impairment, gain on lease modification,
stock-based compensation, non-cash lease cost, acquisition costs
and other fees, retention costs and restructuring & severance
costs from net income. For a reconciliation of this non-GAAP
measure to the most comparable GAAP equivalent, refer to the
Reconciliation of Net Income (Loss) to Adjusted EBITDA.
Ascent Industries Co.
Consolidated Statements of Cash Flows
(Unaudited)
($ in thousands)
Three Months Ended March
31,
2024
2023
Operating activities
Net loss
$
(5,493
)
$
(5,199
)
(Loss) income from discontinued
operations, net of tax
(1,399
)
589
Net loss from continuing operations
(4,094
)
(5,788
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation expense
1,522
1,549
Amortization expense
367
376
Amortization of debt issuance costs
25
25
Deferred income taxes
(1,166
)
353
Provision for (reduction of) losses on
accounts receivable
330
(57
)
(Reduction of) provision for losses on
inventories
(73
)
791
Loss on disposal of property, plant and
equipment
—
182
Non-cash lease expense
55
64
Stock-based compensation expense
209
319
Changes in operating assets and
liabilities:
Accounts receivable
(1,885
)
(1,072
)
Inventories
1,182
9,492
Other assets and liabilities
(73
)
297
Accounts payable
4,022
6,827
Accrued expenses
(283
)
1,629
Accrued income taxes
78
(2,577
)
Net cash provided by operating activities
- continuing operations
216
12,410
Net cash provided by operating activities
- discontinued operations
47
980
Net cash provided by operating
activities
263
13,390
Investing activities
Purchases of property, plant and
equipment
(305
)
(586
)
Net cash used in investing activities -
continuing operations
(305
)
(586
)
Net cash used in investing activities -
discontinued operations
—
(238
)
Net cash used in investing
activities
(305
)
(824
)
Financing activities
Borrowings from long-term debt
50,950
67,488
Payments on long-term debt
(50,950
)
(80,384
)
Payments on note payable
(271
)
(289
)
Principal payments on finance lease
obligations
(76
)
(74
)
Repurchase of common stock
(163
)
(327
)
Net cash used in financing
activities
(510
)
(13,586
)
Decrease in cash and cash equivalents
(552
)
(1,020
)
Less: Cash and cash equivalents of
discontinued operations
—
1
Cash and cash equivalents, beginning of
period
1,851
1,440
Cash and cash equivalents, end of
period
$
1,299
$
421
Ascent Industries Co.
Non-GAAP Financial Measures
Reconciliation
Reconciliation of Net Income (Loss) to
Adjusted EBITDA (Unaudited)
($ in thousands)
Three Months Ended
March 31,
($ in thousands)
2024
2023
Consolidated
Net loss from continuing operations
$
(4,094
)
$
(5,788
)
Adjustments:
Interest expense
127
1,106
Income taxes
(1,166
)
(1,607
)
Depreciation
1,522
1,549
Amortization
367
376
EBITDA
(3,244
)
(4,364
)
Acquisition costs and other
12
261
Stock-based compensation
59
220
Non-cash lease expense
55
64
Retention expense
3
—
Restructuring and severance costs
—
84
Adjusted EBITDA
$
(3,115
)
$
(3,735
)
% sales
(7.1
)%
(6.8
)%
Specialty Chemicals
Net (loss) income
$
(1,458
)
$
1,342
Adjustments:
Interest expense
19
12
Depreciation expense
954
952
Amortization expense
169
158
EBITDA
(316
)
2,464
Acquisition costs and other
—
2
Stock-based compensation
7
8
Non-cash lease expense
19
24
Specialty Chemicals Adjusted EBITDA
$
(290
)
$
2,498
% segment sales
(1.4
)%
10.5
%
Tubular Products
Net loss from continuing operations
$
(1,502
)
$
(3,293
)
Adjustments:
Depreciation expense
544
575
Amortization expense
198
218
EBITDA
(760
)
(2,500
)
Acquisition costs and other
12
—
Stock-based compensation
11
(20
)
Non-cash lease expense
25
31
Restructuring and severance costs
—
84
Tubular Products Adjusted EBITDA
$
(712
)
$
(2,405
)
% segment sales
(3.0
)%
(7.7
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508735760/en/
Company Contact Ryan
Kavalauskas Chief Financial Officer 1-630-884-9181
Investor Relations Cody
Slach and Cody Cree Gateway Group, Inc. 1-949-574-3860
ACNT@gateway-grp.com
Grafico Azioni Ascent Industries (NASDAQ:ACNT)
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Da Gen 2025 a Feb 2025
Grafico Azioni Ascent Industries (NASDAQ:ACNT)
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Da Feb 2024 a Feb 2025
