Ascent Industries (ACNT) - 2024 Q1 - Quarterly Report

Financial Performance - Consolidated net sales for Q1 2024 were $44.1 million, a decrease of$10.8 million, or 19.6%, compared to Q1 2023[88] - Consolidated gross profit increased 72.4% to $2.5 million, or 5.7$1.5 million, or 2.7% of sales in Q1 2023[88] - Consolidated operating loss for Q1 2024 was $5.3 million, an improvement from an operating loss of$6.4 million in Q1 2023[89] - Adjusted EBITDA for Q1 2024 was $(3.115) million, or (7.1)$(3.735) million, or (6.8)% of sales in Q1 2023[95] Segment Performance - Specialty Chemicals segment net sales decreased by $3.5 million, or 14.5$20.3 million in Q1 2024[90] - Tubular Products segment net sales totaled $23.8 million, a decrease of$7.2 million, or 23.3%, from Q1 2023[92] Cash Flow and Liquidity - Cash flows from operating activities decreased due to changes in working capital, with inventory increasing cash flows by $1.2 million in Q1 2024 compared to$9.5 million in Q1 2023[103] - Accounts payable contributed $4.0 million to operating cash flows in Q1 2024, down from$6.8 million in Q1 2023, indicating a decrease in inventory purchases[103] - Net cash used in investing activities decreased due to lower capital expenditures in Q1 2024 compared to Q1 2023[104] - The company had no outstanding debt as of March 31, 2024, and December 31, 2023, reflecting a decrease in cash used in financing activities[105][107] - The current ratio decreased from 3.7 as of December 31, 2023, to 3.2 as of March 31, 2024, indicating a decline in liquidity[111] Shareholder Actions - The company repurchased 16,330 shares at an average price of $9.97 for a total cost of$163,221 in Q1 2024, compared to 32,313 shares at $10.11 for$327,521 in Q1 2023[108][109] Tax and Interest - Interest expense decreased to $0.1 million in Q1 2024 from$1.1 million in Q1 2023 due to lower outstanding debt[94] - The effective tax rate for continuing operations was 22.3% for Q1 2024, lower than the U.S. statutory rate of 21.0%[94] Asset Management - The company incurred asset impairment charges of $1.1 million related to the Munhall closure during Q1 2024[85] - Material cash requirements for operating and finance leases totaled$32.1 million, with $1.5 million payable within 12 months[112] - Capital spending is expected to be as much as$6.2 million for the remainder of fiscal 2024[113] Equity and Debt Ratios - The debt to capital ratio remained at 0% as of March 31, 2024, consistent with no outstanding debt[111] - Return on average equity improved from -38.6% as of December 31, 2023, to -4.9% as of March 31, 2024, suggesting a reduction in losses[111]