Nov 20, 2025 4:30 PM Eastern Standard Time Element Solutions Inc Announces Participation in December Conferences Share MIAMI--(BUSINESS WIRE)--Element Solutions Inc (NYSE:ESI) announced today that Benjamin Gliklich, Chief Executive Officer, will participate in two investor events in December 2025: Dial-in details for the fireside chats and copies of any slides related to the presentations will be made available in the Investors section of www.elementsolutionsinc.com closer to the events. About Element Solut ...

Nov 20, 2025 3:32 PM Eastern Standard Time Element Solutions Inc Announces Pricing and Preliminary Syndication of Add-On to Existing Term Loan B Share The Add-on remains subject to certain closing conditions, including the finalization and execution of definitive documentation. ESI intends to use the funds from the Add-on and cash on hand to finance the Micromax acquisition, which is expected to close in the first quarter of 2026, subject to certain regulatory approvals and customary closing conditions. Abo ...

Core Viewpoint - The Zacks Chemicals Specialty industry is currently facing significant challenges due to demand weakness, particularly in Europe and China, alongside elevated costs impacting margins [1][4][5]. Industry Overview - The Zacks Chemicals Specialty industry includes manufacturers of specialty chemical products used across various sectors such as textiles, automotive, electronics, and agriculture [3]. - Specialty chemicals are critical for the performance of end products, influencing manufacturing processes in paints, cosmetics, and plastics [3]. Demand Weakness - Demand is softening in the building, construction, and industrial markets, primarily due to economic slowdowns in Europe and China [4]. - High inflation and borrowing costs are negatively affecting the residential construction sector, while manufacturing activities are declining due to reduced consumer demand [4]. - Geopolitical tensions and low consumer confidence in Europe are further dampening demand, with lingering impacts from customer inventory de-stocking expected to persist [4]. Cost Pressures - Specialty chemical manufacturers are grappling with inflation in raw material and energy costs, alongside supply chain disruptions [5]. - Although raw material costs have recently moderated, they remain elevated compared to pre-pandemic levels, with tariffs contributing to increased production expenses [5]. Self-Help Measures - Companies are implementing various self-help strategies, including cost-cutting, productivity improvements, and expansion into high-growth markets to navigate the challenging environment [6]. - These measures aim to enhance operational efficiency and strengthen balance sheets, which are crucial for sustaining performance amid ongoing headwinds [6]. Industry Performance - The Zacks Chemicals Specialty industry has underperformed compared to the S&P 500 and the broader Zacks Basic Materials sector, declining by 10% over the past year [10]. - The industry's current valuation, based on the trailing 12-month EV/EBITDA ratio, stands at 11.26X, which is below the S&P 500's 18.6X and the sector's 13.35X [13]. Company Highlights - **Perimeter Solutions**: Focused on fire safety and specialty products, expected to benefit from recovering end markets and has a strong balance sheet for growth investments [18][19]. - **Element Solutions**: Positioned for growth in the electronics sector, benefiting from strong organic growth and improved margins due to lower raw material costs [22][23]. - **Flexible Solutions**: Specializes in biodegradable products and has an expected earnings growth rate of 20.8% for 2025, with a focus on expanding its market presence [25][27].

Core Viewpoint - EFC Gases & Advanced Materials has entered into a definitive agreement to be acquired by Element Solutions Inc., with the transaction expected to close by the end of 2025, pending regulatory approvals and customary closing conditions [1]. Group 1: Company Overview - EFC is recognized for its technical precision, product purity, and strong customer partnerships across demanding industries such as semiconductor manufacturing, aerospace, and electrical infrastructure [3]. - The company focuses on continuous investment in purification, analytical capabilities, and sustainable rare gas recovery systems, positioning itself as a trusted partner in advancing modern technologies [3][6]. Group 2: Strategic Implications of the Acquisition - The acquisition is seen as a new chapter for EFC, with both companies sharing a commitment to innovation, safety, and sustainability, which will enhance EFC's ability to serve customers with an expanded portfolio of high-value materials [4]. - Post-acquisition, EFC will operate under its existing name as a distinct business within Element Solutions, maintaining its facilities and customer relationships while leveraging Element's global infrastructure for accelerated growth [4][5]. Group 3: Leadership Perspectives - EFC's President and CEO, Pavel A. Perlov, emphasized that joining Element Solutions strengthens EFC's foundation for long-term growth and enhances value delivery to customers, employees, and partners [5]. - Element Solutions' CEO, Benjamin Gliklich, highlighted EFC's exceptional business model and its focus on collaboration and quality, which has driven impressive growth [4]. Group 4: Advisory and Legal Support - EFC was advised by Baird as its exclusive financial advisor during the transaction, receiving strategic guidance throughout the process, while Latham & Watkins LLP served as legal counsel [5].

Financial Performance - Net sales for Q3 2025 reached $656.1 million, a 1.7% increase from $645.0 million in Q3 2024[15] - Gross profit for Q3 2025 was $277.0 million, compared to $267.5 million in Q3 2024, reflecting a gross margin improvement[15] - Operating profit for the nine months ended September 30, 2025, was $272.5 million, up from $269.0 million in the same period of 2024[15] - Net income for Q3 2025 was $39.3 million, slightly down from $40.4 million in Q3 2024[17] - Net income for the nine months ended September 30, 2025, was $184.8 million, a decrease of 2.5% from $189.7 million in 2024[21] - Comprehensive income for the nine months ended September 30, 2025, was $332.3 million, significantly higher than $163.5 million in the same period of 2024[17] - Adjusted EBITDA for the three months ended September 30, 2025, was $146.9 million, compared to $142.7 million for the same period in 2024, indicating a growth of about 1.5%[103] - Adjusted EBITDA for the nine months ended September 30, 2025, was $411.3 million, compared to $404.8 million in 2024, reflecting a slight increase[106] Assets and Liabilities - Total assets as of September 30, 2025, were $5,045.1 million, an increase from $4,873.9 million at the end of 2024[19] - Cash and cash equivalents rose to $594.3 million as of September 30, 2025, compared to $359.4 million at the end of 2024[19] - Total liabilities decreased to $2,376.4 million from $2,475.5 million at the end of 2024, indicating improved financial health[19] - The total stockholders' equity increased to $2,668.7 million as of September 30, 2025, compared to $2,454.7 million in 2024, marking an increase of approximately 8.7%[27] - The Company reported total long-term debt of $1,625.2 million as of September 30, 2025, down from $1,813.6 million at December 31, 2024, a reduction of approximately 10.4%[52] - The carrying value of the company's long-term debt totaled $1.63 billion at September 30, 2025, down from $1.82 billion at December 31, 2024[80] Cash Flow and Investments - Net cash flows provided by operating activities decreased to $198.7 million from $223.3 million, reflecting a decline of approximately 11%[21] - Cash and cash equivalents at the end of the period increased to $594.3 million, up from $376.0 million, representing a growth of 58%[21] - Net cash flows provided by investing activities significantly improved to $304.9 million compared to a cash outflow of $56.4 million in the previous year[21] - The company repurchased $19.4 million in common stock during the nine months ended September 30, 2025[21] - Dividends paid were $58.4 million, slightly down from $58.8 million in the same period last year[21] Research and Development - Research and development expenses increased to $18.1 million in Q3 2025, compared to $14.9 million in Q3 2024, indicating a focus on innovation[15] - Research and development expenses for the nine months ended September 30, 2025, totaled $45.6 million, compared to $43.0 million in 2024, indicating a focus on innovation[106] Segment Performance - The Electronics segment reported net sales of $465.2 million for the three months ended September 30, 2025, up from $419.1 million in the same period for 2024, representing an increase of approximately 11%[104] - The Industrial & Specialty segment's net sales decreased to $190.9 million for the three months ended September 30, 2025, from $225.9 million in the same period for 2024, a decline of about 15.5%[104] - Other segment items for the Electronics segment included realized losses of $7.9 million associated with metals derivative contracts for the nine months ended September 30, 2025[106] Acquisitions and Strategic Investments - The company announced a proposed acquisition of Micromax® for approximately $500 million, expected to close in Q1 2026, enhancing its Electronics segment[108] - The company expects to fund the Micromax acquisition with a combination of cash on hand and incremental debt, indicating a strategic investment in advanced electronics[108] Tax and Regulatory Matters - For the three months ended September 30, 2025, the Company recognized income tax expense of $16.2 million, a decrease from $36.8 million in the same period for 2024[91] - The Company incurred a multi-year tax settlement of $7.7 million during the nine months ended September 30, 2025, impacting the overall income tax expense[92] - The One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025, is not expected to have a material impact on the Company's consolidated financial statements[96] Other Financial Metrics - The company reported a basic earnings per share of $0.16 for Q3 2025, down from $0.17 in Q3 2024[15] - The Company recorded depreciation expense of $10.0 million for the three months ended September 30, 2025, consistent with the same period in 2024[45] - The effective interest rate on the Company's debt was 4.5% as of September 30, 2025, compared to 3.0% at December 31, 2024[52] - The Company recognized a loss of $7.0 million on other immaterial divestiture activity in 2025[42] - The Company experienced a net gain on divestitures of $59.6 million during the nine months ended September 30, 2025[21] - The Company completed the sale of its flexographic printing plate business, MacDermid Graphics Solutions, for $323 million, resulting in a gain of $66.6 million[39]

Financial Data and Key Metrics Changes - Organic sales grew by 5%, and adjusted EBITDA reached a record $147 million, exceeding initial guidance of $140 million to $145 million [12][19] - Adjusted EBITDA growth would have been 10% when excluding the graphics business divestiture [12][19] - Adjusted EBITDA margin improved by approximately 20 basis points year over year in constant currency terms, with a margin of 28% when excluding the impact of pass-through metal sales [15][19] Business Line Data and Key Metrics Changes - The electronics segment achieved a 7% organic growth driven by strong performance in semi and assembly, with circuitry solutions sales growing 13% [12][16] - The industrial segment saw flat organic net sales year over year, but underlying chemistry volumes were up mid-single digits, particularly in Asia [17][19] - Adjusted EBITDA growth in the industrial segment would have been nearly 30% when excluding the graphics divestiture [8][19] Market Data and Key Metrics Changes - The electronics business was projected to exceed $2 billion in revenue following the acquisition of Micromax, which was previously just over $1 billion [9][19] - The offshore business is expected to sustain growth into 2026, driven by stable energy prices and ongoing drilling activity [63][19] Company Strategy and Development Direction - The acquisition of Micromax is seen as a strategic move to enhance the electronics portfolio and is expected to be more than 5% accretive to adjusted EPS [10][19] - The company aims to continue disciplined investment in markets it understands, focusing on high-value inorganic opportunities to accelerate per share earnings growth [22][19] - Future growth levers include new product introductions in high-value categories and substantial remaining balance sheet capacity for further investments [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting full-year 2025 adjusted EBITDA to be between $545 million and $550 million, indicating strong growth potential [21][19] - Despite challenges in end markets, the company is confident in its ability to generate organic growth and capitalize on investment opportunities [11][19] Other Important Information - The company generated $84 million of adjusted free cash flow in Q3, with a net leverage ratio of 1.9 times at the end of the quarter [18][19] - The Micromax transaction is expected to close in the first quarter of 2026, with funding coming from cash on hand and modest incremental debt [10][19] Q&A Session Summary Question: Thoughts on Micromax's performance under Element Solutions - Management is excited about Micromax's integration, expecting it to outperform market growth due to enhanced connectivity in the supply chain [26][27] Question: Update on Kouprion commercialization activities - The mid-scale site for Kouprion is on track to be operational by year-end, with meaningful sales and profits expected next year [29][19] Question: Growth and stability of Micromax's business - Micromax's revenue has been stable, and its specialized products are expected to enhance overall stability and growth for Element Solutions [31][34] Question: Margins in the industrial solutions business - There is potential for further margin expansion in the industrial business as volume growth recovers and productivity initiatives take effect [59][61] Question: Sustainability of offshore business strength - The offshore business is expected to sustain growth, although it may not continue at the current rate into 2026 [63][19] Question: Future of semiconductor growth - The semiconductor business is expected to grow above market levels, with strong demand in wafer-level packaging and power electronics [44][19]

Financial Data and Key Metrics Changes - Organic sales grew by 5% in Q3, with adjusted EBITDA reaching a record $147 million, exceeding initial guidance of $140 million to $145 million [12][21] - Adjusted EBITDA growth would have been 10% when excluding the graphics business divestiture [12][21] - Adjusted EBITDA margin improved by approximately 20 basis points year over year in constant currency terms, with a margin of 28% when excluding pass-through metal sales [15][19] Business Line Data and Key Metrics Changes - The electronics segment achieved 7% organic growth, driven by strong performance in semi and assembly, and exceptional volume growth in circuitry solutions [12][14] - Circuitry solutions sales grew 13% organically, supported by demand for data center applications and a seasonal ramp in mobile phone activity [16] - The industrial segment saw flat organic net sales year over year, but underlying chemistry volumes improved due to strong growth in Asia and new business wins in the Americas [17] Market Data and Key Metrics Changes - The electronics business was valued at over $1 billion in 2019 and is expected to exceed $2 billion with the acquisition of Micromax [9] - The semiconductor solutions organic net sales grew by 5%, with continued double-digit growth in wafer-level plating offset by lower power electronics sales [16] - The offshore business continues to grow, driven by stable energy prices and drilling activity, although a slowdown is expected into 2026 [62] Company Strategy and Development Direction - The acquisition of Micromax is seen as a strategic move to enhance the electronics portfolio and is expected to be more than 5% accretive to adjusted EPS [10][19] - The company aims to capitalize on high-value categories and has substantial remaining balance sheet capacity for future investments [11][19] - The focus remains on disciplined investment in markets the company understands, with a commitment to maintaining high-quality acquisitions [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting full-year 2025 adjusted EBITDA to be between $545 million and $550 million [21] - The outlook for leading-edge electronics driven by high-performance computing and data centers remains robust, with stable industrial demand anticipated [21] - Management acknowledged real end market volatility but emphasized strong execution and record results [20][21] Other Important Information - The company generated $84 million of adjusted free cash flow in Q3, with a net leverage ratio of 1.9 times at the end of the quarter [18][19] - The Micromax transaction is expected to close in the first quarter of 2026, with funding from cash on hand and modest incremental debt [19] Q&A Session Summary Question: Thoughts on Micromax's performance under Element Solutions - Management is excited about Micromax's integration, expecting it to outperform the market due to enhanced connectivity in the supply chain and modest cost synergies [26][27] Question: Update on Kouprion commercialization activities - The mid-scale site for Kouprion is on track to be operational by year-end, with meaningful sales and profits expected next year [29] Question: Growth of Micromax and its stability - Micromax's revenue has been stable, with a focus on specialized applications in aerospace and defense, which should enhance overall stability for Element Solutions [31][34] Question: Margins in the industrial solutions business - There is potential for further margin expansion in the industrial business as volume growth recovers and productivity initiatives take effect [60] Question: Sustainability of offshore business strength - The offshore business is expected to sustain growth, although it may not continue at the current rate into 2026 [62] Question: Future of semiconductor growth - The semiconductor business is expected to grow above market levels, with strong performance in wafer-level packaging and power electronics [44]

Financial Data and Key Metrics Changes - Organic sales grew by 5% in Q3 2025, with adjusted EBITDA reaching a record $147 million, exceeding initial guidance of $140 million to $145 million [20][30] - Adjusted EBITDA growth would have been 10% when excluding the graphics business divestiture [20] - Adjusted EBITDA margin improved by approximately 20 basis points year over year in constant currency terms, with a margin of 28% when excluding the impact of pass-through metal sales [24][29] Business Line Data and Key Metrics Changes - The electronics segment achieved 7% organic growth, driven by strong performance in semi and assembly, and exceptional volume growth in circuitry solutions [20][23] - Circuitry solutions sales grew 13% organically, supported by demand for data center applications and mobile phone activity [25] - Industrial and specialty organic net sales were flat year over year, but underlying chemistry volumes for the industrial solutions vertical were up mid-single digits [26] Market Data and Key Metrics Changes - The electronics business is projected to exceed $2 billion in revenue following the acquisition of Micromax, which is expected to contribute approximately $40 million of adjusted EBITDA on a full-year basis [17][18] - The offshore business continues to grow, driven by stable energy prices and drilling activity, although a slowdown in drilling activity is anticipated into 2026 [72] Company Strategy and Development Direction - The acquisition of Micromax is seen as a strategic move to enhance the electronics portfolio and is expected to be more than 5% accretive to adjusted EPS [18][19] - The company is focused on disciplined investment in markets it understands and growth businesses that are better under its ownership [18] - Future growth levers include new product introductions in high-value categories and substantial remaining balance sheet capacity for further investments [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, expecting full-year 2025 adjusted EBITDA to be between $545 million and $550 million, indicating a positive outlook despite market volatility [30] - The company anticipates continued robust demand in leading-edge electronics driven by high-performance computing and data centers [32] - Management noted that while EV volumes are expected to decline, there are substantial customer wins and growth opportunities in power electronics [74] Other Important Information - The company generated $84 million of adjusted free cash flow in Q3 2025, with a net leverage ratio of 1.9 times at the end of the quarter [27][28] - The Micromax transaction is expected to be funded with a combination of cash on hand and modest incremental debt, maintaining financial flexibility for future opportunities [28] Q&A Session Summary Question: Thoughts on Micromax's performance under Element Solutions - Management is excited about Micromax's integration, expecting it to outperform the market due to enhanced connectivity in the supply chain and modest cost synergies [37][38] Question: Update on Kouprion commercialization activities - The mid-scale site for Kouprion is on track to be operational by year-end, with meaningful sales and profits expected next year [40][41] Question: Growth stability of Micromax - Micromax's growth has been stable, with a strong product portfolio that is sticky and specialized for demanding applications [46] Question: Capital flexibility and leverage considerations - The company maintains a long-term target ceiling for leverage at 3.5 times, with plenty of capacity for incremental capital deployment [47] Question: Sustainability of offshore business strength - The offshore business is expected to sustain growth, driven by stable energy prices and ongoing drilling activity [72] Question: Margin performance in industrial solutions - There is potential for further margin expansion in the industrial business as volume growth recovers [68]

Earnings Presentation Third Quarter 2025 Enabling Technology. Growing Sustainably. Legal Notices SAFE HARBOR Please note that in this presentation, we may discuss events or results that have not yet occurred or been realized, commonly referred to as forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. Such discussion and statements will often contain words such as "expect," "anticipate," "p ...

Core Insights - Element Solutions (ESI) reported revenue of $656.1 million for Q3 2025, marking a year-over-year increase of 1.7% and exceeding the Zacks Consensus Estimate by 1.51% [1] - The earnings per share (EPS) for the quarter was $0.41, up from $0.39 a year ago, representing a surprise of 5.13% over the consensus estimate [1] Financial Performance Metrics - Net Sales in the Industrial & Specialty segment were $190.9 million, slightly above the average estimate of $189.5 million, but reflecting a year-over-year decline of 15.5% [4] - Net Sales in the Electronics segment reached $465.2 million, surpassing the average estimate of $456.85 million, with a year-over-year increase of 11% [4] - Adjusted EBITDA for the Industrial & Specialty segment was $45.4 million, exceeding the estimated $40.45 million [4] - Adjusted EBITDA for the Electronics segment was $101.5 million, slightly below the estimated $103.15 million [4] Stock Performance - Over the past month, shares of Element Solutions have returned +6%, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]