Core Points - Ashland Inc. plans to release its third-quarter fiscal 2025 earnings on July 29, 2025, at approximately 5 p.m. ET [1] - A live webcast with securities analysts will occur on July 30, 2025, at 10 a.m. ET, featuring an executive summary and detailed remarks [1] - The webcast and supporting materials will be available on Ashland's Investor Relations website, with an archived version accessible for 12 months post-event [3] Company Overview - Ashland Inc. is a global additives and specialty ingredients company focused on environmental, social, and governance (ESG) initiatives [4] - The company serves various markets, including architectural coatings, construction, energy, food and beverage, personal care, and pharmaceuticals [4] - Ashland employs approximately 2,960 professionals, including scientists, research chemists, engineers, and plant operators, dedicated to providing innovative solutions [4]

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]

Q2 FY25 Performance - Sales decreased by 17% to $479 million compared to Q2 FY24, but decreased by 5% compared to Q2 FY24 reset[10, 19] - Adjusted EBITDA decreased by 14% to $108 million compared to Q2 FY24, but decreased by 4% to $113 million compared to Q2 FY24 reset[10, 19] - Adjusted EBITDA margin increased by 60 bps to 22.5% compared to Q2 FY24, and increased by 30 bps to 22.2% compared to Q2 FY24 reset[10, 19] - Adjusted EPS decreased by 22% to $0.99 compared to Q2 FY24[10] Business Unit Performance (Sales Change vs Prior Year) - Life Sciences sales decreased by 23% to $172 million, but decreased by 4% to $180 million compared to Q2 FY24 reset[14, 20] - Personal Care sales decreased by 14% to $146 million, but decreased by 5% to $154 million compared to Q2 FY24 reset[14, 27] - Specialty Additives sales decreased by 15% to $134 million, but decreased by 9% to $147 million compared to Q2 FY24 reset[14, 30] - Intermediates sales decreased by 8% to $37 million[23] Strategic Priorities and Outlook - The company is executing initiatives to deliver approximately $90 million in savings through FY27[34, 35] - The company anticipates a $3 to $5 million headwind in 2H from tariffs, and $5 to $7 million annually[44] - FY25 sales outlook is revised to $1.825 - $1.9 billion, and adjusted EBITDA outlook is $400 - $420 million[49]