Core Insights - Ashland is hosting an Innovation Day for analysts and investors on May 29, 2025, at its Bridgewater, New Jersey facility to showcase its enhanced technology platforms and commercial opportunities [1][2] - The event will include presentations from Ashland's executive and senior technology leaders, followed by a Q&A session and a lab tour for in-person attendees [2][3] Event Details - Registration is required for the event, with options for live webcast or in-person attendance [1] - Presentations will start at 9:00 a.m. ET and conclude around 11:30 a.m. ET, followed by a luncheon and lab tour until approximately 2:00 p.m. ET [2] - A replay of the event will be available within 24 hours and archived for 12 months on Ashland's website [2] Company Overview - Ashland Inc. is a global additives and specialty ingredients company focused on environmental, social, and governance (ESG) initiatives [3] - The company serves various markets, including architectural coatings, construction, energy, food and beverage, personal care, and pharmaceuticals, employing around 3,200 professionals [3]

Core Viewpoint - Ashland Global Holdings Inc. reported a significant decline in profits and sales for the second quarter of fiscal 2025, missing consensus estimates across various metrics [1][2][3]. Financial Performance - The company recorded a profit of $31 million or 65 cents per share, down from $120 million or $2.39 in the same quarter last year [1]. - Adjusted earnings were 99 cents, a decrease from $1.27 year-over-year, and below the Zacks Consensus Estimate of $1.10 [1]. - Total sales fell 16.7% year-over-year to $479 million, missing the Zacks Consensus Estimate of $508.8 million [2]. Segment Performance - **Life Sciences**: Sales decreased by 22.5% year-over-year to $172 million, below the consensus estimate of $177 million, primarily due to the divestiture of the Neutraceuticals division [2]. - **Personal Care**: Sales declined 13.6% year-over-year to $146 million, missing the consensus estimate of $162.3 million, mainly due to portfolio optimization [3]. - **Specialty Additives**: Sales fell 14.6% year-over-year to $134 million, also missing the consensus estimate of $141.1 million, attributed to portfolio optimization [3]. - **Intermediates**: Sales decreased 7.5% year-over-year to $37 million, slightly beating the consensus estimate of $36.3 million, with overall sales impacted by lower prices [4]. Financial Position - Cash and cash equivalents stood at $168 million at the end of the quarter, down approximately 23% sequentially [5]. - Long-term debt increased to $1,336 million, up roughly 2% compared to the previous quarter [5]. Outlook - For the full fiscal year, Ashland expects sales to range between $1.825 billion and $1.9 billion, with adjusted EBITDA projected at $400 million to $420 million [6]. Stock Performance - Ashland's shares have declined by 49% over the past year, contrasting with a 0.9% decline in the industry [7].

Core Points - Kevin Willis, the senior vice president and chief financial officer of Ashland Inc., will leave the company to pursue another opportunity, with his last day being May 16, 2025 [1][13] - William C. Whitaker has been appointed as the interim chief financial officer until the board completes its review process [3][14] - Samuel A. Richardson has been appointed as vice president, controller, and principal accounting officer [5] Summary by Sections Executive Changes - Kevin Willis has been with Ashland since 1987, serving in various management roles, and his departure is not due to any disagreements regarding financial statements or internal controls [2][13] - William C. Whitaker, who has been with Ashland since 2015 and currently serves as vice president of finance and director of investor relations, will take on the interim CFO role [4][14] - Samuel A. Richardson has been the controller since January 2020 and has held senior accounting roles since 2008 [5] Company Overview - Ashland Inc. is a global additives and specialty ingredients company focused on environmental, social, and governance (ESG) initiatives, serving various markets including construction, energy, and pharmaceuticals [6]

Financial Performance - Ashland's net income for the three months ended March 31, 2025, was $31 million, a decrease of $89 million compared to $120 million in the same period of 2024[152]. - Diluted earnings per share from continuing operations dropped to $0.63 for the three months ended March 31, 2025, down from $2.40 in the prior year, reflecting a decrease of $1.77[152]. - Ashland's adjusted EBITDA for the three months ended March 31, 2025, was $108 million, a decrease of $18 million compared to $126 million in the same period of 2024[152]. - Sales for the three months ended March 31, 2025, were $479 million, down $96 million from $575 million in the prior year, primarily due to divestitures and lower volume[158]. - The company recorded an impairment charge of $183 million for the six months ended March 31, 2025, primarily related to intangible assets and property[151]. - The net income for the three months ended March 31, 2025, was $31 million, down from $120 million in 2024, and the six-month net loss was $135 million compared to a profit of $147 million in 2024[203]. - Adjusted EBITDA for the three months ended March 31, 2025, was $108 million, compared to $126 million in 2024, and for the six months, it was $169 million versus $197 million in 2024[203]. Sales and Segment Performance - Sales generated outside of North America accounted for 72% of total sales for both the three and six months ended March 31, 2025, compared to 69% and 68% for the same periods in 2024[139]. - The Life Sciences segment contributed 35% to total consolidated sales for the three months ended March 31, 2025, down from 39% in the same period of 2024[140]. - Life Sciences segment sales decreased by $50 million (22.5%) to $172 million for the three months ended March 31, 2025, compared to $222 million in the same period of 2024[214]. - Personal Care segment sales decreased by $23 million (13.6%) to $146 million for the three months ended March 31, 2025, compared to $169 million in the same period of 2024[214]. - Specialty Additives segment sales decreased by $23 million (14.6%) to $134 million for the three months ended March 31, 2025, compared to $157 million in the same period of 2024[214]. Expenses and Cost Management - The cost of sales for the current quarter decreased by $82 million to $332 million compared to $414 million in the prior year, with gross profit as a percentage of sales increasing to 30.7% from 28.0%[160]. - Selling, general and administrative expenses decreased by $21 million to $85 million for the three months ended March 31, 2025, with expenses as a percentage of sales decreasing to 17.7%[162]. - Research and development expenses remained consistent at $14 million for the three months ended March 31, 2025, compared to the same period in 2024[164]. - Unallocated and other expenses decreased by $34 million, totaling $11 million in Q1 2025 compared to $45 million in Q1 2024[254]. - Environmental expenses for the current year were $3 million, down from $7 million in the prior year[258]. Restructuring and Impairments - Ashland initiated a $30 million pre-tax restructuring plan to offset impacts from the Nutraceuticals sale, expected to realize 50% of savings in fiscal 2025 and 50% in fiscal 2026[145]. - The company recorded a gain of $18 million from acquisitions and divestitures in Q1 2025, primarily related to the sale of the Avoca business[255]. - The company recorded a loss on divestiture of $165 million, primarily due to a $183 million impairment of the Avoca business[258]. Tax and Cash Flow - The effective tax rate for the three months ended March 31, 2025, was 23%, while the effective tax rate for the same period in 2024 was a benefit of 612%[184]. - Adjusted income from continuing operations before income taxes for the three months ended March 31, 2025, was $45 million, down from $59 million in 2024[184]. - Operating cash flows from continuing operations were outflows of $21 million for the six months ended March 31, 2025, compared to inflows of $255 million in the prior year[268]. - Free Cash Flow for the six months ended March 31, 2025 was $(65) million, a significant decrease from $185 million in 2024[268]. Market Conditions and Outlook - The ongoing Ukraine/Russia and Israel/Hamas conflicts continue to pose uncertainties that may materially impact Ashland's operations and supply chain[142]. - Reduced consumer sentiment due to global macroeconomic uncertainties is negatively impacting demand, especially for architectural coatings[289]. - The intermediates market continues to face a supply-demand imbalance, pressuring overall pricing[289]. - Full fiscal year sales are projected to be in the range of $1.825 billion to $1.9 billion, with adjusted EBITDA expected to be between $400 million and $420 million[292]. Capital Structure and Equity - Total debt increased to $1,386 million as of March 31, 2025, up from $1,349 million at September 30, 2024[274]. - The debt as a percent of capital employed rose to 35% as of March 31, 2025, compared to 32% at September 30, 2024[275]. - Total equity decreased by $309 million to $2,559 million at March 31, 2025, primarily due to a net loss of $135 million and stock repurchase activity[282]. - The company authorized a new $1 billion stock repurchase program, with $520 million remaining available as of March 31, 2025[283].

Financial Data and Key Metrics Changes - Q2 sales were $479 million, a 17% year-on-year decrease, including a $67 million impact from portfolio optimization, resulting in a 5% revenue decline excluding this impact [8][12] - Adjusted EBITDA was $108 million, down 14% year-over-year, with an organic decline of 4% [8][12] - Adjusted EPS, excluding acquisition amortization, was $0.99 per share, down 22% from the prior year [13] Business Line Data and Key Metrics Changes - Life Sciences sales declined 23% year-over-year to $172 million, primarily due to portfolio optimization initiatives [16] - Personal Care sales decreased by 14% year-over-year to $146 million, largely due to divestitures and low-margin product exits [21] - Specialty Additives sales fell by 15% to $134 million, with organic sales down 9% [26] Market Data and Key Metrics Changes - The demand environment was mixed, with slower trends than expected, particularly in Europe and the U.S. [7][43] - Intermediates generated $2 million in adjusted EBITDA, representing a 5.4% adjusted EBITDA margin, down from $12 million in the prior year [20] Company Strategy and Development Direction - The company is focused on achieving a $90 million cost savings target and has completed its restructuring efforts ahead of schedule [28] - Strategic priorities include enhancing financial performance through controllable factors and navigating the evolving tariff landscape [28][35] - The company aims for $100 million in incremental revenue from its Globalize and Innovate initiatives by fiscal year 2027 [31] Management's Comments on Operating Environment and Future Outlook - Management noted increasing economic uncertainty and anticipated softer consumer demand, prompting an adjustment to the fiscal year 2025 outlook [10][49] - The company expects flattish organic sales volume growth for the full fiscal year, with a positive inflection anticipated in the second half [45] - Management emphasized the importance of adapting and executing with discipline to navigate near-term challenges [10][50] Other Important Information - The company has over $700 million in liquidity and a manageable net leverage of 2.8 times, positioning it well to navigate the current environment [15] - The completion of portfolio optimization is expected to enhance long-term profitability despite short-term impacts [10][50] Q&A Session Summary Question: Order volatility and customer expectations - Management observed reduced volatility in orders over the last two quarters, with volumes picking up and pricing aligning with guidance [54][55] Question: Mitigation of risks related to U.S. produced China sales - Management indicated that over half of the risks could be mitigated through customer partnerships and production shifts, although some challenges remain [58][60] Question: Impact of delayed reciprocal tariffs on other regions - Management noted limited impact from tariffs outside of China, with most raw materials sourced regionally [67][68] Question: Competitive pressures in Specialty Additives - Management reported stable conditions in China, with pricing pressures continuing but manageable [71][72] Question: Cash flow expectations for the year - Management expects free cash flow to be in the range of $150 million to $200 million, depending on inventory and FX developments [91]

earnings conference call second quarter fiscal 2025 May 1, 2025 — Forward-Looking Statements — This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Ashland has identified some of these forward-looking statements with words such as "anticipates," "believes," "expects," "estimates," "is likely," "predicts," "projects," "forecasts," "objectives," "may," "will," "shoul ...

Financial Data and Key Metrics Changes - Q2 sales were $479 million, a 17% year-on-year decrease, including a $67 million impact from portfolio optimization. Excluding this, the revenue decline was 5% mainly due to lower carryover volumes and pricing [7][12] - Adjusted EBITDA was $108 million, down 14% year-over-year or 4% organically, partially offset by cost savings initiatives [7][13] - Adjusted EPS, excluding acquisition amortization, was $0.99 per share, down 22% from the prior year [14] Business Line Data and Key Metrics Changes - Life Sciences sales declined 23% year-over-year to $172 million, primarily due to portfolio optimization initiatives [16] - Personal Care sales decreased by 14% year-over-year to $146 million, largely due to divestitures and low-margin product exits [22] - Specialty Additives sales fell by 15% to $134 million, with organic sales down 9% due to soft demand and competitive pressures [28] Market Data and Key Metrics Changes - The demand environment was mixed, trending slower than expected, particularly in Europe and the U.S. [6][46] - The intermediates market faced challenges with persistent supply-demand imbalances, impacting pricing and margins [47] Company Strategy and Development Direction - The company is focused on achieving a $90 million cost savings target and has made significant progress on restructuring and manufacturing optimization [30][34] - Strategic priorities include enhancing financial performance through controllable factors and maintaining a disciplined capital allocation strategy [55] Management's Comments on Operating Environment and Future Outlook - Management noted increasing economic uncertainty and anticipated softer consumer demand, prompting adjustments to the fiscal year '25 outlook [11][52] - The company expects flattish organic sales volume growth for the full fiscal year, with a positive inflection anticipated in the second half led by Life Sciences [48] Other Important Information - The company has a strong financial foundation with over $700 million in liquidity and a manageable net leverage of 2.8 times [15] - The completion of portfolio optimization is expected to enhance long-term profitability and focus [30] Q&A Session Summary Question: Order volatility and customer stability - Management noted reduced volatility in orders, with volumes picking up and pricing aligning with guidance, but sentiment in certain markets remains impacted [58][60] Question: Mitigation of U.S. produced China sales risk - Management indicated that over half of the risk could be mitigated through customer partnerships and production shifts, although some challenges remain [62][66] Question: Impact of reciprocal tariffs on supply chains - Management stated that outside of China, the impact of tariffs is minimal, with most raw materials sourced regionally [72][74] Question: Competitive pressures in Specialty Additives - Management observed stability in China, with no further declines in volumes or prices, while Europe remains flattish [78][80] Question: Cash flow expectations for the year - Management expects free cash flow to be in the range of $150 million to $200 million, depending on inventory and FX developments [94][96]

Core Insights - Ashland reported revenue of $479 million for the quarter ended March 2025, a decrease of 16.7% year-over-year, and EPS of $0.99, down from $1.27 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $508.82 million by 5.86%, and the EPS was also below the consensus estimate of $1.10 by 10% [1] Revenue Performance - Life Sciences revenue was $172 million, below the estimated $177.02 million, reflecting a year-over-year decline of 22.5% [4] - Intermediates revenue reached $37 million, slightly above the estimated $36.38 million, but still down 7.5% from the previous year [4] - Specialty Additives revenue was $134 million, compared to the average estimate of $141.10 million, marking a 14.7% decrease year-over-year [4] - Personal Care revenue was $146 million, below the estimated $162.83 million, representing a year-over-year decline of 13.6% [4] Adjusted EBITDA Performance - Adjusted EBITDA for Life Sciences was $56 million, exceeding the estimate of $53.75 million [4] - Adjusted EBITDA for Intermediates was $2 million, significantly below the estimate of $6.15 million [4] - Adjusted EBITDA for Specialty Additives was $26 million, slightly above the estimate of $25.22 million [4] - Adjusted EBITDA for Personal Care was $44 million, below the average estimate of $46.25 million [4] Stock Performance - Ashland's shares have returned -7.4% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Ashland's quarterly earnings of $0.99 per share missed the Zacks Consensus Estimate of $1.10, representing a 10% earnings surprise and a decline from $1.27 per share a year ago [1][2] Financial Performance - The company reported revenues of $479 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 5.86% and down from $575 million year-over-year [2] - Over the last four quarters, Ashland has surpassed consensus EPS estimates two times and topped revenue estimates just once [2] Stock Performance - Ashland shares have declined approximately 25.2% since the beginning of the year, compared to a 5.5% decline in the S&P 500 [3] Future Outlook - The company's earnings outlook will be crucial for stock price movement, with current consensus EPS estimates at $1.39 for the coming quarter and $4.12 for the current fiscal year [7] - The Zacks Rank for Ashland is currently 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Chemical - Specialty industry, to which Ashland belongs, is currently in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Second-quarter sales were $479 million, a decrease of 17% from $575 million in the prior year, with Portfolio Optimization initiatives reducing sales by approximately $67 million or 12%[5] - Income from continuing operations was $30 million, or $0.63 per diluted share, down from $121 million, or $2.40 per diluted share, in the prior year[7] - Adjusted EBITDA was $108 million, a 14% decrease from $126 million in the prior year, primarily due to the impact of Portfolio Optimization and lower organic sales[7] - The net income for the three months ended March 31, 2025, was $31 million, a decrease from $120 million in the same period last year[44] - Adjusted diluted earnings per share for the three months ended March 31, 2025, was $0.63, down from $2.40 in the prior year[44] - Net income for Q2 2025 was $31 million, down from $120 million in Q2 2024, with a net loss of $(135) million for the six months ended March 31, 2025, compared to $147 million in 2024[51] - Adjusted EBITDA for Q2 2025 was $108 million, compared to $126 million in Q2 2024, and $169 million for the six months ended March 31, 2025, down from $197 million in 2024[54] - Adjusted Operating Income for Q2 2025 was $60 million, compared to $72 million in Q2 2024, with $71 million for the six months ended March 31, 2025, down from $90 million in 2024[54] Segment Performance - Life Sciences segment sales totaled $172 million, a 23% decrease compared to the prior year, primarily driven by the divestiture of the Nutraceuticals segment[11] - Personal Care segment sales were $146 million, a 14% decrease from $169 million in the prior year, with Portfolio Optimization reducing sales by approximately $15 million or 9%[14] - Specialty Additives segment sales were $134 million, a 15% decrease from $157 million in the prior year, with Portfolio Optimization reducing sales by approximately $10 million or 6%[16] - The Life Sciences segment generated sales of $172 million, a decrease of 22.5% from $222 million year-over-year[44] - The Specialty Additives segment reported an operating loss of $7 million for the three months ended March 31, 2025, compared to an operating loss of $18 million in the same period last year[44] Cash Flow and Liquidity - Cash flows from operating activities were $9 million, a decrease from $54 million in the prior-year quarter, reflecting lower earnings and trade working capital fluctuations[9] - Ashland's free cash flow metrics indicate ongoing cash generation available for debt and equity holders, reflecting the company's liquidity position[34] - Operating cash flows from continuing operations for the six months ended March 31, 2025, were negative at $(113) million, compared to positive cash flows of $47 million in the prior year[47] - Free Cash Flows for Q2 2025 were $(12) million, compared to $20 million in Q2 2024, and $(65) million for the six months ended March 31, 2025, compared to $185 million in the same period of 2024[51] - Operating Cash Flow Conversion for Q2 2025 was 29%, down from 45% in Q2 2024, with a significant increase to 173% for the six months ended March 31, 2025, compared to 36% in 2024[51] - Ongoing Free Cash Flow Conversion for Q2 2025 was -6%, compared to 3% in Q2 2024, with -20% for the six months ended March 31, 2025, compared to 36% in 2024[51] Balance Sheet and Assets - Total assets decreased from $5,645 million on September 30, 2024, to $5,233 million on March 31, 2025, representing a decline of approximately 7.3%[46] - Cash and cash equivalents decreased from $300 million on September 30, 2024, to $168 million on March 31, 2025, a decline of 44%[46] - Total current liabilities decreased slightly from $490 million to $463 million, a reduction of about 5.5%[46] - Long-term debt remained relatively stable, decreasing slightly from $1,349 million to $1,336 million[46] Future Outlook - Ashland anticipates full fiscal year sales in the range of $1.825 billion to $1.9 billion and adjusted EBITDA in the range of $400 million to $420 million[26] - The company expects flattish organic sales volume growth for the full fiscal year, with a positive inflection anticipated in the second half, led by Life Sciences[24] - The company anticipates a moderate recovery in European markets, which have stabilized at a low level, but has not yet materialized[30] - Ashland is focused on cost reduction and manufacturing optimization initiatives to drive sustainable growth and create long-term value[39] Tax and Other Items - The tax rate for the three and six months ended March 31, 2025, was 21%, compared to 20% for the same periods in 2024[60] - Key items before tax for Q2 2025 included an Avoca impairment and sale of $(8) million and restructuring costs of $8 million[54]