Financial Data and Key Metrics Changes - Revenue increased sequentially by $817,000 to $18,700,000, but decreased by 13% compared to the prior year [7][18] - Gross profit rose by $1,800,000 from Q1 and $2,100,000 year over year, with gross margin expanding to 26.1% [7][19] - Adjusted EBITDA showed a loss of $335,000 for the quarter, which is a sequential improvement of $131,000 but fell short by $53,000 compared to the prior year [7][22] Business Line Data and Key Metrics Changes - The Tubular segment has been fully divested, with only the idle facility in Munhall remaining as a financial drag [4] - The company is now a pure play specialty chemical company, focusing on higher margin opportunities and operational efficiencies [5][10] Market Data and Key Metrics Changes - The broader chemical market has shown softness, with manufacturing activity remaining below expansion territory, impacting overall demand [18][19] - Despite a 29.6% year-over-year decline in volume, pricing actions have helped mitigate some of the impacts [20] Company Strategy and Development Direction - The company is focused on organic and inorganic growth, with a disciplined approach to capital allocation and share repurchases [6][22] - A significant increase in the selling project pipeline by $25,000,000 indicates a strong focus on higher value commercial engagements [12][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted EBITDA margins of 15% by targeting $120,000,000 to $130,000,000 in revenue [28] - The company aims to maintain momentum through disciplined execution and capital stewardship, with expectations for continued improvement in profitability [23][41] Other Important Information - The company ended Q2 with $60,500,000 in cash, no debt, and $13,400,000 available under its revolver, indicating a strong financial position [22] - The share buyback program is not linked to any equity compensation plan but reflects the belief in the company's undervaluation [32] Q&A Session Summary Question: What revenue number is contemplated for the 2030 adjusted EBITDA margin target? - Management is confident in reaching $120,000,000 to $130,000,000 in revenue within the existing asset base [28] Question: How should the near to intermediate term new business pipeline be quantified? - The selling project pipeline increased by $25,000,000, spread across various market segments, indicating a mix of product sales and custom manufacturing [30] Question: Has the executive management equity compensation plan been presented to the board? - The share buyback was based on the belief that the company is undervalued, not related to any equity program for senior leaders [32] Question: What catalysts are expected for a rerating of the company? - Growth is seen as the primary catalyst, with a focus on both organic and inorganic growth [38] Question: Is a return to profitability expected in the near term? - Management is targeting profitability, excluding the Munhall aspect, and is optimistic about achieving this [41] Question: Will the company consider acquisitions in the future? - The company is looking for smaller transactions that can demonstrate growth synergies before pursuing larger acquisitions [46][58] Question: What multiples are expected for potential acquisitions? - The company aims to acquire assets at a lower end of the 6 to 8 times EBITDA range, focusing on disciplined growth [56][60]

[PART I. FINANCIAL INFORMATION](index=2&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Disclosure Regarding Forward Looking Statements](index=3&type=section&id=Disclosure%20Regarding%20Forward%20Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, identifying them by specific terminology and outlining various risks and uncertainties that could cause actual results to differ materially from historical or anticipated outcomes - Forward-looking statements are identified by words such as "estimate," "project," "intend," "expect," "believe," "should," "anticipate," "hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar expressions[8](index=8&type=chunk) - Potential risks and uncertainties include adverse economic conditions (e.g., pandemics), inability to weather economic downturns, competitive products/pricing, product demand risks, raw material costs/availability, financial stability of customers, production delays, loss of confidence, employee relations, acquisition risks, environmental issues, tax law changes, and inability to comply with debt covenants[8](index=8&type=chunk) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flow statements, and statements of shareholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial items for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $60,479 | $16,098 | | Total current assets | $86,911 | $83,072 | | Total assets | $122,580 | $147,250 | | Total current liabilities | $13,082 | $22,347 | | Total liabilities | $32,864 | $53,705 | | Total shareholders' equity | $89,716 | $93,545 | [Condensed Consolidated Statements of Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $18,652 | $21,468 | $36,486 | $41,764 | | Gross profit | $4,866 | $2,813 | $7,933 | $4,199 | | Operating loss from continuing operations | $(2,687) | $(1,843) | $(4,728) | $(6,337) | | Net income (loss) | $6,286 | $(926) | $3,993 | $(6,419) | | Net income (loss) per common share (Basic) | $0.65 | $(0.09) | $0.40 | $(0.64) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,096) | $2,430 | | Net cash provided by (used in) investing activities | $53,959 | $(770) | | Net cash (used in) provided by financing activities | $(7,492) | $84 | | Increase in cash and cash equivalents | $44,371 | $1,744 | | Cash and cash equivalents at end of period | $60,479 | $3,595 | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Condensed Consolidated Statements of Shareholders' Equity (in thousands) | (in thousands) | Balance at Dec 31, 2024 | Net Income (Loss) | Repurchase of Common Stock | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $93,545 | $3,993 | $(8,044) | $89,716 | Condensed Consolidated Statements of Shareholders' Equity (in thousands) | (in thousands) | Balance at Dec 31, 2023 | Net Income (Loss) | Repurchase of Common Stock | Balance as of June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $107,410 | $(6,419) | $(317) | $101,042 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1: Basis of Presentation](index=9&type=section&id=Note%201:%20Basis%20of%20Presentation) This note outlines the basis for preparing the unaudited condensed consolidated financial statements, emphasizing compliance with SEC rules and GAAP, the use of management estimates, and reclassifications - The Company reclassified its Tubular Products segment (including BRISMET and ASTI) to discontinued operations and adjusted prior period amounts to conform to current period presentation[26](index=26&type=chunk) - Adopted ASU 2023-07 (Segment Reporting) in December 2024, which did not have a material effect on consolidated financial statements or footnote disclosures[27](index=27&type=chunk) - Currently evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years ending December 31, 2025 and 2027, respectively[28](index=28&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 2: Discontinued Operations](index=10&type=section&id=Note%202:%20Discontinued%20Operations) This note details the divestitures of Bristol Metals (BRISMET) and American Stainless Tubing (ASTI) in 2025, which were previously part of the Tubular Products segment - Divestiture of Bristol Metals (BRISMET) completed on April 4, 2025, for approximately **$45 million** in cash proceeds, resulting in a preliminary, pretax gain on sale of **$4.4 million**[33](index=33&type=chunk) - Divestiture of American Stainless Tubing (ASTI) completed on June 30, 2025, for approximately **$16 million** in cash proceeds, resulting in a preliminary, pretax gain on sale of **$4.6 million**[34](index=34&type=chunk) Summary of Discontinued Operations (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $8,188 | $28,741 | $34,460 | $52,797 | | Gross profit | $1,474 | $2,115 | $4,690 | $2,852 | | Net income (loss) from discontinued operations | $8,733 | $524 | $8,446 | $(1,488) | [Note 3: Revenue Recognition](index=11&type=section&id=Note%203:%20Revenue%20Recognition) This note details the Company's revenue recognition policies, primarily from contracts to produce, ship, and deliver specialty chemical products, with revenue recognized when control is transferred to customers, typically upon shipment - Revenue is generated primarily from contracts to produce, ship and deliver specialty chemical products, recognized when control of goods or services is transferred to customers upon shipment[37](index=37&type=chunk) Disaggregated Revenue from Continuing Operations (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Custom Manufacturing | $14,259 | $15,001 | $27,789 | $30,763 | | Product Innovation & Sales | $4,393 | $6,467 | $8,697 | $11,001 | | Net sales | $18,652 | $21,468 | $36,486 | $41,764 | | Point-in-time | $11,685 | $17,790 | $25,317 | $33,153 | | Over-time | $6,967 | $3,678 | $11,169 | $8,611 | [Note 4: Fair Value of Financial Instruments](index=12&type=section&id=Note%204:%20Fair%20Value%20of%20Financial%20Instruments) This note defines the fair value hierarchy (Levels 1, 2, and 3) and discusses non-recurring fair value measurements, specifically an impairment charge related to a right-of-use asset for the former Munhall facility - In Q2 2025, the Company incurred an impairment charge of **$1.6 million** related to the write-down of the right-of-use asset for the Master lease associated with the former Munhall facility[48](index=48&type=chunk) - The fair values of cash and cash equivalents, accounts receivable, accounts payable, and the Company's note payable approximated their carrying value due to their short-term nature[50](index=50&type=chunk) [Note 5: Inventories](index=13&type=section&id=Note%205:%20Inventories) This note outlines the Company's inventory valuation method (lower of cost or net realizable value) and presents the components of inventories from continuing operations Inventories from Continuing Operations (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $5,880 | $5,506 | | Finished goods | $2,216 | $1,381 | | Less: inventory reserves | $(1,430) | $(1,160) | | Inventories, net | $6,666 | $5,727 | [Note 6: Property, Plant and Equipment](index=14&type=section&id=Note%206:%20Property,%20Plant%20and%20Equipment) This note provides a breakdown of property, plant, and equipment from continuing operations and the associated depreciation expense for the reported periods Property, Plant and Equipment, Net (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Land | $518 | $665 | | Leasehold improvements | $2,343 | $2,220 | | Buildings | $1,720 | $1,475 | | Machinery, fixtures and equipment | $39,126 | $39,038 | | Construction-in-progress | $733 | $875 | | Total gross PP&E | $44,440 | $44,273 | | Less: accumulated depreciation and amortization | $(28,198) | $(26,684) | | Property, plant and equipment, net | $16,242 | $17,589 | Total Depreciation Expense (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total depreciation | $881 | $985 | $1,870 | $1,961 | [Note 7: Intangible Assets and Deferred Charges](index=14&type=section&id=Note%207:%20Intangible%20Assets%20and%20Deferred%20Charges) This note describes the Company's intangible assets, primarily from business acquisitions and amortized over 15 years, and deferred charges, representing debt issuance costs amortized over four years Definite-lived Intangible Assets (in thousands) | (in thousands) | June 30, 2025 Gross Carrying Amount | June 30, 2025 Accumulated Amortization | December 31, 2024 Gross Carrying Amount | December 31, 2024 Accumulated Amortization | | :--- | :--- | :--- | :--- | :--- | | Customer related | $5,100 | $(2,451) | $5,100 | $(2,167) | | Trademarks and trade names | $150 | $(37) | $150 | $(32) | | Other | $500 | $(123) | $500 | $(106) | | Total definite-lived intangible assets | $5,750 | $(2,611) | $5,750 | $(2,305) | Estimated Amortization Expense for Intangible Assets (in thousands) | (in thousands) | Amount | | :--- | :--- | | Remainder of 2025 | $306 | | 2026 | $468 | | 2027 | $375 | | 2028 | $310 | | 2029 | $277 | | 2030 | $248 | | Thereafter | $1,155 | Deferred Charges, Net (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deferred charges, gross | $401 | $326 | | Accumulated amortization of deferred charges | $(25) | $(17) | | Deferred charges, net | $376 | $309 | [Note 8: Debt](index=15&type=section&id=Note%208:%20Debt) This note details the Company's short-term debt and credit facilities, including recent amendments that reduced the revolving loan commitment and released liens on divested assets, while confirming compliance with debt covenants - The Company entered into a **$1.1 million** note payable on June 21, 2025, with an annual interest rate of **3.68%** maturing April 1, 2026, for insurance premium financing[57](index=57&type=chunk) - The Fourth Credit Facility Amendment (April 4, 2025) reduced the maximum revolving loan commitment from **$60 million** to **$30 million** and released liens on BRISMET assets[58](index=58&type=chunk) - The Fifth Credit Facility Amendment (June 30, 2025) released liens on ASTI assets; the maximum revolving loan commitment remains **$30 million**, with **$13.4 million** remaining availability as of June 30, 2025[59](index=59&type=chunk)[62](index=62&type=chunk) - The Company was in compliance with all financial debt covenants as of June 30, 2025, and had no debt outstanding under its credit facilities[61](index=61&type=chunk)[62](index=62&type=chunk) [Note 9: Leases](index=15&type=section&id=Note%209:%20Leases) This note describes the Company's operating and finance leases, highlighting recent amendments to the Master Lease Agreement due to divestitures, which resulted in a gain on modification and reduced lease liabilities - The Fifth Master Lease (April 4, 2025) removed the BRISMET facility, resulting in a **$0.5 million** gain on modification and a decrease in right-of-use assets and operating lease liabilities[65](index=65&type=chunk) - The Sixth Master Lease (June 30, 2025) removed the ASTI facility, leading to a **$4.0 million** decrease in right-of-use assets and operating lease liabilities[66](index=66&type=chunk) Total Lease Cost (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $768 | $980 | $1,721 | $1,960 | | Finance lease cost (Amortization) | $75 | $78 | $151 | $160 | | Finance lease cost (Interest) | $18 | $22 | $36 | $44 | | Sublease income | $(114) | $(92) | $(261) | $(184) | | Total lease cost | $747 | $988 | $1,647 | $1,980 | Future Expected Cash Receipts from Sublease (in thousands) | (in thousands) | Sublease Receipts | | :--- | :--- | | Remainder of 2025 | $293 | | 2026 | $594 | | 2027 | $606 | | 2028 | $618 | | 2029 | $631 | | Thereafter | $4,597 | | Total sublease receipts | $7,339 | Undiscounted Future Minimum Lease Payments (in thousands) | (in thousands) | Operating | Finance | | :--- | :--- | :--- | | Remainder of 2025 | $1,247 | $180 | | 2026 | $2,481 | $361 | | 2027 | $2,532 | $361 | | 2028 | $2,584 | $303 | | 2029 | $2,637 | $85 | | Thereafter | $18,310 | $— | | Total undiscounted minimum future lease payments | $29,791 | $1,290 | [Note 10: Shareholders' Equity](index=17&type=section&id=Note%2010:%20Shareholders'%20Equity) This note details the Company's share repurchase program, including the authorization of a new program in February 2025 and the number of shares repurchased during the reported periods - A new share repurchase program was authorized on February 17, 2025, allowing for the repurchase of up to **1.0 million shares** of common stock over 24 months[74](index=74&type=chunk) - As of June 30, 2025, the Company had **339,752 shares** remaining under its share repurchase authorization[74](index=74&type=chunk) Shares Repurchased (Three and Six Months Ended June 30) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Number of shares repurchased | 644,171 | 15,233 | 660,993 | 31,563 | | Average price per share | $12.15 | $10.25 | $12.17 | $10.10 | | Total cost of shares repurchased | $7,848,761 | $156,577 | $8,063,383 | $319,798 | [Note 11: Earnings Per Share](index=18&type=section&id=Note%2011:%20Earnings%20Per%20Share) This note provides the computation of basic and diluted earnings per share, distinguishing between continuing and discontinued operations Earnings Per Share Computation (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss from continuing operations | $(2,447) | $(1,450) | $(4,453) | $(4,931) | | Net income (loss) from discontinued operations | $8,733 | $524 | $8,446 | $(1,488) | | Net income (loss) | $6,286 | $(926) | $3,993 | $(6,419) | | Basic EPS from continuing operations | $(0.25) | $(0.14) | $(0.45) | $(0.49) | | Diluted EPS from continuing operations | $(0.25) | $(0.14) | $(0.45) | $(0.49) | | Basic EPS from discontinued operations | $0.90 | $0.05 | $0.85 | $(0.15) | | Diluted EPS from discontinued operations | $0.90 | $0.05 | $0.85 | $(0.15) | | Basic Net income (loss) per share | $0.65 | $(0.09) | $0.40 | $(0.64) | | Diluted Net income (loss) per share | $0.65 | $(0.09) | $0.40 | $(0.64) | [Note 12: Income Taxes](index=18&type=section&id=Note%2012:%20Income%20Taxes) This note presents the Company's income tax benefit and effective tax rates for continuing operations, explaining the factors influencing the rates, particularly the impact of valuation allowances Income Tax Benefit and Effective Tax Rates (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income tax benefit | $(89) | $(372) | $(89) | $(1,393) | | Effective income tax rate | 2.1% | 20.4% | 2.0% | 22.0% | - The effective tax rate for continuing operations was lower than the U.S. statutory rate of **21.0%** in 2025 primarily due to the valuation allowance over federal and U.S. state deferred tax assets[80](index=80&type=chunk) [Note 13: Commitments and Contingencies](index=19&type=section&id=Note%2013:%20Commitments%20and%20Contingencies) This note addresses the Company's legal proceedings, including the resolution of a specific lawsuit in January 2025 and general involvement in various legal actions arising from normal business activities - In January 2025, the Company resolved a lawsuit asserting claims for breach of contracts, which had an estimated liability of **$0.4 million** as of December 31, 2024[82](index=82&type=chunk) - The Company is involved in various unresolved legal actions, administrative proceedings, and claims in the ordinary course of business, but does not believe any would have a material adverse effect[83](index=83&type=chunk) [Note 14: Industry Segments](index=19&type=section&id=Note%2014:%20Industry%20Segments) This note identifies Specialty Chemicals as the Company's sole reportable segment, providing disaggregated financial information for this segment and corporate/other items, which are evaluated by the chief operating decision maker - Ascent Industries Co. has one reportable segment: Specialty Chemicals, which produces critical ingredients and process aids for various industries[84](index=84&type=chunk) Segment Performance (Three Months Ended June 30, 2025) (in thousands) | (in thousands) | Specialty Chemicals | Corporate & Other | Total Continuing Operations | | :--- | :--- | :--- | :--- | | Net sales | $18,652 | $— | $18,652 | | Gross profit | $4,187 | $679 | $4,866 | | Selling, general and administrative expense | $2,672 | $3,772 | $6,444 | | Net income (loss) | $1,499 | $(3,946) | $(2,447) | Segment Performance (Six Months Ended June 30, 2025) (in thousands) | (in thousands) | Specialty Chemicals | Corporate & Other | Total Continuing Operations | | :--- | :--- | :--- | :--- | | Net sales | $36,486 | $— | $36,486 | | Gross profit | $7,933 | $— | $7,933 | | Selling, general and administrative expense | $5,572 | $5,743 | $11,315 | | Net income (loss) | $2,237 | $(6,690) | $(4,453) | [Note 15: Subsequent Events](index=21&type=section&id=Note%2015:%20Subsequent%20Events) This note discloses the enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, which introduces changes to U.S. federal tax law, and states that the Company is currently evaluating its impact on future periods - The U.S. government enacted the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, which includes changes to U.S. federal tax law such as expensing R&D and capital expenditures, **100% bonus depreciation**, and increased CHIPS and Science Act investment tax credit[91](index=91&type=chunk) - The new law did not impact the Company's financial condition or results of operations during Q2 2025, and its impact on future periods is currently being evaluated[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive discussion and analysis of Ascent Industries Co.'s consolidated operating results, liquidity, and capital resources for the three and six months ended June 30, 2025 and 2024 - Ascent Industries Co. completed its transformation to a pure-play specialty chemicals platform with the divestitures of its final remaining operating tubular assets in ASTI and BRISMET during Q2 2025[95](index=95&type=chunk) - The discussion and analysis is structured into Executive Overview, Results of Operations and Non-GAAP Financial Measures, Liquidity and Capital Resources, Material Cash Requirements from Contractual and Other Obligations, and Critical Accounting Policies and Estimates[98](index=98&type=chunk) [Executive Overview](index=22&type=section&id=Executive%20Overview) - Ascent Industries Co. is a specialty chemicals platform focused on the development, production, and distribution of tailored, performance-driven chemical solutions[93](index=93&type=chunk) - The Company completed its transformation to a pure-play specialty chemicals platform with the divestitures of ASTI and BRISMET in Q2 2025[95](index=95&type=chunk) - The divestiture of ASTI generated approximately **$16 million** in cash proceeds and a preliminary, pretax gain on sale of **$4.6 million**[96](index=96&type=chunk) - The divestiture of BRISMET generated approximately **$45 million** in cash proceeds and a preliminary, pretax gain on sale of **$4.4 million**[97](index=97&type=chunk) [Macroeconomic Events](index=23&type=section&id=Macroeconomic%20Events) - The Company monitors macroeconomic trends such as key material inflation, tariffs, and potential new tariffs, working with suppliers to mitigate supply chain challenges and cost volatility[99](index=99&type=chunk) - Most raw materials are domestically sourced, and the Company does not expect these factors to result in a material negative effect on net sales or profitability for the remainder of fiscal year 2025[99](index=99&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Consolidated Performance Summary (Continuing Operations) (in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $18.7 | $21.5 | -13.1% | $36.5 | $41.8 | -12.6% | | Gross profit | $4.9 | $2.8 | +73.0% | $7.9 | $4.2 | +88.9% | | Gross profit (% of sales) | 26.1% | 13.1% | +13.0 pp | 21.7% | 10.1% | +11.6 pp | | SG&A expense | $6.4 | $4.6 | +39.1% | $11.3 | $10.5 | +7.6% | | SG&A expense (% of sales) | 34.5% | 21.4% | +13.1 pp | 31.0% | 25.1% | +5.9 pp | | Operating loss | $(2.7) | $(1.8) | +50.0% | $(4.7) | $(6.3) | -25.4% | - The decrease in net sales was primarily driven by a **29.6% decrease in pounds shipped** for Q2 2025 and a **27.4% decrease** for YTD 2025, partially offset by increases in average selling prices (**23.1% for Q2**, **19.2% for YTD**)[100](index=100&type=chunk)[101](index=101&type=chunk) - Gross profit increases were primarily attributable to continued sourcing improvements resulting in lower raw material costs and reductions in other production-related costs[102](index=102&type=chunk) Specialty Chemicals Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross profit | $4.2 | $2.9 | $7.9 | $4.5 | | Gross profit (% of sales) | 22.4% | 13.6% | 21.7% | 10.7% | | Operating income (loss) | $1.5 | $0.4 | $2.3 | $(1.0) | - Unallocated corporate and other expenses increased by **$0.9 million (39.4%)** to **$3.1 million** in Q2 2025 and by **$0.5 million (8.9%)** to **$5.7 million** in YTD 2025, primarily due to increases in salaries, wages, benefits, professional fees, taxes, and insurance expenses, partially offset by decreases in corporate allocation expense related to divestitures[110](index=110&type=chunk)[111](index=111&type=chunk) - The effective tax rate for continuing operations was **2.1%** for Q2 2025 and **2.0%** for YTD 2025, lower than the U.S. statutory rate of **21.0%** primarily due to the valuation allowance over federal and U.S. state deferred tax assets[113](index=113&type=chunk) [Non-GAAP Financial Measures](index=24&type=section&id=Non-GAAP%20Financial%20Measures) - The Company uses non-GAAP financial measures, **EBITDA** and **Adjusted EBITDA**, to supplement GAAP results, believing they are useful for evaluating operating performance and comparing financial results between periods[114](index=114&type=chunk)[115](index=115&type=chunk) Consolidated EBITDA and Adjusted EBITDA from Continuing Operations (in thousands) | ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss from continuing operations | $(2,447) | $(1,450) | $(4,453) | $(4,931) | | EBITDA | $(1,505) | $(586) | $(2,267) | $(3,816) | | Adjusted EBITDA | $(335) | $(283) | $(802) | $(3,430) | | Adjusted EBITDA (% of sales) | (1.8)% | (1.3)% | (2.2)% | (8.2)% | Specialty Chemicals EBITDA and Adjusted EBITDA (in thousands) | ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $1,499 | $409 | $2,237 | $(1,049) | | EBITDA | $2,545 | $1,572 | $4,415 | $1,256 | | Specialty Chemicals Adjusted EBITDA | $2,540 | $1,700 | $4,510 | $1,410 | | % of segment sales | 13.6% | 7.9% | 12.4% | 3.4% | [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the Company held **$60.5 million** in cash and cash equivalents and had **$13.4 million** of remaining available capacity on its revolving line of credit[118](index=118&type=chunk) Cash Flows from Continuing Operations (Six Months Ended June 30) (in thousands) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Operating activities | $(8,941) | $752 | | Investing activities | $(466) | $(458) | | Financing activities | $(7,473) | $87 | | Net decrease in cash and cash equivalents | $(16,880) | $381 | - The increase in cash used in operating activities for YTD 2025 was primarily driven by changes in working capital, including a **$4.9 million** decrease in cash generated by accounts receivable due to escrow receivables from divestitures[120](index=120&type=chunk) - Net cash used in financing activities increased primarily due to increased repurchases of common stock, with **660,993 shares** repurchased for **$8.06 million** YTD 2025[122](index=122&type=chunk)[128](index=128&type=chunk) - The Company has a **$1.1 million** note payable (**3.68% interest**, maturing April 1, 2026) and its credit facility's maximum revolving loan commitment was reduced to **$30 million**, with no debt outstanding under it as of June 30, 2025[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) Other Financial Measures | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 6.6 | 2.8 | | Return on average equity | (6.9)% | (34.0)% | [Material Cash Requirements from Contractual and Other Obligations](index=28&type=section&id=Material%20Cash%20Requirements%20from%20Contractual%20and%20Other%20Obligations) - As of June 30, 2025, operating and finance lease obligations totaled **$21.0 million**, with **$1.3 million** payable within 12 months[130](index=130&type=chunk) - The Company expects capital spending to be as much as **$2.1 million** for the remainder of fiscal 2025[130](index=130&type=chunk) - The Company has no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on its financial position[130](index=130&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no significant changes in the Company's significant accounting policies or critical accounting estimates since the end of fiscal 2024[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Ascent Industries Co. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and is therefore not required to provide information on quantitative and qualitative disclosures about market risk[132](index=132&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports that the Company's disclosure controls and procedures were not effective as of June 30, 2025, due to previously identified material weaknesses in internal control over financial reporting, primarily related to IT general controls - The Company's disclosure controls and procedures were not effective as of June 30, 2025, due to previously reported material weaknesses in internal control over financial reporting[133](index=133&type=chunk) - Material weaknesses, first identified in 2021 and 2022, remain unremediated as of June 30, 2025, due to continued ineffectiveness of IT general controls[134](index=134&type=chunk)[135](index=135&type=chunk) - Ongoing remediation efforts include enhancing corporate oversight, engaging external advisors for IT general controls, formalizing IT policies, enhancing review controls for financial processes, and improving inter-departmental communication[135](index=135&type=chunk)[136](index=136&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference information on legal proceedings from Note 13, indicating the Company's involvement in various unresolved legal actions, administrative proceedings, and claims in the ordinary course of business - Information pertaining to legal proceedings is incorporated by reference from Note 13 - Commitments and Contingencies[139](index=139&type=chunk) - The Company and its subsidiaries are involved in various unresolved legal actions, administrative proceedings, and claims in the ordinary course of business, including product liability, commercial, employment, workers' compensation, and environmental matters[139](index=139&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes in the Company's assessment of risk factors since its Annual Report on Form 10-K for the year ended December 31, 2024 - There were no material changes in the Company's assessment of risk factors as discussed in its Annual Report on Form 10-K for the year ended December 31, 2024[140](index=140&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides a table detailing the Company's common stock repurchases during the three months ended June 30, 2025, under its authorized share repurchase program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Number of Shares that May Yet Be Purchased under the Program | | :--- | :--- | :--- | :--- | :--- | | April 1, 2025 - April 30, 2025 | 54,543 | $12.79 | 54,543 | 929,380 | | May 1, 2025 - May 31, 2025 | 539,796 | $12.04 | 539,796 | 389,584 | | June 1, 2025 - June 30, 2025 | 49,832 | $12.70 | 49,832 | 339,752 | | As of June 30, 2025 | 644,171 | $12.15 | 644,171 | 339,752 | - A new share repurchase program was authorized on February 17, 2025, allowing for the repurchase of up to **1.0 million shares** of the Company's outstanding common stock, expiring in February 2027[142](index=142&type=chunk) [Item 3. Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[143](index=143&type=chunk) [Item 4. Mine Safety Disclosures](index=30&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - There are no mine safety disclosures[144](index=144&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) This section reports that no directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the three and six months ended June 30, 2025 - None of the Company's directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) during the three and six months ended June 30, 2025[145](index=145&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of this Quarterly Report on Form 10-Q, including various certifications and XBRL-related documents - Exhibits include Rule 13a-14(a)/15d-14(a) Certifications of the Chief Executive Officer and Chief Financial Officer, Certifications Pursuant to 18 U.S.C. Section 1350, and various XBRL Instance Documents[146](index=146&type=chunk) [Signatures](index=31&type=section&id=Signatures) This section contains the required signatures, certifying the filing of the report on behalf of Ascent Industries Co. by its President and Chief Executive Officer and Chief Financial Officer - The report is signed by J. Bryan Kitchen, President and Chief Executive Officer, and Ryan Kavalauskas, Chief Financial Officer, on August 6, 2025[150](index=150&type=chunk)[151](index=151&type=chunk)

[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=1.1.%20Second%20Quarter%202025%20Financial%20Highlights) The company reported decreased net sales but achieved significant gross profit and margin improvement in Q2 2025 Q2 2025 vs Q2 2024 Financial Summary (Continuing Operations) | (in millions, except per share and margin) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $18.7 | $21.5 | (13.0)% | | Gross Profit | $4.9 | $2.8 | 73.0% | | Gross Profit Margin | 26.1% | 13.1% | 1,298bps | | Net Loss | $(2.4) | $(1.5) | 60.0% | | Diluted Loss per Share | $(0.25) | $(0.14) | 78.6% | | Adjusted EBITDA | $(0.3) | $(0.3) | -$52K | | Adjusted EBITDA Margin | (1.8)% | (1.3)% | -50bps | - Financial results from BRISMET and ASTI have been categorized into discontinued operations due to recent sales[3](index=3&type=chunk) [Management Commentary & Strategic Overview](index=1&type=section&id=1.2.%20Management%20Commentary%20%26%20Strategic%20Overview) Management highlighted successful divestitures that transformed Ascent into a pure-play specialty chemicals company - Completed the sale of BRISMET in April and ASTI in June, transforming Ascent into a **pure-play specialty chemicals company**[4](index=4&type=chunk) - Gross margin improved to **26.1%** in Q2 2025, up **1,298 basis points** versus Q2 2024, driven by cost management, strategic sourcing, and product-line optimization[5](index=5&type=chunk) - Repurchased **644,171 shares** (approximately 6% of outstanding stock) in Q2 2025, returning cash directly to shareholders[5](index=5&type=chunk) [Financial Performance (Continuing Operations)](index=1&type=section&id=2.%20Financial%20Performance%20(Continuing%20Operations)) [Net Sales](index=1&type=section&id=2.1.%20Net%20Sales) Net sales from continuing operations decreased by 13.0% to $18.7 million in Q2 2025 due to lower volume Net Sales (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $18.7M | $21.5M | (13.0)% | - The decline in net sales was a result of lower volume partially offset by increased average selling prices[6](index=6&type=chunk) [Gross Profit and Margin](index=1&type=section&id=2.2.%20Gross%20Profit%20and%20Margin) Gross profit significantly increased by 73.0% to $4.9 million, with the margin expanding to 26.1% due to cost management Gross Profit and Margin (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | $4.9M | $2.8M | 73.0% | | Gross Profit Margin | 26.1% | 13.1% | 1,298bps | - The increase in gross profit was primarily driven by continued cost management, improved strategic sourcing, and continued product line optimization[7](index=7&type=chunk) [Net Loss and Diluted Loss Per Share](index=1&type=section&id=2.3.%20Net%20Loss%20and%20Diluted%20Loss%20Per%20Share) Net loss from continuing operations increased to $(2.4) million, influenced by a one-time asset impairment charge Net Loss and Diluted Loss per Share (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $(2.4)M | $(1.5)M | 60.0% | | Diluted Loss per Share | $(0.25) | $(0.14) | 78.6% | - Excluding a one-time asset impairment charge in the quarter, net loss from continuing operations decreased to **($0.8) million**[8](index=8&type=chunk) [Adjusted EBITDA](index=1&type=section&id=2.4.%20Adjusted%20EBITDA) Adjusted EBITDA from continuing operations remained flat at $(0.3) million, with the margin declining due to lower sales Adjusted EBITDA and Margin (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $(0.3)M | $(0.3)M | -$52K | | Adjusted EBITDA Margin | (1.8)% | (1.3)% | -50bps | - The decrease in Adjusted EBITDA margin was primarily driven by the aforementioned decline in sales in the quarter[9](index=9&type=chunk) [Business Transformation & Capital Allocation](index=3&type=section&id=3.%20Business%20Transformation%20%26%20Capital%20Allocation) [Divestitures of Discontinued Operations](index=3&type=section&id=3.1.%20Divestitures%20of%20Discontinued%20Operations) The company completed the sales of BRISMET and ASTI, finalizing its transformation into a specialty chemicals company - Sold substantially all assets of Bristol Metals, LLC (BRISMET) for **$45 million** in cash on April 4, 2025[10](index=10&type=chunk) - Sold substantially all assets of American Stainless Tubing, Inc (ASTI) for **$16 million** in cash on June 30, 2025[10](index=10&type=chunk) - As a result of these transactions, the company no longer has any operating tubular assets, transforming into a **pure-play specialty chemicals company**[4](index=4&type=chunk)[10](index=10&type=chunk) [Liquidity and Share Repurchase Program](index=3&type=section&id=3.2.%20Liquidity%20and%20Share%20Repurchase%20Program) The company maintained a strong liquidity position with $60.5 million in cash and repurchased $7.8 million of its stock Liquidity Position (as of June 30, 2025) | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $60.5 million | | Debt outstanding (revolving credit facilities) | $0 | | Availability (revolving credit facility) | $13.4 million | - Repurchased **644,171 shares** at an average cost of $12.15 per share for approximately **$7.8 million** in Q2 2025[11](index=11&type=chunk) [Corporate Information](index=3&type=section&id=4.%20Corporate%20Information) [About Ascent Industries Co.](index=3&type=section&id=4.1.%20About%20Ascent%20Industries%20Co.) Ascent Industries Co. is a specialty chemicals platform focused on performance-driven chemical solutions - Ascent Industries Co. is a specialty chemicals platform focused on the development, production, and distribution of tailored, performance-driven chemical solutions[14](index=14&type=chunk) [Non-GAAP Financial Measures Explanation](index=4&type=section&id=4.2.%20Non-GAAP%20Financial%20Measures%20Explanation) The report uses Adjusted EBITDA, a non-GAAP measure, to evaluate operating performance and enhance comparability - Adjusted EBITDA is a non-GAAP financial measure useful for evaluating results, generating future operating plans, and making strategic decisions[17](index=17&type=chunk)[18](index=18&type=chunk) - Adjusted EBITDA excludes base EBITDA components (interest expense, income taxes, depreciation and amortization) and material transaction costs (goodwill impairment, asset impairment, acquisition costs, stock-based compensation, etc)[17](index=17&type=chunk) [Forward-Looking Statements](index=3&type=section&id=4.3.%20Forward-Looking%20Statements) The report contains forward-looking statements that are subject to risks and uncertainties detailed in SEC filings - This press release may include forward-looking statements subject to certain risks and uncertainties which could cause actual results to differ materially[15](index=15&type=chunk) - Readers are cautioned not to place undue reliance on these statements and to review risks as set forth in Ascent Industries Co.'s SEC filings[15](index=15&type=chunk) [Conference Call Details](index=3&type=section&id=4.4.%20Conference%20Call%20Details) A conference call to discuss Q2 2025 financial results is scheduled for August 6, 2025, at 5:00 p.m. Eastern time - Ascent will hold a conference call on Wednesday, August 6, 2025, at 5:00 p.m. Eastern time to discuss its financial results for the second quarter ended June 30, 2025[12](index=12&type=chunk)[13](index=13&type=chunk) - Live Call Registration Link and Webcast Registration Link are provided for participation[13](index=13&type=chunk) [Company and Investor Relations Contacts](index=4&type=section&id=4.5.%20Company%20and%20Investor%20Relations%20Contacts) Contact information for the company's CFO and Investor Relations representatives is provided - Company Contact: Ryan Kavalauskas, Chief Financial Officer, 1-630-884-9181[19](index=19&type=chunk) - Investor Relations: Ralf Esper, Gateway Group, Inc., 1-949-574-3860, ACNT@gateway-grp.com[19](index=19&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=5.%20Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=5.1.%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects decreased total assets due to divestitures and a significant increase in cash and cash equivalents Key Balance Sheet Items (June 30, 2025 vs Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $122,580 | $147,250 | | Cash and cash equivalents | $60,479 | $16,098 | | Current assets of discontinued operations | $— | $47,841 | | Total Liabilities | $32,864 | $53,705 | | Total Shareholders' Equity | $89,716 | $93,545 | [Condensed Consolidated Statements of Income (Loss)](index=6&type=section&id=5.2.%20Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) The company reported a net income of $6.3 million for Q2 2025, driven by income from discontinued operations Key Income Statement Items (Three Months Ended June 30, 2025 vs 2024) | Metric (in thousands, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $18,652 | $21,468 | | Gross profit | $4,866 | $2,813 | | Operating loss from continuing operations | $(2,687) | $(1,843) | | Loss from continuing operations | $(2,447) | $(1,450) | | Income (loss) from discontinued operations, net of tax | $8,733 | $524 | | Net income (loss) | $6,286 | $(926) | | Diluted Net income (loss) per common share | $0.65 | $(0.09) | [Consolidated Statements of Cash Flows](index=7&type=section&id=5.3.%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from investing activities increased significantly due to divestiture proceeds, boosting total cash by $44.4 million Key Cash Flow Items (Six Months Ended June 30, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,096) | $2,430 | | Net cash provided by (used in) investing activities | $53,959 | $(770) | | Net cash (used in) provided by financing activities | $(7,492) | $84 | | Decrease in cash and cash equivalents | $44,371 | $1,744 | | Cash and cash equivalents, end of period | $60,479 | $3,595 | [Non-GAAP Financial Measures Reconciliation](index=8&type=section&id=5.4.%20Non-GAAP%20Financial%20Measures%20Reconciliation) The reconciliation details the calculation of Adjusted EBITDA, which was $(0.3) million for Q2 2025 from continuing operations Consolidated Adjusted EBITDA (Three Months Ended June 30, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss from continuing operations | $(2,447) | $(1,450) | | Adjusted EBITDA | $(335) | $(283) | | % sales | (1.8)% | (1.3)% | Specialty Chemicals Adjusted EBITDA (Three Months Ended June 30, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Specialty Chemicals Adjusted EBITDA | $2,540 | $1,700 | | % segment sales | 13.6% | 7.9% |

Group 1 - Ascent Industries Co. has transformed into a vertically integrated pure-play chemical firm after divesting its legacy metal businesses in 2025 [1] - The company now operates solely through its chemical segment, indicating a focused strategy on chemical production and services [1]

Financial Data and Key Metrics Changes - The company reported a quorum present for the transaction of business at the meeting, with 10,034,875 shares issued and outstanding [3] - The voting results indicated sufficient votes to elect directors and approve executive compensation, reflecting shareholder support [7] Business Line Data and Key Metrics Changes - No specific business line data or key metrics were discussed during the meeting [8] Market Data and Key Metrics Changes - No specific market data or key metrics were provided in the meeting [8] Company Strategy and Development Direction and Industry Competition - The company is focused on maintaining strong governance through the election of directors and the approval of executive compensation, which is crucial for strategic alignment and operational effectiveness [6][7] Management's Comments on Operating Environment and Future Outlook - Management cautioned that remarks may contain forward-looking statements involving risks and uncertainties, advising investors to consult the risk factors described in the annual report [8] Other Important Information - The appointment of Baker Tilley LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was ratified [6][7] Q&A Session All Questions and Answers Question: Are there any questions from the attendees? - There were no questions from the attendees during the meeting [9]

Company Overview - Ascent Industries Co is transitioning to a specialty chemicals platform, led by a proven management team[22, 26] - The company focuses on a customer-centric chemical supply chain model, integrating development, manufacturing, and distribution[26] - Ascent has strategic, growth-ready facilities and demonstrated ability to innovate and scale[28] Financial Performance & Transformation - In 2024, Ascent Industries Co achieved $80 million in revenue with $6.3 million adjusted EBITDA, representing a 7.8% EBITDA margin[30] - Adjusted EBITDA increased by 125% year-over-year[17] - Gross profit increased by 1,349% year-over-year[17] - Cost of goods sold (COGS) decreased by 19% year-over-year, a reduction of $35.9 million[18] - The company has approximately $55 million in cash on hand[29] Strategic Initiatives - Ascent Industries Co sold Bristol Metals, LLC for $45 million to Ta Chen International, Inc[23] - The company is focused on portfolio clean-up, organic growth, and inorganic growth through M&A[19] - Ascent Industries Co is targeting M&A opportunities with $5-150 million in revenue and $0-$25 million in EBITDA[38, 40]

Financial Data and Key Metrics Changes - Net sales from continuing operations totaled $24.7 million, down from $28 million in Q1 2024, reflecting broader market softness [4] - Adjusted EBITDA from continuing operations improved significantly, swinging from a loss of $2.7 million in the prior year to a positive $843,000 this quarter, marking a $3.5 million turnaround [5][20] - Gross profit nearly doubled to $4.8 million, or 19.3% of sales, compared to $2.3 million, or 8.3% last year, an expansion of over 1,100 basis points [17] Business Line Data and Key Metrics Changes - Tubular Segments generated $6.9 million in revenue, down slightly year over year, but gross margin increased from 12.3% to 24.8%, with adjusted EBITDA rising nearly five times to $1.3 million [6] - Specialty Chemicals segment revenue declined year over year to $17.8 million, but gross profit increased by $2.1 million, rising from $1.6 million to $3.7 million, a 131% improvement, with gross margin expanding from 7.6% to 21% [9] Market Data and Key Metrics Changes - Average daily trading volume increased to approximately 63,000 shares in Q1 2025, a 60% lift compared to Q1 2024, indicating growing market interest [13] Company Strategy and Development Direction - The company is focused on strategic repositioning, actively choosing to exit low-margin business in favor of higher value, more technically demanding opportunities [15][16] - The goal for the Specialty Chemicals segment is to shift from a 75% commodity and 25% blended mix to a 60% and 40% mix by the end of 2025, aiming for a more balanced portfolio [35] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are signs of improvement, demand remains soft, and they are still evaluating options to monetize the value of their assets [28][29] - The company is not ready to provide forward-looking guidance for 2025, as they are still stabilizing their operations [30][31] Other Important Information - The company ended the quarter with $14.3 million in cash and no debt before the divestiture of Bristol assets for $45 million, providing significant flexibility for capital deployment [21][22] - The company repurchased approximately 17,000 shares at an average price of $12.73, reinforcing confidence in intrinsic value and long-term fundamentals [21] Q&A Session Summary Question: Comments on the ASTI business and its attractiveness as a target - Management indicated that while there are additional looks due to tariffs, demand remains incredibly soft, and the market conditions have not materially changed [28] Question: Possibility of selling ASTI in 2025 - Management confirmed they are always evaluating options to monetize the value of all assets [29] Question: Guidance for profitability in chemicals - Management stated it is premature to provide guidance as they are still stabilizing operations [30][31] Question: Growth plans for chemicals by 2026 - Management expects to see some growth in the second half of the year, with a more compelling top line anticipated in 2026 [33] Question: Capacity and CapEx for growth - Management confirmed that growth can be achieved with existing capacity and minimal CapEx, with a run rate of $1 to $3 million per year [36] Question: Stock buyback limitations - Management explained that the buyback was executed within the confines of the existing program, and optionality has increased post-Bristol sale [37] Question: Perception of stock valuation - Management expressed the opinion that the stock remains undervalued at current levels [38]

Financial Data and Key Metrics Changes - Net sales from continuing operations totaled $24.7 million, down from $28 million in Q1 2024, reflecting broader market softness [4] - Adjusted EBITDA from continuing operations improved significantly, swinging from a loss of $2.7 million in the prior year to a positive $843,000 this quarter, a $3.5 million turnaround [5][21] - Gross profit nearly doubled to $4.8 million, or 19.3% of sales, compared to $2.3 million, or 8.3% last year, an expansion of over 1,100 basis points [17] Business Line Data and Key Metrics Changes - Tubular Segments generated $6.9 million in revenue, down slightly year over year, but gross margin increased from 12.3% to 24.8%, with adjusted EBITDA rising nearly five times to $1.3 million [6] - Specialty Chemicals segment revenue declined year over year to $17.8 million, but gross profit increased by $2.1 million, rising from $1.6 million to $3.7 million, a 131% improvement, with gross margin expanding from 7.6% to 21% [10] Market Data and Key Metrics Changes - Approximately 95% of revenue is supported by domestically sourced raw materials, providing a competitive advantage as tariffs loom [7] - Average daily trading volume increased to roughly 63,000 shares in Q1 2025, a 60% lift compared to Q1 2024, indicating growing market interest [14] Company Strategy and Development Direction - The company is focused on strategic repositioning, actively choosing to exit low-margin business in favor of higher value, technically demanding business [16] - The goal for the Specialty Chemicals segment is to grow from $80 million a year to $120 million by 2030, with growth expected to start in the second half of 2025 [34] Management's Comments on Operating Environment and Future Outlook - Management noted that while there has been some improvement in Q1, demand remains soft, and stabilization activities are still ongoing [30] - The company is committed to capital preservation and disciplined execution while evaluating capital deployment options post-divestiture [22] Other Important Information - The company ended the quarter with $14.3 million in cash and no debt before the divestiture of Bristol assets for $45 million, providing significant flexibility [22] - The company repurchased approximately 17,000 shares at an average price of $12.73, reinforcing confidence in intrinsic value and long-term fundamentals [22] Q&A Session Summary Question: Is the ornamental stainless domestic manufacturer a more attractive target now? - Management indicated that while there are additional looks due to tariffs, demand remains incredibly soft and has not materially changed [30] Question: Will guidance be provided for 2025? - Management stated that it is too premature to provide guidance as stabilization activities are still ongoing [32][33] Question: Is the growth plan for chemicals to reach $120 million by 2030? - Management confirmed that growth is expected to start in the second half of the year, leading to a more compelling top line in 2026 [34] Question: Can this growth be achieved with existing capacity and minimal CapEx? - Management affirmed that organic growth can be achieved with current capacity and a reasonable CapEx assumption of $1 to $3 million per year [37] Question: Is the stock still considered undervalued? - Management expressed a personal opinion that the stock is indeed undervalued at current levels [39]

Financial Performance - Consolidated net sales for Q1 2025 were $24.7 million, a decrease of $3.2 million, or 11.5%, compared to Q1 2024, primarily due to a 22.8% decrease in pounds shipped [90]. - Consolidated gross profit increased 105.5% to $4.8 million, or 19.3% of sales, compared to $2.3 million, or 8.3% of sales in Q1 2024, driven by lower raw material costs [91]. - Consolidated SG&A expenses decreased by $1.1 million to $5.6 million, or 22.5% of sales, compared to $6.7 million, or 23.9% of sales in Q1 2024 [92]. - Operating loss for Q1 2025 was $1.0 million, an improvement from an operating loss of $4.3 million in Q1 2024, due to increased gross profit and reduced SG&A expenses [93]. - Consolidated EBITDA for Q1 2025 was $543,000, compared to a negative EBITDA of $2.8 million in Q1 2024, with Adjusted EBITDA at $844,000 [106]. Segment Performance - Specialty Chemicals segment net sales decreased by $2.5 million, or 12.1%, to $17.8 million in Q1 2025, driven by a 24.8% decrease in pounds shipped [94]. - Tubular Products segment net sales totaled $6.9 million, a decrease of $0.8 million, or 9.9%, from Q1 2024, primarily due to a 5.9% decrease in pounds shipped [98]. Cash Flow and Liquidity - Cash flows from operating activities for Q1 2025 were negative $262,000, compared to positive cash flow of $584,000 in Q1 2024 [110]. - Operating cash flows decreased by $1.2 million in Q1 2025 compared to an increase of $3.8 million in Q1 2024, primarily due to inventory changes [111]. - Accounts payable increased operating cash flows by $1.5 million in Q1 2025, compared to $1.2 million in Q1 2024 [111]. - As of March 31, 2025, the company held $14.3 million in cash and cash equivalents and had $53.3 million of remaining available capacity on its revolving line of credit [109]. Investment and Financing Activities - The divestiture of Bristol Metals, LLC was completed on April 4, 2025, for approximately $45 million in cash proceeds [87]. - Net cash used in investing activities increased due to higher capital expenditures in Q1 2025 compared to Q1 2024 [112]. - Cash used in financing activities increased due to higher common stock repurchases in Q1 2025 [113]. - The company had no debt outstanding as of March 31, 2025, and December 31, 2024 [113]. Financial Ratios and Obligations - The current ratio decreased from 3.1 as of December 31, 2024, to 2.5 as of March 31, 2025 [119]. - Return on average equity improved from (25.8)% in Q4 2024 to (1.9)% in Q1 2025 [119]. - The company has $32.5 million in operating and finance lease obligations, with $1.9 million payable within 12 months [120]. - Capital spending is expected to be as much as $2.0 million for the remainder of fiscal 2025 [120]. - As of March 31, 2025, the company has 983,923 shares remaining under its share repurchase authorization [117].

Financial Performance - Net sales for Q1 2025 were $24.7 million, a decrease of 11.8% compared to $28.0 million in Q1 2024[3]. - Net sales for Q1 2025 were $24,732, a decrease of 11.3% from $27,952 in Q1 2024[27]. - Gross profit increased by 108.7% to $4.8 million, with a gross profit margin of 19.4%, up 1,120 basis points from 8.2% in Q1 2024[3][7]. - Net loss improved to $1.0 million, or a diluted loss per share of $0.10, compared to a net loss of $5.5 million, or $0.37 per share, in Q1 2024[3][8]. - Operating loss from continuing operations was $1,035 in Q1 2025, improved from a loss of $4,343 in Q1 2024[27]. - Net loss for Q1 2025 was $2,293, a reduction from a net loss of $5,493 in Q1 2024[28]. - Interest expense, net for Q1 2025 was $115, slightly down from $127 in Q1 2024[29]. Adjusted EBITDA - Adjusted EBITDA rose to $0.8 million from a loss of $2.7 million in Q1 2024, with an adjusted EBITDA margin of 3.4% compared to (9.6)% in the prior year[3][9]. - Adjusted EBITDA for Q1 2025 was $844, representing 3.4% of sales, compared to a negative 9.6% in Q1 2024[29]. - Specialty Chemicals segment reported an Adjusted EBITDA of $1,970, which is 11.0% of segment sales, compared to a negative 1.4% in Q1 2024[29]. - Tubular Products segment achieved an Adjusted EBITDA of $1,309, representing 19.0% of segment sales, up from 3.5% in Q1 2024[29]. - Ascent Chemicals segment net sales were $17.8 million, down 12.3% from $20.3 million in Q1 2024, but adjusted EBITDA increased to $2.0 million from a loss of $0.3 million[10][11]. - Ascent Tubular segment net sales were $6.9 million, down from $7.7 million in Q1 2024, with adjusted EBITDA increasing to $1.3 million from $0.3 million[12]. Cash and Debt Position - As of March 31, 2025, the company had $14.3 million in cash and cash equivalents, with no debt outstanding under its revolving credit facilities[14]. - Cash and cash equivalents at the end of Q1 2025 were $14,272, up from $1,299 at the end of Q1 2024[28]. - The company repurchased 16,822 shares at an average cost of $12.73 per share for approximately $0.2 million during the quarter[15]. Strategic Focus - Management emphasized a shift from stabilization to growth mode, focusing on high-quality organic growth opportunities[5]. - The company sold substantially all assets of Bristol Metals, LLC for $45 million in cash, impacting its financial results[13]. - The company incurred acquisition costs of $3 in Q1 2025, with no such costs reported in Q1 2024[27]. Share Information - Average shares outstanding remained stable at 10,076 for both basic and diluted shares in Q1 2025[27].