MALVERN,
Pa., Feb. 27, 2025 /PRNewswire/ -- Ecovyst Inc.
(NYSE: ECVT) ("Ecovyst" or the "Company"), a leading integrated and
innovative global provider of advanced materials, specialty
catalysts and services, today reported results for the fourth
quarter and full year ended December 31,
2024.
Full Year 2024 Results & Highlights
- Sales of $704.5 million, compared
to $691.1 million in 2023
- Net loss of $6.7 million. Net
loss margin of 1.0%, with diluted net loss per share of
$0.06
- Adjusted net income of $68.6
million, with Adjusted diluted income per share of
$0.58
- Adjusted EBITDA of $238.2
million, with an Adjusted EBITDA margin of 29.0%
- Full year net cash from operations of $149.9 million, Adjusted Free Cash Flow of
$85.5 million. Net debt leverage
ratio at year end was 3.0x (given the net loss for 2024,
calculation of net debt to net income ratio is not meaningful)
- Full year share repurchases of 552,081 shares or $5.0 million
Fourth Quarter 2024 Results & Highlights
- Sales of $182.0 million, compared
to $172.8 million in the fourth
quarter of 2023
- Net loss of $30.5 million
compared to a net income of $30.0
million in the fourth quarter of 2023, with a net loss
margin of 16.8% and with diluted net loss per share of $0.26
- Adjusted net income of $33.0
million with Adjusted diluted income per share of
$0.28
- Adjusted EBITDA of $75.9 million,
up 8.7% compared to the fourth quarter of 2023, with an Adjusted
EBITDA margin of 35.3%
"Ecovyst delivered solid results for the fourth quarter of 2024,
demonstrating the resilience of our core and industrial businesses
in the face of continued demand softness in the global
macroeconomic environment. As a result, we delivered
financial results consistent with our expectations," said
Kurt J. Bitting, Ecovyst's Chief
Executive Officer. "Increased sales volume and positive pricing in
our Ecoservices segment translated into Adjusted EBITDA of
$54 million in the fourth quarter, up
nearly 12% from the fourth quarter of 2023. For our
Advanced Materials & Catalysts segment we saw higher sales of
advanced silicas used in the production of polyethylene in our
Advanced Silicas business, while sales for the Zeolyst Joint
Venture were lower on the expected timing of sales of hydrocracking
and other catalysts."
"We are pleased with the progress we made on our strategic and
operational priorities during 2024. Looking to the future, we
continued to position Ecovyst to capitalize on the growth potential
for advanced plastics recycling, carbon capture and
bio-catalysis. In addition, our investments in reliability
initiatives in Ecoservices have already resulted in a significant
improvement in operational efficiency, contributing to volume
growth in 2024. We remain on track to complete the expansion
of our polyethylene catalyst production capacity at our
Kansas City site by the end of
this year. We are confident this project, as well as the
expansion of capacity at our Chem32 site, will support anticipated
growth in the years to come," Bitting added.
Review of Segment Results and Business Trends
For the fourth quarter, sales were $182.0
million, up 5% compared to the fourth quarter of 2023. Net
loss was $30.5 million with diluted
net loss per share of $0.26 and
Adjusted net income was $33.0 million
with Adjusted diluted income per share of $0.28. The fourth quarter and year-end results
included the impact of a non-cash impairment charge of $65 million on our investment in the Zeolyst
Joint Venture, reducing the carrying value of our investment to its
estimated fair value, primarily due to the demand outlook for
catalyst materials used in emission control applications and the
production of sustainable fuels. In May of 2016, as a result of a
business combination, the investment in the Zeolyst Joint Venture
was increased through purchase accounting fair value adjustments.
This impairment was a partial reduction to the goodwill and trade
name components of the purchase accounting fair value adjustments
recorded as a result of the 2016 business combination.
Adjusted EBITDA was $75.9 million, up
8.7% compared to the fourth quarter of 2023, with an Adjusted
EBITDA margin of 35.3%.
Ecoservices
Fourth quarter 2024 sales for Ecoservices were $148.9 million, compared to $141.4 million in the fourth quarter of 2023. The
increase in sales was primarily driven by higher sales volume and
favorable contract pricing for regeneration services.
Adjusted EBITDA was $54.0 million,
compared to $48.4 million in the
fourth quarter of 2023. The increase reflects the higher sales
volume and favorable contract pricing, lower turnaround costs and
favorable absorption of fixed costs, partially offset by higher
manufacturing and transportation costs driven by inflation.
For the year, sales were $598.3
million, compared to $584.8
million in 2023. The increase was driven by higher
sales volume, for virgin sulfuric acid and regeneration services,
and favorable contract pricing for regeneration services. The sales
contribution was partially offset by lower average selling prices
driven by the pass-through of lower costs, including lower sulfur
costs of approximately $7
million. Adjusted EBITDA was $200.3 million, compared to $200.0 million in 2023, with the benefit of
higher sales volume and favorable contract pricing largely offset
by higher transportation costs and planned maintenance costs,
inclusive of turnarounds, as well as unfavorable net pricing,
reflecting the timing and contractual pass-through of certain
costs, including energy and other indexed costs.
Advanced Materials & Catalysts
During the fourth quarter of 2024, Advanced Silicas sales were
$33.1 million, up $1.7 million compared to the year-ago quarter,
driven primarily by higher sales of advanced silicas used for the
production of polyethylene. Our proportionate 50% share of sales
for the Zeolyst Joint Venture sales was $33.1 million, compared to $52.8 million in the prior-year quarter,
primarily reflecting the timing of hydrocracking catalyst sales.
Fourth quarter of 2024 Adjusted EBITDA for Advanced Materials &
Catalysts, which includes the 50% proportionate share of the
Zeolyst Joint Venture, was $27.9
million up $0.7 million
compared to the year-ago quarter, with the increase reflecting
higher sales volume in Advanced Silicas, favorable absorption of
fixed costs and cost savings within the Zeolyst Joint Venture,
largely offset by lower sales within the Zeolyst Joint Venture.
For the year, Advanced Silicas sales were $106.2 million, compared to $106.3 million in 2023. The change reflects
higher sales for finished polyethylene catalysts and niche custom
catalysts, offset by lower sales of polyethylene catalyst supports.
Our proportionate 50% share of Zeolyst Joint Venture sales
was $116.5 million, compared to
$156.5 million in the prior
year. The decrease reflects lower sales for hydrocracking and
emission control catalysts and lower sales of catalysts used in the
production of sustainable fuels. Adjusted EBITDA for Advanced
Materials & Catalysts of $64.7
million was down 21.0%, with the decrease primarily due to
lower sales volume within the Zeolyst Joint Venture.
Cash Flows and Balance Sheet
Cash flows from operating activities was $149.9 million for the year ended
December 31, 2024, compared to
$137.6 million for the year ended
December 31, 2023. The increase
reflects higher dividends from the Zeolyst Joint Venture partially
offset by lower earnings, higher cash taxes and unfavorable changes
in working capital. At December 31,
2024, the Company had cash and cash equivalents of
$146.0 million, total gross debt of
$870.8 million and availability under
the ABL facility of $75.2 million,
after giving effect to $3.3 million
of outstanding letters of credit and no outstanding borrowings
under the facility, for total available liquidity of $221.2 million. In light of the net loss reported
for the twelve months ended December 31,
2024, calculation of a net debt to net income ratio is not
meaningful, and the net debt leverage ratio was 3.0x.
2025 Financial Outlook
We remain cautious about the near-term outlook for global
macroeconomic activity. However, we expect demand for our
regeneration services business will remain positive in 2025, and we
expect favorable demand for virgin sulfuric acid sales into mining
and industrial applications and continued demand growth in catalyst
activation for Chem32. While our longer-term outlook for
polyethylene catalyst sales remains positive, supported by customer
commitments for the ongoing expansion of polyethylene production
capacity at our Kansas City site,
the near-term demand outlook remains uncertain due to softer global
demand projections. Within the Zeolyst Joint Venture, we
expect sales of hydrocracking catalysts to increase moderately as
we continue to capitalize on the enthusiasm for our MACH offering.
We believe we remain well positioned to address growth
opportunities as they arise in 2025 and we plan to continue to
advance our technology offerings to position Ecovyst to serve the
growth potential presented by advanced plastics recycling,
bio-catalysis, carbon capture and sustainable aviation fuel.
The Company's guidance for full year 2025 is as follows:
- Sales of $755 million to
$815 million1
- Sales of $115 million to
$130 million for proportionate 50%
share of Zeolyst Joint Venture, which is excluded from GAAP
Sales
- Adjusted EBITDA2 of $238
million to $258 million
- Adjusted Free Cash Flow2 of $60 million to $80
million
- Capital expenditures of $80
million to $90 million
- Interest expense of $47 million
to $53 million
- Depreciation & Amortization
- Ecovyst - $87 million to
$93 million
- Zeolyst J.V. - $12 million to
$14 million
- Effective tax rate in the mid 20% range
- Adjusted Net Income2 of $58
million to $85 million, with
Adjusted Diluted Income2 per share of $0.50 to $0.70
|
1
|
Sales outlook for 2025
assumes higher average sulfur prices compared to 2024 and higher
projected pass-through of sulfur costs of approximately $35
million.
|
|
2
|
In 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 net cash provided by operating activities 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.
|
In December 2024, the Company
announced that its Board of Directors has launched a strategic
review of our Advanced Materials & Catalysts segment with the
goal of maximizing long-term stockholder value. The review
remains underway and the Company expects to complete it in
mid-2025. The strategic review process is subject to unknown
variables including the costs, structure, terms and timing thereof,
and the strategic review process may not result in any transaction
or other outcome. The Company does not intend to make any
further public comment regarding the strategic review until it has
been completed or the Company determines that disclosure is
required or beneficial.
Stock Repurchase Authorization
In April 2022, the Company's Board
of Directors approved a stock repurchase program authorizing the
repurchase of up to $450 million of
the Company's outstanding common stock over the next four years. As
of December 31, 2024, $229.6 million was available for share
repurchases under the program.
During the quarter ended December 31,
2024 the Company did not repurchase any of its common
stock. During the year ended December
31, 2024, the Company repurchased 552,081 shares of its
common stock on the open market at an average price of $9.05 per share, for a total cost of $5.0 million, excluding brokerage commissions and
accrued excise tax.
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, February 27, 2025, Ecovyst management will
review the fourth 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 ECVTQ424.
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 U.S.
generally accepted accounting principles ("GAAP") throughout this
press release, the Company has provided non-GAAP financial measures
— Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income,
Free Cash Flow, Adjusted Free Cash Flow, Adjusted diluted income
per share, net debt to net income ratio and net debt leverage ratio
(collectively, "Non-GAAP Financial Measures") — which present
results on a basis adjusted for certain items. The Company uses
these Non-GAAP Financial Measures for business planning purposes
and in measuring its performance relative to that of its
competitors. The Company believes that these Non-GAAP Financial
Measures are useful financial metrics to assess its operating
performance from period-to-period by excluding certain items that
the Company believes are not representative of its core business.
These Non-GAAP Financial Measures are not intended to replace, and
should not be considered superior to, the presentation of the
Company's financial results in accordance with GAAP. The use of the
Non-GAAP Financial Measures terms may differ from similar measures
reported by other companies and may not be comparable to other
similarly titled measures. These Non-GAAP Financial Measures are
reconciled from the respective measures under GAAP in the attached
appendix.
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 50% of the sales of the
Zeolyst Joint Venture. The Company does not record its
proportionate share of sales from the Zeolyst Joint Venture
accounted for using the equity method as revenue and such sales are
not consolidated within its results of operations. However,
Adjusted EBITDA for the Company's Advanced Materials &
Catalysts segment reflects the Company's 50% portion of the
earnings from the Zeolyst Joint Venture that have been recorded as
equity in net income in the Company's consolidated statements of
income for such periods and includes Zeolyst Joint Venture
adjustments on a proportionate basis based on the Company's 50%
ownership interest. Accordingly, the Company's Adjusted EBITDA
margins are calculated including 50% of the sales of the Zeolyst
Joint Venture for the relevant periods in the denominator.
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, the timing and outcome, if any, of the Company's strategic
review process for its Advanced Materials & Catalysts segment
and our 2025 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
CONSOLIDATED
STATEMENTS OF (LOSS) INCOME
(in millions, except
share and per share amounts)
|
|
|
Three months
ended
December
31,
|
|
%
|
|
Years
ended
December
31,
|
|
%
|
|
|
2024
|
|
2023
|
|
Change
|
|
2024
|
|
2023
|
|
Change
|
|
|
|
|
Sales
|
|
$
182.0
|
|
$
172.8
|
|
5.3 %
|
|
$
704.5
|
|
$
691.1
|
|
1.9 %
|
|
Cost of goods
sold
|
|
128.1
|
|
125.5
|
|
2.1 %
|
|
503.0
|
|
493.2
|
|
2.0 %
|
|
Gross
profit
|
|
53.9
|
|
47.3
|
|
14.0 %
|
|
201.5
|
|
197.9
|
|
1.8 %
|
|
Selling, general and
administrative expenses
|
|
19.6
|
|
19.7
|
|
(0.5) %
|
|
83.9
|
|
79.2
|
|
5.9 %
|
|
Other operating
expense, net
|
|
9.7
|
|
4.8
|
|
102.1 %
|
|
19.6
|
|
22.0
|
|
(10.9) %
|
|
Operating
income
|
|
24.6
|
|
22.8
|
|
7.9 %
|
|
98.0
|
|
96.7
|
|
1.3 %
|
|
Equity in net (income)
from affiliated companies
|
|
(12.6)
|
|
(14.3)
|
|
(11.9) %
|
|
(15.1)
|
|
(30.6)
|
|
(50.7) %
|
|
Impairment of
investment in affiliated companies
|
|
65.0
|
|
—
|
|
NM
|
|
65.0
|
|
—
|
|
NM
|
|
Interest expense,
net
|
|
11.8
|
|
13.9
|
|
(15.1) %
|
|
49.4
|
|
44.7
|
|
10.5 %
|
|
Debt extinguishment
costs
|
|
—
|
|
—
|
|
— %
|
|
4.6
|
|
—
|
|
NM
|
|
Other (income) expense,
net
|
|
(1.9)
|
|
—
|
|
NM
|
|
(0.8)
|
|
0.6
|
|
(233.3) %
|
|
(Loss) income before
income taxes
|
|
(37.7)
|
|
23.2
|
|
(262.5) %
|
|
(5.1)
|
|
82.0
|
|
(106.2) %
|
|
(Benefit) provision for
income taxes
|
|
(7.2)
|
|
(6.8)
|
|
5.9 %
|
|
1.6
|
|
10.8
|
|
(85.2) %
|
|
Effective tax
rate
|
|
19.1 %
|
|
(29.3) %
|
|
|
|
(32.5) %
|
|
13.2 %
|
|
|
|
Net (loss)
income
|
|
$
(30.5)
|
|
$ 30.0
|
|
(201.7) %
|
|
$ (6.7)
|
|
$ 71.2
|
|
(109.4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings
per share
|
|
$
(0.26)
|
|
$ 0.26
|
|
|
|
$
(0.06)
|
|
$ 0.60
|
|
|
|
Diluted (loss)
earnings per share
|
|
$
(0.26)
|
|
$ 0.26
|
|
|
|
$
(0.06)
|
|
$ 0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
116,518,933
|
|
116,116,895
|
|
|
|
116,719,437
|
|
118,367,214
|
|
|
|
Diluted
|
|
116,518,933
|
|
117,190,747
|
|
|
|
116,719,437
|
|
119,487,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECOVYST INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in millions, except
share and per share amounts)
|
|
December
31,
|
|
2024
|
|
2023
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
146.0
|
|
$
88.4
|
|
Accounts receivable,
net
|
77.9
|
|
81.3
|
|
Inventories,
net
|
57.1
|
|
45.1
|
|
Derivative
assets
|
6.5
|
|
13.4
|
|
Prepaid and other
current assets
|
16.1
|
|
17.8
|
|
Total current
assets
|
303.6
|
|
246.0
|
|
Investments in
affiliated companies
|
349.3
|
|
440.2
|
|
Property, plant and
equipment, net
|
569.3
|
|
576.9
|
|
Goodwill
|
404.1
|
|
404.5
|
|
Other intangible
assets, net
|
98.4
|
|
116.6
|
|
Right-of-use lease
assets
|
33.6
|
|
24.3
|
|
Other long-term
assets
|
44.0
|
|
29.3
|
|
Total
assets
|
$
1,802.3
|
|
$
1,837.8
|
|
LIABILITIES
|
|
|
|
|
Current maturities of
long-term debt
|
$
8.7
|
|
$
9.0
|
|
Accounts
payable
|
43.9
|
|
40.2
|
|
Operating lease
liabilities—current
|
9.3
|
|
8.2
|
|
Accrued
liabilities
|
53.2
|
|
61.7
|
|
Total current
liabilities
|
115.1
|
|
119.1
|
|
Long-term debt,
excluding current portion
|
852.1
|
|
858.9
|
|
Deferred income
taxes
|
105.4
|
|
115.8
|
|
Operating lease
liabilities—noncurrent
|
24.2
|
|
16.0
|
|
Other long-term
liabilities
|
5.0
|
|
22.5
|
|
Total
liabilities
|
1,101.8
|
|
1,132.3
|
|
Commitments and
contingencies
|
|
|
|
|
EQUITY
|
|
|
|
|
Common stock ($0.01
par); authorized shares 450,000,000; issued shares 140,872,846 and
140,774,045
on December 31, 2024 and 2023, respectively; outstanding shares
116,534,803 and 116,116,895 on
December 31, 2024 and 2023, respectively
|
1.4
|
|
1.4
|
|
Preferred stock ($0.01
par); authorized shares 50,000,000; no shares issued or outstanding
on
December 31, 2024 and 2023, respectively
|
—
|
|
—
|
|
Additional paid-in
capital
|
1,106.8
|
|
1,102.6
|
|
Accumulated
deficit
|
(177.5)
|
|
(170.9)
|
|
Treasury stock, at
cost; shares 24,338,043 and 24,627,150 on December 31, 2024 and
2023, respectively
|
(222.8)
|
|
(226.7)
|
|
Accumulated other
comprehensive loss
|
(7.4)
|
|
(0.9)
|
|
Total
equity
|
700.5
|
|
705.5
|
|
Total liabilities and
equity
|
$
1,802.3
|
|
$
1,837.8
|
|
ECOVYST INC. AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Years ended December
31,
|
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
(in
millions)
|
|
Net (loss)
income
|
|
$
(6.7)
|
|
$
71.2
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation
|
|
75.3
|
|
70.6
|
|
Amortization
|
|
14.1
|
|
14.0
|
|
Intangible asset
impairment charge
|
|
3.9
|
|
—
|
|
Amortization of
deferred financing costs and original issue discount
|
|
1.7
|
|
2.1
|
|
Debt extinguishment
costs
|
|
0.1
|
|
—
|
|
Foreign currency
exchange loss (gain)
|
|
0.3
|
|
(0.6)
|
|
Deferred income tax
benefit
|
|
(7.9)
|
|
(17.1)
|
|
Net loss on asset
disposals
|
|
2.4
|
|
4.1
|
|
Stock
compensation
|
|
14.0
|
|
16.0
|
|
Equity in net (income)
from affiliated companies
|
|
(15.1)
|
|
(30.6)
|
|
Dividends received
from affiliated companies
|
|
38.0
|
|
28.0
|
|
Impairment of
investment in affiliated companies
|
|
65.0
|
|
—
|
|
Other, net
|
|
(14.3)
|
|
0.6
|
|
Working capital
changes that provided (used) cash:
|
|
|
|
|
|
Receivables
|
|
3.1
|
|
(6.1)
|
|
Inventories
|
|
(11.2)
|
|
(1.4)
|
|
Prepaids and other
current assets
|
|
3.4
|
|
(1.0)
|
|
Accounts
payable
|
|
2.4
|
|
2.4
|
|
Accrued
liabilities
|
|
(18.6)
|
|
(14.6)
|
|
Net cash provided by
operating activities
|
|
149.9
|
|
137.6
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(69.0)
|
|
(65.3)
|
|
Investment in
non-marketable equity securities
|
|
(4.5)
|
|
—
|
|
Net cash used in
investing activities
|
|
(73.5)
|
|
(65.3)
|
|
|
|
|
|
|
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
|
|
(879.7)
|
|
(9.0)
|
|
Repurchases of common
shares
|
|
(5.0)
|
|
(78.7)
|
|
Tax withholdings on
equity award vesting
|
|
(1.2)
|
|
(3.4)
|
|
Repayments of
financing obligation
|
|
(3.0)
|
|
(2.8)
|
|
Other, net
|
|
0.2
|
|
0.4
|
|
Net cash used in
financing activities
|
|
(17.9)
|
|
(93.5)
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(0.9)
|
|
(1.3)
|
|
Net change in cash and
cash equivalents
|
|
57.6
|
|
(22.5)
|
|
Cash and cash
equivalents at beginning of period
|
|
88.4
|
|
110.9
|
|
Cash and cash
equivalents at end of period
|
|
$
146.0
|
|
$
88.4
|
|
Appendix Table A-1:
Reconciliation of Net (Loss) Income to Adjusted
EBITDA
|
|
|
Three months
ended
December
31,
|
|
Years
ended
December
31,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
(in
millions)
|
|
Reconciliation of
net (loss) income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(30.5)
|
|
$
30.0
|
|
$
(6.7)
|
|
$
71.2
|
|
(Benefit) provision
for income taxes
|
|
(7.2)
|
|
(6.8)
|
|
1.6
|
|
10.8
|
|
Interest expense,
net
|
|
11.8
|
|
13.9
|
|
49.4
|
|
44.7
|
|
Depreciation and
amortization
|
|
22.6
|
|
22.1
|
|
89.4
|
|
84.6
|
|
EBITDA
|
|
(3.3)
|
|
59.2
|
|
133.7
|
|
211.3
|
|
Joint venture
depreciation, amortization and interest(a)
|
|
3.2
|
|
3.3
|
|
13.3
|
|
13.4
|
|
Amortization of
investment in affiliate step-up(b)
|
|
0.6
|
|
1.6
|
|
3.8
|
|
6.4
|
|
Impairment of
investment in affiliated companies(c)
|
|
65.0
|
|
—
|
|
65.0
|
|
—
|
|
Intangible asset
impairment charge
|
|
3.9
|
|
—
|
|
3.9
|
|
—
|
|
Debt extinguishment
costs
|
|
—
|
|
—
|
|
4.6
|
|
—
|
|
Net loss on asset
disposals(d)
|
|
1.6
|
|
0.8
|
|
2.4
|
|
4.1
|
|
Foreign currency
exchange gain(e)
|
|
(0.3)
|
|
(0.9)
|
|
(0.2)
|
|
(1.3)
|
|
LIFO expense
(benefit)(f)
|
|
1.0
|
|
1.0
|
|
(2.2)
|
|
3.5
|
|
Transaction and other
related costs(g)
|
|
0.2
|
|
0.2
|
|
0.4
|
|
3.0
|
|
Equity-based
compensation
|
|
3.5
|
|
3.4
|
|
14.0
|
|
16.0
|
|
Restructuring,
integration and business optimization
expenses(h)
|
|
0.1
|
|
0.3
|
|
1.0
|
|
2.7
|
|
Other(i)
|
|
0.4
|
|
0.9
|
|
(1.5)
|
|
0.8
|
|
Adjusted
EBITDA
|
|
$
75.9
|
|
$
69.8
|
|
$
238.2
|
|
$
259.9
|
|
|
|
|
|
|
|
|
|
|
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 reflects our 50%
portion of the earnings from the Zeolyst Joint Venture, we include
an adjustment for our 50% proportionate share of depreciation,
amortization and interest expense of the Zeolyst Joint
Venture.
|
|
(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)
|
Represents fair value
impairments associated with the equity affiliate investment in the
Zeolyst Joint Venture. During the year ended December 31, 2024, we
recognized an impairment charge on our investment in the Zeolyst
Joint Venture to reduce the carrying value of our investment to its
estimated fair value. This impairment was a partial reduction to
the goodwill and trade name components of the purchase accounting
fair value adjustments recorded as a result of the combination of
the businesses of PQ Holdings Inc. and Eco Services Operations LLC
in May 2016.
|
|
(d)
|
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.
|
|
(e)
|
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.
|
|
(f)
|
Represents non-cash
adjustments to the Company's LIFO reserves for certain inventories
in the U.S. that are valued using the LIFO method, effectively
reflecting the results as if these inventories were valued using
the FIFO method, which we believe provides a means of comparison to
other companies that may not use the same basis of accounting for
inventories.
|
|
(g)
|
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.
|
|
(h)
|
Includes the impact of
restructuring, integration and business optimization expenses,
which are incremental costs that are not representative of our
ongoing business operations.
|
|
(i)
|
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 (Loss) Income and EPS to Adjusted Net Income
and Adjusted EPS(1)
|
|
Three months ended
December 31,
|
|
2024
|
|
2023
|
|
Pre-tax
|
Tax
expense
(benefit)
|
After-
tax
|
Per share,
basic
|
Per share,
diluted
|
|
Pre-tax
|
Tax
expense
(benefit)
|
After-
tax
|
Per share,
basic
|
Per share,
diluted
|
|
(in millions, except
share and per share amounts)
|
|
Net (loss)
income
|
$
(37.7)
|
$
(7.2)
|
$
(30.5)
|
$
(0.26)
|
$
(0.26)
|
|
$
23.2
|
$
(6.8)
|
$
30.0
|
$
0.26
|
$
0.26
|
|
Amortization of
investment in affiliate step-up(b)
|
0.6
|
0.1
|
0.5
|
—
|
—
|
|
1.6
|
0.3
|
1.3
|
0.01
|
0.01
|
|
Impairment of
investment in affiliated companies(c)
|
65.0
|
0.5
|
64.5
|
0.55
|
0.55
|
|
—
|
—
|
—
|
—
|
—
|
|
Intangible asset
impairment charge
|
3.9
|
1.0
|
2.9
|
0.02
|
0.02
|
|
—
|
—
|
—
|
—
|
—
|
|
Net loss on asset
disposals(d)
|
1.6
|
0.5
|
1.1
|
0.01
|
0.01
|
|
0.8
|
0.1
|
0.7
|
0.01
|
0.01
|
|
Foreign currency
exchange gain(e)
|
(0.3)
|
(0.1)
|
(0.2)
|
—
|
—
|
|
(0.9)
|
(0.2)
|
(0.7)
|
(0.01)
|
(0.01)
|
|
LIFO
expense(f)
|
1.0
|
0.2
|
0.8
|
0.01
|
0.01
|
|
1.0
|
0.2
|
0.8
|
0.01
|
0.01
|
|
Transaction and other
related costs(g)
|
0.2
|
—
|
0.2
|
—
|
—
|
|
0.2
|
—
|
0.2
|
—
|
—
|
|
Equity-based
compensation
|
3.5
|
0.8
|
2.7
|
0.02
|
0.02
|
|
3.4
|
0.3
|
3.1
|
0.03
|
0.03
|
|
Restructuring,
integration and business optimization
expenses(h)
|
0.1
|
—
|
0.1
|
—
|
—
|
|
0.3
|
0.1
|
0.2
|
—
|
—
|
|
Other(i)
|
0.4
|
0.1
|
0.3
|
0.01
|
0.01
|
|
0.9
|
0.2
|
0.7
|
—
|
—
|
|
Adjusted Net Income,
including impact of valuation allowance release
and changes in
uncertain tax positions release
|
38.3
|
(4.1)
|
42.4
|
0.36
|
0.36
|
|
30.5
|
(5.8)
|
36.3
|
0.31
|
0.31
|
|
Impact of valuation
allowance release(2)
|
—
|
—
|
—
|
—
|
—
|
|
—
|
10.2
|
(10.2)
|
(0.09)
|
(0.09)
|
|
Changes in uncertain
tax positions release(3)
|
—
|
9.4
|
(9.4)
|
(0.08)
|
(0.08)
|
|
—
|
—
|
—
|
—
|
—
|
|
Adjusted Net
Income(1)
|
$
38.3
|
$ 5.3
|
$
33.0
|
$
0.28
|
$
0.28
|
|
$
30.5
|
$ 4.4
|
$
26.1
|
$
0.22
|
$
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
116,518,933
|
117,515,453
|
|
|
|
|
116,116,895
|
117,190,747
|
|
Years ended December
31,
|
|
2024
|
|
2023
|
|
Pre-tax
|
Tax
expense
(benefit)
|
After-
tax
|
Per share,
basic
|
Per share,
diluted
|
|
Pre-tax
|
Tax
expense
(benefit)
|
After-
tax
|
Per share,
basic
|
Per share,
diluted
|
|
(in millions, except
share and per share amounts)
|
|
Net (loss)
income
|
$
(5.1)
|
$ 1.6
|
$
(6.7)
|
$
(0.06)
|
$
(0.06)
|
|
$
82.0
|
$
10.8
|
$
71.2
|
$
0.60
|
$
0.60
|
|
Amortization of
investment in affiliate step-up(b)
|
3.8
|
1.0
|
2.8
|
0.02
|
0.02
|
|
6.4
|
1.6
|
4.8
|
0.04
|
0.04
|
|
Impairment of
investment in affiliated companies(c)
|
65.0
|
0.5
|
64.5
|
0.55
|
0.55
|
|
—
|
—
|
—
|
—
|
—
|
|
Intangible asset
impairment charge
|
3.9
|
1.0
|
2.9
|
0.02
|
0.02
|
|
—
|
—
|
—
|
—
|
—
|
|
Debt extinguishment
costs
|
4.6
|
1.2
|
3.4
|
0.03
|
0.03
|
|
—
|
—
|
—
|
—
|
—
|
|
Net loss on asset
disposals(d)
|
2.4
|
0.6
|
1.8
|
0.02
|
0.01
|
|
4.1
|
1.0
|
3.1
|
0.03
|
0.03
|
|
Foreign currency
exchange gain(e)
|
(0.2)
|
(0.1)
|
(0.1)
|
—
|
—
|
|
(1.3)
|
(0.3)
|
(1.0)
|
(0.01)
|
(0.01)
|
|
LIFO (benefit)
expense(f)
|
(2.2)
|
(0.6)
|
(1.6)
|
(0.01)
|
(0.01)
|
|
3.5
|
0.9
|
2.6
|
0.02
|
0.02
|
|
Transaction and other
related costs(g)
|
0.4
|
0.1
|
0.3
|
—
|
—
|
|
3.0
|
0.8
|
2.2
|
0.02
|
0.02
|
|
Equity-based
compensation
|
14.0
|
3.0
|
11.0
|
0.09
|
0.09
|
|
16.0
|
1.5
|
14.5
|
0.12
|
0.12
|
|
Restructuring,
integration and business optimization
expenses(h)
|
1.0
|
0.3
|
0.7
|
0.01
|
0.01
|
|
2.7
|
0.7
|
2.0
|
0.02
|
0.02
|
|
Other(i)
|
(1.5)
|
(0.5)
|
(1.0)
|
—
|
—
|
|
0.8
|
0.2
|
0.6
|
0.01
|
—
|
|
Adjusted Net Income,
including impact of valuation allowance release
and changes in
uncertain tax positions release
|
86.1
|
8.1
|
78.0
|
0.67
|
0.66
|
|
117.2
|
17.2
|
100.0
|
0.85
|
0.84
|
|
Impact of valuation
allowance release(2)
|
—
|
—
|
—
|
—
|
—
|
|
—
|
10.2
|
(10.2)
|
(0.09)
|
(0.09)
|
|
Changes in uncertain
tax positions release(3)
|
—
|
9.4
|
(9.4)
|
(0.08)
|
(0.08)
|
|
—
|
—
|
—
|
—
|
—
|
|
Adjusted Net
Income(1)
|
$
86.1
|
$
17.5
|
$
68.6
|
$
0.59
|
$
0.58
|
|
$
117.2
|
$
27.4
|
$
89.8
|
$
0.76
|
$
0.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
116,719,437
|
117,447,438
|
|
|
|
|
118,367,214
|
119,487,709
|
|
See Appendix Table A-1
for Descriptions to Ecovyst Non-GAAP Reconciliations in the table
above.
|
|
|
|
(1)
|
We define Adjusted Net
Income as net (loss) income adjusted for non-operating income or
expense and the impact of certain non-cash or other items that are
included in net (loss) 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 (loss) income or Adjusted Net Income as defined by other
companies.
|
|
(2)
|
Represents the tax
impact of the state tax credit valuation allowance release. Item is
not expected to be recurring.
|
|
(3)
|
Represents the tax
impact of previously net unrecognized tax benefits, excluding
interest and penalties, primarily due to the expiration of statutes
of limitations.
|
The adjustments to net income are shown net of applicable tax
rates of 25.3% and 25.4% for the years ended December 31, 2024 and 2023, respectively, except
for equity-based compensation and the impairment of investment in
affiliated companies. The tax effect on equity-based compensation
is derived by removing the tax effect of any equity-based
compensation expense disallowed as a result of its inclusion
within IRC Sec. 162(m) and adding the tax effect of
equity-based compensation shortfall recorded as a discrete item.
The tax effect on the impairment of investment in affiliated
companies is derived by removing the tax impact of the
non-deductible component specific to goodwill.
|
Appendix Table
A-3: Sales and Adjusted EBITDA by Business
Segment
|
|
|
Three months
ended
December
31,
|
|
|
|
Years
ended
December
31,
|
|
|
|
|
2024
|
|
2023
|
|
%
Change
|
|
2024
|
|
2023
|
|
%
Change
|
|
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ecoservices
|
|
$
148.9
|
|
$
141.4
|
|
5.3 %
|
|
$
598.3
|
|
$
584.8
|
|
2.3 %
|
|
Advanced Materials
& Catalysts(1)
|
|
33.1
|
|
31.4
|
|
5.4 %
|
|
106.2
|
|
106.3
|
|
(0.1) %
|
|
Total
sales
|
|
$
182.0
|
|
$
172.8
|
|
5.3 %
|
|
$
704.5
|
|
$
691.1
|
|
1.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zeolyst Joint Venture
sales
|
|
$ 33.1
|
|
$ 52.8
|
|
(37.3) %
|
|
$
116.5
|
|
$
156.5
|
|
(25.6) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ecoservices
|
|
$ 54.0
|
|
$ 48.4
|
|
11.6 %
|
|
$
200.3
|
|
$
200.0
|
|
0.2 %
|
|
Advanced Materials
& Catalysts
|
|
27.9
|
|
27.2
|
|
2.6 %
|
|
64.7
|
|
81.9
|
|
(21.0) %
|
|
Unallocated corporate
expenses
|
|
(6.0)
|
|
(5.8)
|
|
3.4 %
|
|
(26.8)
|
|
(22.0)
|
|
21.8 %
|
|
Total Adjusted
EBITDA
|
|
$ 75.9
|
|
$ 69.8
|
|
8.7 %
|
|
$
238.2
|
|
$
259.9
|
|
(8.3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ecoservices
|
|
36.3 %
|
|
34.2 %
|
|
|
|
33.5 %
|
|
34.2 %
|
|
|
|
Advanced Materials
& Catalysts(2)
|
|
42.1 %
|
|
32.3 %
|
|
|
|
29.1 %
|
|
31.2 %
|
|
|
|
Total Adjusted
EBITDA Margin(2)
|
|
35.3 %
|
|
30.9 %
|
|
|
|
29.0 %
|
|
30.7 %
|
|
|
|
(1)
|
Represents GAAP sales
for the Advanced Silicas business; Excludes our proportionate 50%
share of sales from the Zeolyst Joint Venture.
|
|
(2)
|
Adjusted EBITDA Margin
calculation reflects our proportionate 50% share of sales from the
Zeolyst Joint Venture.
|
|
Appendix Table A-4:
Adjusted Free Cash Flow
|
|
|
Years ended December
31,
|
|
|
2024
|
|
2023
|
|
|
(in
millions)
|
|
Net cash provided by
operating activities
|
|
$ 149.9
|
|
$ 137.6
|
|
Less:
|
|
|
|
|
|
Purchases of property,
plant and equipment(1)
|
|
(69.0)
|
|
(65.3)
|
|
Free Cash
Flow(2)
|
|
$
80.9
|
|
$
72.3
|
|
|
|
|
|
|
Adjustments to Free
Cash Flow:
|
|
|
|
|
|
Cash paid for debt
financing costs included in cash from operating
activities
|
|
4.6
|
|
—
|
|
Adjusted Free Cash
Flow(2)
|
|
$
85.5
|
|
$
72.3
|
|
|
|
|
|
|
Net cash used in
investing activities(3)
|
|
$
(73.5)
|
|
$
(65.3)
|
|
Net cash used in
financing activities
|
|
$
(17.9)
|
|
$
(93.5)
|
|
(1)
|
Excludes the Company's
proportionate 50% share of capital expenditures from the Zeolyst
Joint Venture.
|
|
(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
|
|
December
31,
|
|
2024
|
|
2023
|
|
(in millions, except
ratios)
|
|
Total debt
|
$
870.8
|
|
$
877.5
|
|
Less:
|
|
|
|
|
Cash and cash
equivalents
|
146.0
|
|
88.4
|
|
Net debt
|
$
724.8
|
|
$
789.1
|
|
|
|
|
|
Net (loss)
income
|
$
(6.7)
|
|
$
71.2
|
|
Adjusted
EBITDA(1)
|
$
238.2
|
|
$
259.9
|
|
|
|
|
|
Net Debt to Net Income
Ratio
|
NM
|
|
11.1x
|
|
Net Debt Leverage
Ratio
|
3.0x
|
|
3.0x
|
|
|
|
|
|
(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.
