earnings conference call first quarter fiscal 2025 January 29, 2025 Forward-Looking Statements This presentation contains for ward-looking storements within the meaning of Section 274 of the Securities Ach of 1933, as amended and Section 21E of the Securities Exchang 994, as amended. Ashland has identified some of these forward-looking statements with words such as "anticipates," "expects," estimates," "is likely," "predicts", fprojects, "forecasts," "dajectives," "mory" "will," "will," "will," "plans" and ...

Financial Performance - Sales for the three months ended December 31, 2024, were $405 million, a decrease of 14.4% from $473 million in the same period of 2023[7]. - Gross profit increased to $111 million, up 13.3% from $98 million year-over-year[7]. - Operating loss for the quarter was $179 million, compared to an operating loss of $18 million in the prior year[7]. - Net income loss was $165 million, a significant decline from a net income of $26 million in the same quarter of 2023[7]. - Basic earnings per share from continuing operations was $(3.51), compared to $0.54 in the same period last year[7]. - Adjusted EBITDA for the three months ended December 31, 2024, was $61 million, down from $70 million in the same period of 2023, reflecting a $9 million decrease primarily due to portfolio optimization actions[154]. - For the three months ended December 31, 2024, Ashland reported a net loss of $165 million compared to a net income of $26 million in the same period of 2023[188]. - The diluted EPS from continuing operations was $(3.51) for the three months ended December 31, 2024, compared to $0.54 in the prior year[191]. Asset and Liability Management - Total assets decreased to $5,231 million from $5,645 million as of September 30, 2024[8]. - Cash and cash equivalents at the end of the period were $219 million, down from $300 million at the beginning of the period[10]. - As of December 31, 2024, Ashland's long-term debt was $1,313 million, a decrease from $1,349 million as of September 30, 2024[54]. - The total allowance for credit losses was $1 million at both December 31, 2024, and September 30, 2024[97]. - Ashland's restricted investments totaled $350 million as of December 31, 2024, with $73 million classified within other current assets[41]. Impairments and Restructuring - An impairment charge of $183 million was recorded related to the Avoca business, impacting the loss on acquisitions and divestitures[22]. - The company initiated a restructuring plan in fiscal 2025 to offset the impact from the sale of the Nutraceuticals business, which was completed in fiscal 2024[29]. - The company reported an impairment charge of $183 million related to the Avoca business for the three months ended December 31, 2024[133]. - Ashland initiated a $30 million restructuring plan to offset impacts from the Nutraceuticals sale, with expected realization of 50% in fiscal 2025 and 50% in fiscal 2026[143]. Segment Performance - Life Sciences segment sales decreased to $134 million from $200 million, representing a decline of 33%[132]. - Personal Care segment sales increased slightly to $134 million from $129 million, a growth of 3.9%[132]. - Specialty Additives segment sales decreased to $115 million from $122 million, a decline of 5.7%[132]. - Operating income for Life Sciences was $14 million, down from $32 million, a decrease of 56.3%[132]. - Life Sciences reported a decrease in operating income to $14 million for the three months ended December 31, 2024, down from $32 million in the same period of 2023, representing a change of $(18) million[204]. Tax and Regulatory Matters - The effective tax rate for the three months ended December 31, 2024, was 21%, influenced by jurisdictional income mix and a net $8 million from unfavorable tax discrete items[68]. - The overall effective tax rate for the three months ended December 31, 2023, was a benefit of 600%, influenced by jurisdictional income mix and net favorable tax discrete items of $24 million[70]. - As of December 31, 2024, the balance of unrecognized tax benefits was $64 million, with a decrease of $2 million related to prior years and an increase of $1 million for the current year[72]. Environmental and Legal Reserves - Total reserves for asbestos claims were $264 million as of December 31, 2024, reflecting an increase of $24 million during fiscal 2024[83]. - Ashland's asbestos-related litigation reserves are currently estimated at $264 million, with potential future costs ranging up to approximately $410 million, depending on various assumptions[99]. - The total reserves for environmental remediation decreased from $221 million at September 30, 2024, to $216 million at December 31, 2024, reflecting disbursements of $6 million and revised obligation estimates of $1 million[102][103]. Market and Operational Challenges - The company anticipates challenges due to ongoing geopolitical conflicts affecting supply chains and market conditions[134]. - Total sales for the current quarter decreased by $68 million to $405 million, driven by divestitures, lower volume, unfavorable pricing, and foreign currency exchange impacts[156]. - The decline in sales, operating income, and EBITDA was attributed to lower volume, portfolio optimization activities, divestiture of the Nutraceuticals business, unfavorable pricing, and foreign currency exchange impacts[205]. Stock and Dividends - The company has a stock repurchase program with $620 million remaining available for repurchase as of December 31, 2024, following the authorization of a new $1 billion program in June 2023[110]. - Dividends paid in the first quarter of fiscal 2025 were $0.405 per share, an increase from $0.385 per share in the first quarter of fiscal 2024[112].

Core Insights - Ashland reported revenue of $405 million for the quarter ended December 2024, a decrease of 14.4% year-over-year, and EPS of $0.28, down from $0.45 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $433.23 million, resulting in a surprise of -6.52%, while the EPS exceeded the consensus estimate of $0.20 by 40% [1] Revenue Performance - Revenue from Intermediates was $33 million, slightly below the estimated $34.30 million, showing no change from the previous year [4] - Revenue from Specialty Additives was $115 million, slightly below the estimated $115.26 million, reflecting a decline of 5.7% year-over-year [4] - Revenue from Personal Care reached $134 million, slightly above the estimated $133.90 million, marking an increase of 3.9% compared to the previous year [4] - Revenue from Life Sciences was $134 million, significantly below the estimated $160.78 million, representing a year-over-year decline of 33% [4] Adjusted EBITDA Performance - Adjusted EBITDA for Life Sciences was $28 million, below the estimated $37.61 million [4] - Adjusted EBITDA for Intermediates was $6 million, slightly below the estimated $6.63 million [4] - Adjusted EBITDA for Specialty Additives was $13 million, exceeding the estimated $7.58 million [4] - Adjusted EBITDA for Personal Care was $30 million, surpassing the average estimate of $22.97 million [4] Stock Performance - Ashland's shares returned +0.3% over the past month, compared to a +0.8% 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 (ASH) reported quarterly earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.20 per share, but down from $0.45 per share a year ago, indicating a 40% earnings surprise [1][2] Financial Performance - The company posted revenues of $405 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 6.52% and down from $473 million year-over-year [2] - Over the last four quarters, Ashland has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - Ashland shares have declined approximately 0.5% since the beginning of the year, while the S&P 500 has gained 2.2% [3] - The current consensus EPS estimate for the upcoming quarter is $1.29 on revenues of $515.77 million, and for the current fiscal year, it is $4.31 on revenues of $1.95 billion [7] Industry Context - The Chemical - Specialty industry, to which Ashland belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the outlook for the industry can materially affect stock performance [5][8]

Financial Performance - First quarter sales were $405 million, down 14% from $473 million in the prior-year quarter, with Portfolio Optimization reducing sales by approximately $50 million or 11%[3] - Loss from continuing operations was $166 million, or a loss of $3.51 per diluted share, compared to income of $28 million in the prior-year quarter[5] - Adjusted EBITDA was $61 million, down 13% from $70 million in the prior-year quarter, primarily driven by Portfolio Optimization and increased expenses[5] - Life Sciences sales declined 33% year-over-year to $134 million, primarily due to Portfolio Optimization and reduced pharma sales volumes[9] - Personal Care sales increased 4% year-over-year to $134 million, with a 6% increase excluding Portfolio Optimization impacts[12] - Specialty Additives sales were $115 million, down 6% from the prior-year quarter, primarily due to Portfolio Optimization[14] - Adjusted operating income for Personal Care was $12 million, compared to $2 million in the prior-year quarter, reflecting strong performance[13] - Ashland reported a net loss of $165 million for the three months ended December 31, 2024, compared to a net income of $26 million in the same period of 2023[40] - The diluted earnings per share from continuing operations was $(3.51) for Q4 2024, a significant decline from $0.54 in Q4 2023[40] - Total sales decreased by 14.4% to $405 million in Q4 2024, down from $473 million in Q4 2023[40] - Operating loss for the quarter was $(179) million, compared to an operating loss of $(18) million in the prior year[40] - Adjusted EBITDA for Ashland Inc. was $61 million in Q4 2024, down 13% from $70 million in Q4 2023[44] - The Life Sciences segment's adjusted EBITDA decreased to $28 million in Q4 2024 from $48 million in Q4 2023, reflecting a 42% decline[44] - The Personal Care segment saw an increase in adjusted EBITDA to $30 million in Q4 2024, up from $22 million in Q4 2023, marking a 36% growth[44] - Specialty Additives reported an adjusted EBITDA of $13 million in Q4 2024, compared to $6 million in Q4 2023, representing a 117% increase[44] Cash Flow and Assets - Cash flows used by operating activities totaled $30 million, compared to cash flows provided of $201 million in the prior-year quarter[7] - Cash and cash equivalents decreased to $219 million at the end of Q4 2024, down from $300 million at the end of Q3 2024[41] - Total assets decreased to $5.231 billion as of December 31, 2024, from $5.645 billion as of September 30, 2024[41] - Free cash flows for Ashland Inc. were negative $53 million in Q4 2024, a significant decline from positive $165 million in Q4 2023[48] - Operating cash flow conversion was 18% in Q4 2024, a sharp decrease from 773% in Q4 2023[48] - Ashland's total liabilities decreased to $2.639 billion as of December 31, 2024, from $2.777 billion as of September 30, 2024[41] Strategic Initiatives - The company signed a definitive agreement to sell its Avoca business, part of its portfolio optimization strategy[3] - The company plans to focus on restructuring and optimization efforts to improve future performance[46] Key Items and Adjustments - The company incurred a loss of $183 million on acquisitions and divestitures in Q4 2024, compared to a loss of $2 million in the same quarter of the previous year[40] - The company incurred key items totaling $208 million before tax, including an Avoca impairment of $183 million[53] - Adjusted operating income (non-GAAP) for Q4 2024 was $11 million, down from $16 million in Q4 2023[51] - Total key items after tax amounted to $3.50 million in Q4 2024, compared to $(0.42) million in Q4 2023[57] - Key items before tax included an Avoca impairment of $3.89 million in Q4 2024, with no equivalent in Q4 2023[57] - The tax effect of key items was $(1.07) million in Q4 2024, compared to $(0.02) million in Q4 2023[57] - Amortization expense adjustment (net of tax) was $0.29 million for Q4 2024, slightly down from $0.33 million in Q4 2023[57] - Uncertain tax positions contributed $0.02 million to key items in Q4 2024, with no contribution in Q4 2023[57] - Other and tax reform related activity resulted in a $0.15 million impact in Q4 2024, compared to a $(0.47) million impact in Q4 2023[57] - Adjusted Diluted EPS from Continuing Operations (excluding intangibles amortization expense) was $0.28 million in Q4 2024, down from $0.45 million in Q4 2023[57]

Sales of $405 million, down 14 percent from the prior-year quarterPreviously announced carboxymethylcellulose (CMC), methylcellulose (MC) and nutraceuticals portfolio optimization initiatives (collectively, "Portfolio Optimization") reduced overall sales by approximately $50 million or 11 percent versus the prior-year quarter. Excluding Portfolio Optimization, sales declined 3 percent versus prior-year quarterLoss from continuing operations of $166 million, or loss of $3.51 per diluted shareAdjusted income ...

Analysts on Wall Street project that Ashland (ASH) will announce quarterly earnings of $0.20 per share in its forthcoming report, representing a decline of 55.6% year over year. Revenues are projected to reach $439.38 million, declining 7.1% from the same quarter last year.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 5.9% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Befo ...

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Wall Street expects a year-over-year decline in earnings on lower revenues when Ashland (ASH) reports results for the quarter ended December 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on January 28, 2025, might help the stock move higher if these key numbers are better than expecta ...

Ashland Inc (ASH) is a Zacks Rank #5 (Strong Sell) after the company missed the Zacks Consensus Estimate when the last reported. The company is in the specialty chemicals space and services many industries such as the automotive and construction sectors. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.Description                        Ashland, Inc. is an additives and specialty ingredients company, which engages in the provision of architectural coatin ...