Core Insights - Ashland Inc. announced the retirement of Karl Bostaph, senior vice president of operations, effective October 1, 2025 [1] - Wayne Muil, global director of operations for specialty additives, will succeed Bostaph in the role of senior vice president of operations [3][4] Leadership Transition - Bostaph has been with the company since 1990, holding various roles in Research and Development, Quality, Engineering, and Manufacturing [2] - Muil joined Ashland in 2024 and has over 25 years of experience in the chemical industry, including leadership roles at Sadara Chemical Company [5][6] - Muil is recognized for his strategic vision and expertise in operational excellence, safety, and innovation across global production facilities [7] Company Overview - Ashland Inc. is a global additives and specialty ingredients company focused on environmental, social, and governance (ESG) initiatives [8] - The company serves diverse markets, including architectural coatings, construction, energy, food and beverage, personal care, and pharmaceuticals, with a workforce of approximately 2,960 employees [8]

Core Insights - Ashland Inc. is implementing a $60 million plan to optimize its manufacturing network, which includes closing its Parlin, NJ facility and relocating hydroxyethyl cellulose (HEC) production to Hopewell, VA [1][7] - The company aims to enhance operational efficiency, reduce production costs, and achieve HEC optimization targets on schedule through this transition [2][3] - Ashland has completed its portfolio optimization and a $30 million restructuring plan, which will accelerate cost savings and improve profitability [3][5] Manufacturing Network Changes - The closure of the Chatham, NJ site will also occur, with microbial protection production being transferred to Freetown, MA, consolidating smaller operations into larger, more efficient sites [2][7] - Investments have been made in the Hopewell facility to expand both capacity and capabilities, reinforcing Ashland's core technologies [4][5] Financial Performance and Market Position - The newly streamlined HEC production network is positioned to meet global demand, with operations in the United States, Europe, and China [5] - Ashland's shares have decreased by 41.4% over the past year, contrasting with a 3.7% rise in the industry [6]

Core Insights - Ashland Inc. is implementing a $60 million manufacturing network optimization plan to enhance operational consistency and profitability, which includes closing its Parlin, New Jersey facility and transferring hydroxyethyl cellulose (HEC) production to Hopewell, Virginia [1][2] - The company is also consolidating its microbial protection production from Chatham, New Jersey to Freetown, Massachusetts, aiming to improve cost efficiency across its manufacturing sites [1][2] - The optimization plan is expected to strengthen core technologies, including vinyl pyrrolidone and derivatives (VP&D) and HEC, with the Hopewell facility receiving increased investments to expand capacity [2][3] Manufacturing Strategy - The completion of the HEC plans is a vital component of Ashland's overall savings initiative, with the newly consolidated HEC network capable of supporting demand in the United States, Europe, and China [2] - Ashland is focused on identifying and accelerating productivity within its plant network to drive savings beyond the $60 million target [2][3] - The company emphasizes a strategic approach to innovation and organic growth, allowing for cost-effective repurposing of assets while maintaining operational efficiency [5] Investment and Growth - Significant investments have been made in various regions, including Ireland, the United States, Brazil, and China, to enhance capabilities in injectables, tablet coatings, and microbial protection [3] - Ashland is also in the process of building a tablet coating plant in India, further expanding its global footprint [3] - The company showcased new patented technologies during a recent Innovation Day, aimed at unlocking new markets with differentiated performance [4]

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]