Ashland(ASH) - 2024 Q2 - Quarterly Report

Financial Performance - Sales for the three months ended March 31, 2024, were $575 million, a decrease of 4.6% compared to$ 603 million for the same period in 2023[5]. - Gross profit for the three months ended March 31, 2024, was $161 million, down 18.3% from$ 197 million in the prior year[5]. - Operating income decreased significantly to $21 million for the three months ended March 31, 2024, compared to$ 83 million for the same period in 2023, representing a decline of 74.7%[5]. - Net income for the three months ended March 31, 2024, was $120 million, an increase of 31.9% from$ 91 million in the same period last year[5]. - Basic earnings per share from continuing operations increased to $2.43 for the three months ended March 31, 2024, compared to$ 1.71 in the prior year, reflecting a growth of 42.3%[5]. - Net income for the six months ended March 31, 2024, was $147 million, an increase from$ 132 million in the same period of 2023, representing an increase of approximately 11.36%[9]. - Total revenue for the three months ended March 31, 2024, was $222 million, a decrease of 7.5% from$ 240 million in the same period of 2023[104]. - For the six months ending March 31, 2024, Ashland's total consolidated sales were $1,048 million, a decrease of 7.1% from$ 1,128 million in the same period of 2023[116]. Assets and Liabilities - Total current assets decreased to $1,427 million as of March 31, 2024, from$ 1,506 million as of September 30, 2023, a decline of 5.2%[6]. - Total assets remained relatively stable at $5,948 million as of March 31, 2024, compared to$ 5,939 million as of September 30, 2023[6]. - Long-term debt increased slightly to $1,328 million as of March 31, 2024, from$ 1,314 million as of September 30, 2023[6]. - Stockholders' equity rose to $3,134 million as of March 31, 2024, compared to$ 3,097 million as of September 30, 2023, indicating a growth of 1.2%[6]. - Total liabilities at fair value remained stable at $5 million as of both reporting dates[26]. Cash Flow - Total cash flows provided by operating activities from continuing operations amounted to$ 255 million, significantly up from $27 million in the prior year, indicating a substantial improvement in operational cash generation[9]. - Cash and cash equivalents at the end of the period increased to$ 439 million from $399 million, reflecting a growth of approximately 10.03%[9]. - The company reported a total cash flow provided by continuing operations of$ 47 million, a recovery from $(206) million in the same period last year[9]. - Free cash flow for the three months ended March 31, 2024, was$ 74 million, down from $140 million in the same period of 2023, indicating a decrease of 47.14%[178]. Expenses - Research and development expenses increased to$ 14 million for the three months ended March 31, 2024, compared to $12 million in the same period last year, reflecting a growth of 16.7%[5]. - Selling, general and administrative expenses increased by$ 27 million in the current quarter, totaling $106 million, with expenses as a percentage of sales rising to 18.4% from 13.1%[144]. - Year-to-date selling, general and administrative expenses increased by$ 17 million, totaling $189 million, with expenses as a percentage of sales increasing to 18.0% from 15.2%[145]. - The company incurred$ 27 million and $49 million in accelerated depreciation for product line optimization activities during the three and six months ended March 31, 2024, respectively[22]. Segment Performance - Life Sciences segment sales for the three months ended March 31, 2024, were$ 222 million, down from $240 million in the same period of 2023, representing a decline of 7.5%[116]. - North America sales in the Life Sciences segment increased to$ 73 million for the three months ended March 31, 2024, up from $61 million in the same period of 2023, representing a 19.7% increase[104]. - Personal Care segment sales increased to$ 169 million in Q1 2024 from $167 million in Q1 2023, showing a slight growth of 1.2%[116]. - Specialty Additives segment sales decreased to$ 157 million in Q1 2024 from $161 million in Q1 2023, reflecting a decline of 2.5%[116]. - Intermediates segment sales dropped to$ 40 million in Q1 2024 from $51 million in Q1 2023, a decrease of 21.6%[116]. Tax and Regulatory Matters - The effective tax rate for the three months ended March 31, 2024, was a benefit of 612%, influenced by a net$ 102 million from favorable tax discrete items, while the six-month rate was a benefit of 610% with a net $126 million from similar items[60]. - The company expects a decrease in the amount of accrual for uncertain tax positions of between$ 4 million and $5 million for continuing operations in the next twelve months[63]. Stock and Shareholder Returns - The company repurchased$ 100 million of common stock during the period, down from $142 million in the previous year, reflecting a reduction in share buyback activity[9]. - Ashland's board authorized a new$ 1 billion stock repurchase program in June 2023, with $900 million remaining available for repurchase as of March 31, 2024[92]. - Cash dividends declared per common share increased to$ 0.385 for the first and second quarters of fiscal 2024, compared to $0.335 for the same quarters in fiscal 2023, marking a 14.9% increase[95]. Environmental and Legal Matters - Ashland's asbestos reserve decreased to$ 263 million at March 31, 2024, from $281 million at September 30, 2023, reflecting a reserve adjustment of$ 9 million[71]. - The company recorded a total of 42 open asbestos claims at the end of the six months ended March 31, 2024, unchanged from the beginning of the year[70]. - Ashland has identified 53 sites under Superfund or similar laws requiring environmental remediation efforts[83].