Financial Performance - Generated revenue of $35.1 million in Q3 2025, reflecting a 1% increase compared to $34.8 million in the prior year period[5] - Achieved Adjusted EBITDA of $5.2 million in Q3 2025, marking the sixth consecutive quarter of positive Adjusted EBITDA[13] - Reported net loss of $0.7 million in Q3 2025, compared to net income of $1.6 million in the prior year period[12] - Revenue for Q3 2025 was $35,074,000, a slight increase from $34,774,000 in Q3 2024, representing a growth of 0.86%[27] - Year-to-date revenue for the nine months ended September 30, 2025, was $90,905,000, compared to $81,919,000 for the same period in 2024, indicating a growth of 10.9%[27] - Operating loss for Q3 2025 was $(839,000), compared to an operating income of $2,028,000 in Q3 2024[27] - Net loss for the nine months ended September 30, 2025, was $(2,583,000), compared to a net loss of $(3,770,000) for the same period in 2024[27] - For the three months ended September 30, 2025, the net loss was $653,000 compared to a net income of $1,617,000 for the same period in 2024[35] - EBITDA for the three months ended September 30, 2025, was $3,818,000, down from $5,060,000 in 2024, while Adjusted EBITDA was $5,168,000 compared to $5,884,000 in 2024[35] - The trailing twelve-month net loss as of September 30, 2025, was $3,922,000, significantly higher than the net loss of $480,000 in 2024[37] - Trailing twelve-month EBITDA for 2025 was $9,678,000, compared to $11,585,000 in 2024, indicating a decline in operating performance[37] - Adjusted EBITDA for the trailing twelve months ended September 30, 2025, was $16,730,000, an increase from $14,645,000 in 2024[37] Cost and Expenses - Gross margin was 28.8% in Q3 2025, down from 38.6% in the prior year period, primarily due to lower initial commercial phase GAC production volumes[9] - Cost of revenue for Q3 2025 was $24,965,000, up from $21,339,000 in Q3 2024, reflecting an increase of 16.3%[27] - Research and development costs rose to $2.6 million in Q3 2025, compared to $0.8 million in the prior year period, driven by pre-commencement testing of the GAC Facility[11] - Research and development expenses increased to $2,566,000 in Q3 2025, compared to $787,000 in Q3 2024, a significant increase of 226.5%[27] - GAC Facility pre-production feedstock costs amounted to $2,879,000 for the trailing twelve months, with no costs reported in 2024[37] Cash and Debt - Cash and restricted cash totaled $15.5 million as of September 30, 2025, down from $22.2 million as of December 31, 2024[15] - Total debt, including financing leases, increased to $25.9 million as of September 30, 2025, compared to $24.8 million at the end of 2024[16] - Total current assets decreased to $43,927,000 as of September 30, 2025, from $52,356,000 as of December 31, 2024, a decline of 16.0%[25] - Total liabilities decreased to $60,792,000 as of September 30, 2025, from $67,092,000 as of December 31, 2024, a reduction of 9.7%[25] - Cash and restricted cash at the end of the period was $15,493,000, down from $57,380,000 at the beginning of the period, a decrease of 73.0%[29] - The interest expense for the trailing twelve months was $2,358,000, compared to $1,984,000 in 2024, reflecting increased financing costs[37] Production and Sales - Average sales price (ASP) increased by approximately 7% year-over-year in Q3 2025[5] - Initial commercial GAC production and sales achieved at Red River, generating initial GAC revenues[5] Shareholder Information - The company reported a weighted-average number of common shares outstanding of 41,606,000 for Q3 2025, compared to 36,124,000 for Q3 2024, an increase of 15.0%[27] - Share-based compensation for the trailing twelve months was $3,053,000, slightly up from $3,023,000 in 2024[37] Strategic Focus - The company aims to use EBITDA and Adjusted EBITDA as key performance indicators to assess operational effectiveness and facilitate comparisons across periods[31] - The company reported a gain on insurance proceeds of $685,000 for the trailing twelve months ended September 30, 2025[37]

Financial Performance - Generated revenue of $35.1 million in Q3 2025, reflecting a 1% increase compared to $34.8 million in the prior year period[5] - Achieved Adjusted EBITDA of $5.2 million in Q3 2025, marking the sixth consecutive quarter of positive Adjusted EBITDA[13] - Revenue for Q3 2025 was $35,074,000, a slight increase of 0.86% compared to $34,774,000 in Q3 2024[27] - Operating loss for Q3 2025 was $839,000, compared to an operating income of $2,028,000 in Q3 2024[27] - For the three months ended September 30, 2025, the net loss was $653,000 compared to a net income of $1,617,000 for the same period in 2024[35] - EBITDA for the three months ended September 30, 2025, was $3,818,000, down from $5,060,000 in 2024, while Adjusted EBITDA was $5,168,000 compared to $5,884,000 in 2024[35] - For the trailing twelve months ended September 30, 2025, the net loss was $3,922,000, significantly higher than the net loss of $480,000 in 2024[37] - Trailing twelve months EBITDA for 2025 was $9,678,000, compared to $11,585,000 in 2024, indicating a decline in operating performance[37] - Adjusted EBITDA for the trailing twelve months ended September 30, 2025, was $16,730,000, an increase from $14,645,000 in 2024[37] Costs and Expenses - Gross margin was 28.8% in Q3 2025, down from 38.6% in the prior year period, primarily due to lower initial GAC production volumes[9] - Cost of revenue for Q3 2025 was $24,965,000, up 17.5% from $21,339,000 in Q3 2024[27] - Research and development costs rose to $2.6 million in Q3 2025, compared to $0.8 million in the prior year period, driven by pre-commencement testing of the GAC Facility[11] - Research and development expenses increased to $2,566,000 in Q3 2025, compared to $787,000 in Q3 2024, reflecting a focus on innovation[27] - GAC Facility pre-production feedstock costs amounted to $2,879,000 for the trailing twelve months, with no costs reported in 2024[37] Cash and Debt - Cash and restricted cash totaled $15.5 million as of September 30, 2025, down from $22.2 million as of December 31, 2024[15] - Total debt, including financing leases, increased to $25.9 million as of September 30, 2025, compared to $24.8 million at the end of 2024[16] - Cash and restricted cash at the end of Q3 2025 was $15,493,000, down from $57,380,000 at the beginning of the period[29] - The company reported a decrease in accounts payable and accrued expenses to $13,114,000 as of September 30, 2025, from $21,017,000 at the end of 2024[25] - Total current assets decreased to $43,927,000 as of September 30, 2025, down from $52,356,000 at the end of 2024[25] - Total liabilities decreased to $60,792,000 as of September 30, 2025, compared to $67,092,000 at the end of 2024[25] Strategic Initiatives - Initial commercial GAC production and sales were achieved at Red River, generating initial GAC revenues[5] - The company is exploring new markets for its products, including renewable natural gas and rare earth minerals, to drive future growth[21] - The company aims to provide a clearer view of underlying operating trends through the use of TTM Adjusted EBITDA, which helps in assessing the effectiveness of ongoing initiatives[32] Other Financial Metrics - Reported a net loss of $0.7 million in Q3 2025, compared to net income of $1.6 million in the prior year period[12] - Net loss for the nine months ended September 30, 2025, was $2,583,000, an improvement from a net loss of $3,770,000 in the same period of 2024[29] - Share-based compensation for the trailing twelve months was $3,053,000, slightly up from $3,023,000 in 2024[37] - The company reported a gain on insurance proceeds of $685,000 for the trailing twelve months ended September 30, 2025[37] - The company experienced a loss on extinguishment of debt amounting to $1,422,000 for the trailing twelve months, with no such loss reported in 2024[37]

Financial Performance - Total operating revenues for Q3 2025 were $363 million, a decrease of $14 million from $377 million in Q2 2025[4] - Contract revenues for Q3 2025 were $280 million, compared to $288 million in the previous quarter[3] - Net loss for Q3 2025 was $11 million, an improvement from a net loss of $42 million in Q2 2025[3] - Adjusted EBITDA for Q3 2025 was $86 million, down from $106 million in the prior quarter, with an adjusted EBITDA margin of 24.4%[3][4] - Net loss for the nine months ended September 30, 2025, was $67 million, compared to a net income of $345 million for the same period in 2024[22] - Adjusted EBITDA for the three months ended September 30, 2025, was $86 million, with an Adjusted EBITDA margin of 23.7%[27] Cash Flow and Debt - Free cash flow for Q3 2025 was reported at $9 million[6] - Free Cash Flow for the three months ended September 30, 2025, was $9 million, a recovery from a negative $12 million in the previous quarter[30] - At the end of Q3 2025, Seadrill had gross principal debt of $625 million and cash and cash equivalents of $428 million, resulting in a net debt position of $197 million[6] - Cash and cash equivalents, including restricted cash, decreased from $592 million at the end of September 2024 to $428 million at the end of September 2025, a decline of approximately 27.7%[22] - Long-term debt remained relatively stable, increasing slightly from $610 million as of December 31, 2024, to $612 million as of September 30, 2025[19] Guidance and Future Outlook - Full year 2025 guidance for total operating revenue is narrowed to a range of $1,360 million to $1,390 million, and adjusted EBITDA is narrowed to $330 million to $360 million[5] - Capital expenditures and long-term maintenance guidance is narrowed to $280 million to $300 million for 2025[5] - The company continues to focus on building backlog coverage through 2025 and 2026 to minimize exposure to contract gaps[3] Operational Metrics - Average contractual dayrates for rigs remained stable at approximately $330,000 for the three months ended September 30, 2025, compared to $331,000 in the previous quarter[28] - Economic utilization decreased to 91.1% for the three months ended September 30, 2025, down from 93.4% in the previous quarter[28] Balance Sheet - Total assets decreased from $4,156 million as of December 31, 2024, to $4,067 million as of September 30, 2025, representing a decline of approximately 2.1%[19] - Total current liabilities decreased from $501 million as of December 31, 2024, to $439 million as of September 30, 2025, a reduction of approximately 12.4%[19] - Retained earnings decreased from $947 million as of December 31, 2024, to $880 million as of September 30, 2025, reflecting a decline of approximately 7.1%[20] Contract and Backlog - The company secured over $300 million in new contracts across five rigs, contributing to an order backlog of approximately $2.5 billion as of November 5, 2025[5][8]

Financial Performance - Total net sales for Q3 FY 2025 were $178.67 million, a decrease of 43.1% compared to $314.27 million in Q3 FY 2024[16] - Gross profit for Q3 FY 2025 was $25.33 million, down 39.7% from $42.03 million in Q3 FY 2024[16] - Net income for Q3 FY 2025 was $3.08 million, a decline of 80.0% compared to $15.43 million in Q3 FY 2024[16] - Net income for the nine months ended September 30, 2025, was $19,605,000, a decrease of 63.0% compared to $52,962,000 for the same period in 2024[41] - Net sales for the nine months ended September 30, 2025, were $618,353,000, down 40.2% from $1,035,593,000 in 2024[41] - Gross profit for the nine months ended September 30, 2025 was $93.9 million, a decrease of 31.7% from $137.3 million in 2024, with a gross profit margin of 15.2%[102][106] - Net income for the nine months ended September 30, 2025 was $19.6 million, a decrease of 63.0% from $53.0 million in 2024[102] Assets and Liabilities - Total current assets decreased to $469.47 million as of September 30, 2025, down 11.4% from $529.77 million as of December 31, 2024[13] - Total assets decreased to $604.34 million as of September 30, 2025, down 9.4% from $667.02 million as of December 31, 2024[13] - Total liabilities decreased to $183.69 million as of September 30, 2025, down 30.8% from $265.99 million as of December 31, 2024[13] - Cash and temporary investments increased to $38.40 million as of September 30, 2025, up 56.5% from $24.34 million as of December 31, 2024[13] - Cash and temporary investments as of September 30, 2025 totaled $38.4 million, with an additional $55.0 million available for borrowing under the credit facility[114] Cash Flow and Investments - Net cash flows provided by operating activities increased to $49,860,000 for the nine months ended September 30, 2025, compared to $28,589,000 in 2024, representing a growth of 74.3%[41] - Cash used in investing activities was $7.3 million, a decrease of 47.6% from $14.0 million in 2024, primarily for property, plant, and equipment[116][118] - Cash used in financing activities increased significantly to $30.6 million from $4.4 million in 2024, mainly due to payments on the credit facility and dividends[116][119] Stock and Dividends - The company declared cash dividends of $0.20 per share for Q3 FY 2025, compared to $0.19 per share in Q3 FY 2024[16] - A quarterly cash dividend of $0.20 per share was declared on November 3, 2025, payable on December 9, 2025[74] - The company repurchased common stock amounting to $3,762,000 during the nine months ended September 30, 2025, compared to $2,898,000 in 2024, an increase of 29.7%[41] - The company repurchased 84,682 shares of common stock at a total cost of $3.8 million, averaging $44.43 per share during the nine months ended September 30, 2025[67] - The stock repurchase program was authorized by the Board of Directors on April 2, 2024, allowing for up to $25.0 million in aggregate value of common stock to be repurchased[132] Operational Highlights - Selling, general and administrative expenses decreased by 4.8% to $21.2 million for the three months ended September 30, 2025, compared to $22.3 million in 2024[96] - The company reduced its workforce by approximately 150 positions across three U.S. manufacturing facilities as part of a comprehensive cost reduction plan[86] - The company anticipates ongoing challenges from high equipment ownership costs, including increased insurance premiums and elevated interest rates[90] - The strategic investment in Southern Hydraulic Cylinder, Inc. in May 2023 aimed to enhance supply chain stability[83] - The company expects to continue investing in robotics and automated material handling equipment across all domestic manufacturing facilities[83] Revenue Breakdown - North American revenue for the nine months ended September 30, 2025, was $510.3 million, down 46.0% from $945.8 million in 2024[68] - Net foreign sales increased by 10.6% to $30.6 million for the three months ended September 30, 2025, compared to $27.7 million in 2024[93] Lease and Commitments - Total lease cost for the three months ended September 30, 2025, was $343,000, compared to $288,000 in the same period of 2024, reflecting an increase of 19.1%[54] - The weighted-average remaining lease term for operating leases was 1.6 years as of September 30, 2025[55] - The company had commitments of approximately $15.5 million for construction and acquisition of property, plant, and equipment as of September 30, 2025[57] - The company authorized approximately $9.1 million for an expansion at a facility in France, with construction expected to commence in Q1 2026[58] Borrowings - The company had outstanding borrowings of $45.0 million under the credit facility as of September 30, 2025, down from $65.0 million as of December 31, 2024[49] - The company’s long-term obligations include a $100 million revolving credit facility with a maturity date of May 31, 2027[47]

Investment Strategy and Portfolio - As of September 30, 2025, Blue Owl Capital Corporation has originated $174.72 billion in aggregate principal amount of investments, with $170.63 billion retained by the company or its affiliates [531]. - The average debt investment size in portfolio companies was approximately $66.5 million based on fair value, with 94.4% of the total debt portfolio having a weighted average annual revenue of $1.02 billion and a weighted average annual EBITDA of $229 million [536]. - The company focuses on investing in upper middle market businesses, defined as those generating over $50 million in EBITDA annually [532]. - The investment strategy includes direct origination of loans to institutionally-backed companies, with a target loan-to-value ratio of 50% or below [532]. - Blue Owl Capital Corporation's portfolio companies had an average interest coverage of 1.9x and an average net loan-to-value of 42% as of September 30, 2025 [536]. - The company has a diversified investment strategy that includes senior secured loans, subordinated loans, and equity-related securities [531]. - The investment portfolio is expected to be predominantly composed of directly originated debt and income-producing securities [533]. - The company focuses on investing in upper middle-market businesses in non-cyclical industries, including healthcare, business services, technology, and insurance brokerage [562]. - The average investment size in the portfolio is less than 0.5%, with the top ten investments representing less than 25% of the total portfolio [563]. - Approximately 97.4% of debt investments bear interest at a floating rate, which is expected to benefit earnings in a prolonged higher rate environment [541]. Financial Performance - The net investment income after taxes for the three months ended September 30, 2025, was $190.1 million, compared to $184.9 million for the same period in 2024 [592]. - The total investment income for the nine months ended September 30, 2025, was $1,403.5 million, up from $1,202.4 million in 2024 [592]. - Total investment income increased to $453.1 million for the three months ended September 30, 2025, compared to $406.0 million for the same period in 2024, primarily due to higher interest income [597]. - Interest income from investments rose to $359.9 million for the three months ended September 30, 2025, up from $307.7 million in the prior year [596]. - The net change in unrealized gains (losses) for the three months ended September 30, 2025, was a loss of $65.6 million, compared to a gain of $5.8 million in the prior year [608]. - Adjusted, non-GAAP net increase in net assets from operations was $128.2 million for the three months ended September 30, 2025 [595]. Debt and Leverage - The current target leverage ratio is set at 0.90x-1.25x, with net leverage reported at 1.22x debt-to-equity [561]. - The weighted average total cost of debt as of September 30, 2025, was 6.2% [630]. - The total debt of the company amounted to $12,864.6 million, with outstanding principal of $9,627.3 million and net carrying value of $9,528.5 million [648]. - The company’s revolving credit facility has an aggregate principal of $3,900 million, with $1,222 million outstanding as of September 30, 2025 [648]. - The average daily borrowings for the nine months ended September 30, 2025, were $9,920.2 million, compared to $7,509.1 million in 2024, indicating a 32.2% increase [649]. - The company may seek to retire, repurchase, or exchange debt securities depending on market conditions and liquidity [630]. Investment Commitments and Returns - Total new investment commitments for the three months ended September 30, 2025, reached $1,338,001 thousand, compared to $1,151,667 thousand in 2024 [568]. - The principal amount of new investments funded totaled $963,441 thousand in 2025, down from $1,080,803 thousand in 2024 [568]. - The realized gross internal rate of return (IRR) on exited investments since 2016 is approximately 10%, based on total capital invested of $20.27 billion and total proceeds of $24.84 billion [621]. - The company generated undistributed taxable earnings "spillover" of approximately $0.31 per share as of September 30, 2025 [603]. Shareholder Distributions and Stock Activity - For the nine months ended September 30, 2025, the company declared a total distribution of $0.37 per share for three separate dividends, with supplemental dividends of $0.02, $0.01, and $0.05 [639]. - The company repurchased 4,090,138 shares of common stock for approximately $50.0 million under the 2022 Stock Repurchase Program, which ended on May 2, 2024 [645]. - The company distributed a total of 998,642 shares as part of the dividend reinvestment plan for the dividend declared on February 18, 2025 [644]. - The supplemental dividend declared on August 5, 2025, resulted in the issuance of 51,572 shares [644]. - The company’s distributions may exceed earnings, indicating a potential return of capital to shareholders [639]. Regulatory and Management Structure - The company is managed by Blue Owl Credit Advisors LLC, which oversees day-to-day operations and investment management [520]. - Blue Owl Capital Corporation is regulated as a Business Development Company (BDC) and is required to invest at least 70% of its assets in qualifying assets [529]. - The company has received exemptive relief from the SEC to co-invest with affiliates under certain conditions, enhancing its investment flexibility [526]. Market Environment and Opportunities - The middle market lending environment is seen as providing opportunities for attractive risk-adjusted returns, with approximately 200,000 U.S. middle market companies identified [551]. - The weighted average spread of total floating rate debt investments was reported at 5.7% [560]. - The weighted average EBITDA of borrowers increased to approximately $229 million in 2025, up from $115 million in 2021 [564]. - Average revenue of borrowers rose to approximately $1 billion in 2025, compared to $500 million in 2021 [564]. - The average hold size of new investments in Blue Owl's direct lending strategy is approximately $350 million, up from $200 million in 2021 [564].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from __________________ to __________________ Commission File Number 001-11255 State or other jurisdiction of incorporation or organization Registrant, State ...

Revenue Growth - Self-moving equipment rental revenues increased by $23.1 million to $1,110,477 thousand in Q2 FY2026 compared to Q2 FY2025[194] - Self-storage revenues rose by $21.8 million to $246,299 thousand in Q2 FY2026, driven by occupancy gains and a 4.9% improvement in average revenue per occupied foot[195] - Total consolidated revenue for Q2 FY2026 was $1,719,922 thousand, an increase from $1,658,108 thousand in Q2 FY2025[194] - Other revenue increased by $12.2 million to $177,032 thousand in Q2 FY2026, largely due to growth in the U-Box program[199] - Self-storage revenues increased by $40.3 million during the first six months of fiscal 2026, reaching $480.5 million compared to $440.3 million in fiscal 2025, driven by occupancy gains and new capacity additions[227] - Total consolidated revenue for the first six months of fiscal 2026 was $3.35 billion, an increase from $3.21 billion in the same period of fiscal 2025[226] - Total revenues for the Moving and Storage segment increased to $3,186.7 million, up from $3,042.8 million in the prior year[237] - Total revenues for the quarter ended September 30, 2025, were $1,719,922,000, a decrease from $1,658,108,000 in the same quarter of 2024, representing a decline of approximately 3.3%[289] - For the six months ended September 30, 2025, total revenues reached $3,350,392,000, compared to $3,186,686,000 in the same period of 2024, indicating an increase of approximately 5.1%[291] Operating Performance - Earnings from operations decreased to $217,594 thousand in Q2 FY2026 from $301,956 thousand in Q2 FY2025[202] - Earnings from operations for Moving and Storage decreased to $475.0 million in the first six months of fiscal 2026, down from $608.2 million in the first six months of fiscal 2025[234] - Earnings from operations decreased to $467.8 million for the first six months of fiscal 2026, down from $601.8 million in the same period last year[245] - The company reported a pretax earnings of $136,959,000 for Q3 2025, compared to $246,217,000 in Q3 2024, showing a significant decline of about 44.4%[290] - Net earnings available to common stockholders for the quarter ended September 30, 2025, were $105,550,000, consistent with the previous year, indicating stable performance[289] Costs and Expenses - Total costs and expenses increased by $146.2 million in Q2 FY2026, with operating expenses for Moving and Storage rising by $19.4 million[202] - Total costs and expenses increased by $277.0 million during the first six months of fiscal 2026, with operating expenses for Moving and Storage rising by $63.8 million[232] - Total costs and expenses for the quarter ended September 30, 2025, were $1,502,328,000, compared to $1,356,152,000 in Q3 2024, representing an increase of approximately 10.8%[290] Insurance Premiums - Property and casualty insurance premiums increased by $2.5 million to $28,272 thousand in Q2 FY2026 compared to Q2 FY2025[197] - Life insurance premiums decreased by $2.1 million to $18,370 thousand in Q2 FY2026, primarily due to lower life and Medicare supplement premiums[196] - Life insurance premiums decreased by $3.7 million to $37.5 million in the first six months of fiscal 2026, primarily due to lower Medicare supplement premiums[228] - Life insurance premiums collected amounted to $41,228, indicating growth in the insurance segment[292] Investment and Capital Expenditures - The company plans to reinvest approximately $1,295 million in its rental equipment fleet during fiscal 2026[262] - The company invested $526.0 million in real estate acquisitions and new construction during the first six months of fiscal 2026[263] - Net capital expenditures for Moving and Storage were $1,528.4 million for the first six months of fiscal 2026, a decrease of 2.1% from $1,562.2 million in the same period of fiscal 2025[264] - The company incurred capital expenditures of $1,914,502 in property, plant, and equipment, highlighting significant investment in growth[294] Cash and Liquidity - Cash and cash equivalents increased to $1,083.3 million as of September 30, 2025, compared to $988.8 million as of March 31, 2025[257] - Cash and cash equivalents at the end of the period stood at $1,082,820, up from $988,828 at the beginning[294] - Cash flows from operating activities totaled $1,149,996, indicating robust operational cash generation[293] - As of September 30, 2025, the company had available borrowing capacity under existing credit facilities of $465.0 million[278] Equity and Liabilities - Total liabilities as of September 30, 2025, amounted to $13,660,530,000, with significant components including notes, loans, and finance leases payable of $7,694,640,000[286] - Stockholders' equity totaled $7,767,887,000, with retained earnings contributing $8,162,120,000, reflecting a strong equity position[286] - The total stockholders' equity as of March 31, 2025, was $7,498,143,000, with additional paid-in capital of $462,548,000[288] Strategic Plans and Market Conditions - The company plans to expand its U-Haul storage affiliate program and continue investing in the U-Box program[305] - The company expects to maintain a high level of real estate capital expenditures in fiscal 2026[306] - The company plans to expand owned storage properties, funded through a combination of internally generated funds, corporate debt, and borrowings against existing properties[306] - The company is focused on expanding its Life Insurance segment in the senior market and growing its agency force[306] - The company anticipates challenges from inflationary pressures and tariffs that may affect operating margins[306] - The company faces competition and general economic conditions that could affect its performance[306] Risks and Challenges - The company acknowledges risks related to technology, cybersecurity, and data security breaches impacting financial performance[306] - The company is reliant on a limited number of manufacturers for rental trucks, which poses a risk to operations[306] - The company is subject to fluctuations in quarterly results and seasonality, impacting overall financial stability[307]

Financial Performance - Net sales from continuing operations were $333.1 million, flat compared to the prior year[4] - Total net sales, including discontinued operations, were $362.1 million, down 4% year-over-year[7] - Total adjusted EBITDA increased 14% to $121.2 million, with a margin improvement to 33.5%[7] - Performance Materials sales increased 3% to $155.0 million, driven by volume growth from improved global auto production[9] - Advanced Polymer Technologies sales declined by $10.6 million to $38.2 million due to indirect tariff impacts and weak industrial demand[10] - Performance Chemicals sales from continuing operations were $139.9 million, up nearly 5% due to record pavement sales in North America[11] - Net sales for Q3 2025 were $333.1 million, a slight decrease of 0.2% compared to $333.8 million in Q3 2024[21] - Gross profit increased to $133.9 million in Q3 2025, up 1.7% from $131.6 million in Q3 2024[21] - Net income from continuing operations for Q3 2025 was $40.8 million, down 14.1% from $47.5 million in Q3 2024[21] - Basic earnings per share from continuing operations decreased to $1.12 in Q3 2025, down from $1.31 in Q3 2024[21] - Performance Materials segment net sales were $155.0 million in Q3 2025, an increase of 2.6% from $151.1 million in Q3 2024[23] - Performance Chemicals segment net sales increased to $139.9 million in Q3 2025, up from $133.9 million in Q3 2024, representing a 4.5% growth[23] - Advanced Polymer Technologies segment net sales decreased to $38.2 million in Q3 2025, down 21.4% from $48.8 million in Q3 2024[23] - Total adjusted earnings for Q3 2025 were $56.3 million, up from $40.2 million in Q3 2024, representing an increase of approximately 40.5%[60] - The diluted adjusted earnings per share from continuing operations for Q3 2025 was $1.31, slightly down from $1.33 in Q3 2024[62] - The total diluted adjusted earnings per share for the nine months ended September 30, 2025 was $3.90, compared to $2.56 for the same period in 2024, indicating a significant increase of approximately 52.3%[62] Cash Flow and Debt Management - Operating cash flow was $129.7 million, with strong free cash flow of $117.8 million enabling $25 million in share repurchases[12] - Cash provided by operating activities increased to $129.7 million for the three months ended September 30, 2025, compared to $46.5 million in the same period of 2024, marking an increase of 178.5%[37] - Free cash flow for Q3 2025 was $117.8 million, significantly higher than $28.5 million in Q3 2024, with a total free cash flow of $200.0 million for the nine months ended September 30, 2025, compared to $11.4 million in the same period of 2024[70] - Long-term debt, including finance lease obligations, decreased from $1,339.7 million on December 31, 2024, to $1,158.5 million on September 30, 2025, a reduction of approximately 13.5%[35] - Cash paid for interest decreased to $13.5 million for the three months ended September 30, 2025, down from $18.7 million in the same period of 2024[39] - The net debt ratio as of September 30, 2025, was 2.7x, calculated using total adjusted EBITDA of $403.1 million for the last twelve months[72] Strategic Decisions and Future Outlook - Full-year guidance revised to total net sales between $1.25 billion and $1.35 billion and total adjusted EBITDA between $390 million and $405 million[13] - The company announced the sale of the majority of the Industrial Specialties product line and North Charleston crude tall oil refinery for $110 million, expected to close by early 2026[7] - The company plans to continue focusing on strategic investments to enhance its market position and operational efficiency[41] - The company is expected to continue its strategic investments and market expansion efforts, although specific future guidance was not detailed in the provided content[68] Impairments and Charges - The company reported a significant goodwill impairment charge of $183.8 million for the nine months ended September 30, 2025[37] - The company reported a goodwill impairment charge of $183.8 million for the nine months ended September 30, 2025, compared to $306.6 million for the same period in 2024[60] - Restructuring and other charges for Q3 2025 amounted to $1.0 million, down from $3.3 million in Q3 2024[63] - The company incurred $10.1 million in restructuring and other charges for the nine months ended September 30, 2025, compared to $8.3 million in the same period of 2024[63] Tax and Non-GAAP Adjustments - The tax effect on non-GAAP adjustments for the nine months ended September 30, 2025 was $51.2 million, compared to $74.2 million for the same period in 2024[60] - The company anticipates variability in projected effective tax rates due to discrete tax items and other components impacting financial measures[57] - The company does not provide a reconciliation of net income to Total Adjusted EBITDA for 2025 due to the uncertainty in estimating various components of net income[57]

Financial Performance - Third quarter net income attributable to Rayonier was $43.2 million, or $0.28 per share, on revenues of $177.5 million, compared to $28.8 million, or $0.19 per share, on revenues of $124.1 million in the prior year quarter[3] - Pro forma net income for the third quarter was $50.2 million, or $0.32 per share, significantly up from $11.1 million, or $0.07 per share, in the prior year period[4] - Adjusted EBITDA for the third quarter was $114.3 million, nearly doubling from $57.2 million in the prior year period[6] - Operating income for the same period was $41.7 million, up from $14.5 million in the previous quarter, reflecting a significant improvement in profitability[29] - Net income attributable to Rayonier Inc. was $43.2 million, compared to $408.7 million in the previous quarter, which included a gain on the sale of discontinued operations[29] - Net income for the nine months ended September 30, 2025, was $454.2 million, a significant increase from $35.8 million in the same period of 2024[40] - Cash provided by operating activities for the nine months ended September 30, 2025, was $204.9 million, compared to $173.8 million in 2024, reflecting improved operational efficiency[40] - The company reported a net gain of $404.4 million from the sale of discontinued operations during the nine months ended September 30, 2025[40] Segment Performance - Southern Timber segment sales increased by 7% to $66.8 million, with harvest volumes rising 24% to 1.94 million tons[8] - Pacific Northwest Timber segment sales decreased by 37% to $19.9 million, with harvest volumes down 34% to 210,000 tons[9] - Real Estate segment sales surged by $60.7 million to $90.8 million, driven by a significant increase in acres sold from 2,916 to 23,348 acres[10] - Southern Timber sales for Q3 2025 reached $66.8 million, up from $62.4 million in Q3 2024, while Pacific Northwest Timber sales decreased to $19.9 million from $31.6 million[44] - Real Estate segment reported sales of $90.8 million in Q3 2025, significantly higher than $30.1 million in Q3 2024[44] - Total sales for Q3 2025 were $177.5 million, compared to $124.1 million in Q3 2024, representing a 43% increase[44] Shareholder Actions - Rayonier repurchased 1,226,384 shares for $30.1 million at an average price of $24.55 per share during the quarter[5] - The company repurchased common shares under its repurchase program, totaling $67.7 million for the nine months ended September 30, 2025[40] - Total dividends paid for the nine months ended September 30, 2025, amounted to $195.4 million, an increase from $158.1 million in 2024[40] - The company issued an additional dividend of $1.80 per common share, consisting of both cash and common shares, paid on January 30, 2025[41] Cash and Equity Position - The company’s cash and cash equivalents increased to $919.6 million as of September 30, 2025, up from $303.1 million at the end of 2024[32] - Rayonier's total shareholders' equity rose to $2,278.7 million, compared to $1,769.3 million at the end of 2024, indicating strong financial health[32] - Rayonier's long-term debt decreased to $845.1 million from $1,044.4 million at the end of 2024, reflecting improved leverage[32] - The balance of cash, cash equivalents, and restricted cash at the end of the period was $920.3 million, a significant increase from $77.2 million at the end of September 2024[40] Future Outlook - The company expects full-year Adjusted EBITDA to be at or above the higher end of prior guidance, with fourth quarter net income projected between $13 million and $17 million[17] - Rayonier announced a merger of equals with PotlatchDeltic, expected to close in late Q1 or early Q2 2026[5] - The company is in the process of a proposed merger with PotlatchDeltic Corporation, which is expected to enhance future financial and operational results[24] - Rayonier's earnings guidance and future financial outcomes remain subject to various risks, including market conditions and regulatory approvals related to the merger[24] - Adjusted EBITDA guidance for Q4 2025 is projected to be between $50.0 million and $60.0 million[53] - Net income attributable to Rayonier Inc. for Q4 2025 is expected to range from $12.5 million to $17.0 million[53] - Pro forma net income for Q4 2025 is estimated to be between $17.3 million and $21.8 million[53] - Costs related to the merger with PotlatchDeltic are projected at $4.8 million for Q4 2025[53] - Diluted earnings per share for Q4 2025 is anticipated to be between $0.08 and $0.11[53] - Pro forma diluted earnings per share for Q4 2025 is expected to range from $0.11 to $0.14[53] Other Financial Metrics - The company utilizes non-GAAP financial measures such as "cash available for distribution" and "Adjusted EBITDA" to provide additional insights into its financial performance[26] - Cash Available for Distribution (CAD) for the nine months ended September 30, 2025, was $153.5 million, more than double the $77.1 million reported for the same period in 2024[47] - Capital expenditures from continuing operations for the nine months ended September 30, 2025, were $35.0 million, down from $40.3 million in 2024[40] - The company experienced a depreciation, depletion, and amortization expense of $81.7 million from continuing operations for the nine months ended September 30, 2025[40] - Cash interest received during the nine months ended September 30, 2025, was $15.0 million, compared to $4.8 million for the same period in 2024[51] Merger-Related Information - The merger with PotlatchDeltic is expected to close in late Q1 or early Q2 2026, with costs expected to increase prior to quarter-end[54] - The company recognized an asset impairment charge related to certain real estate assets acquired in the 2020 merger with Pope Resources[51] - Restructuring charges included severance costs related to workforce optimization initiatives[51]

Financial Performance - Total revenue for the three months ended September 30, 2025, was $841 million, a 3% increase from $817 million in the same period of 2024[22] - Net income for the three months ended September 30, 2025, was $114 million, compared to $64 million for the same period in 2024, representing a 78% increase[26] - Operating income for the nine months ended September 30, 2025, was $600 million, up from $500 million in the same period of 2024, reflecting a 20% increase[22] - Total revenue for the nine months ended September 30, 2025, reached $2,424 million, compared to $2,391 million for the same period in 2024, marking a growth of 1.4%[65] - Net income for the nine months ended September 30, 2025, was $291 million, compared to $246 million for the same period in 2024, representing an increase of 18.3%[106] Cash and Assets - Cash and cash equivalents increased to $236 million as of September 30, 2025, from $196 million at the end of 2024[29] - Total assets rose to $6,509 million as of September 30, 2025, compared to $5,421 million at the end of 2024, marking a 20% increase[29] - Total receivables, net, increased to $746 million as of September 30, 2025, compared to $682 million as of December 31, 2024, reflecting a growth of 9%[70] - Current receivables as of September 30, 2025, were $687 million, up from $620 million as of December 31, 2024, with a net allowance for credit losses decreasing from $35 million to $28 million[69] Liabilities and Debt - Total liabilities increased to $5,786 million as of September 30, 2025, from $4,785 million at the end of 2024, reflecting a 21% increase[29] - Total long-term debt outstanding as of September 30, 2025, is $4.988 billion, with a book value of $4.942 billion, compared to $3.870 billion as of December 31, 2024[10] - The company recorded a contingent acquisition consideration liability of $63 million as of September 30, 2025, up from $15 million at the end of 2024[102] Income and Expenses - The company reported a basic net income per share of $1.37 for the three months ended September 30, 2025, compared to $0.72 for the same period in 2024, a 90% increase[22] - Research and development expenses for the three months ended September 30, 2025, were $62 million, slightly down from $66 million in the same period of 2024[22] - The cost of revenue for the three months ended September 30, 2025, was $217 million, compared to $246 million in the same period of 2024, showing a decrease of 11.8%[58] - Payroll and related expenses for the three months ended September 30, 2025, were $125 million, consistent with $126 million in the same period of 2024, indicating stability in labor costs[58] Acquisitions and Investments - The company completed the acquisition of Grover Charitable Gaming for an upfront consideration of $850 million, with potential contingent payments of up to $200 million based on revenue metrics over four years[37] - Capital expenditures for the three months ended September 30, 2025, totaled $79 million, up from $71 million in the same period of 2024, indicating an increase of 11.3%[61] Stockholder Information - Stockholders' equity as of September 30, 2025, totaled $723 million, an increase from $636 million on January 1, 2025[104] - The company repurchased approximately 4.3 million shares of common stock for $380 million during the nine months ended September 30, 2025, with an additional 1.3 million shares purchased for $101 million post-quarter[108] Legal and Regulatory Matters - The estimated range of possible legal losses related to various contingencies is up to approximately $14 million in excess of accrued liabilities[115] - LNWI faces a potential payment of approximately 90 billion Colombian pesos (about $30 million) plus default interest due to a ruling by the Tribunal in Colombia[119] - The claims in the Automatic Card Shufflers Litigation seek unspecified money damages, with discovery closing on December 1, 2023[124] Other Financial Metrics - AEBITDA for the three months ended September 30, 2025, was $375 million, compared to $319 million for the same period in 2024, reflecting a year-over-year increase of 17.6%[61] - Total stock-based compensation expense for the nine months ended September 30, 2025, was $87 million, up from $82 million in the same period of 2024[106] - The effective tax rate for the nine months ended September 30, 2025, was impacted by foreign earnings, with an income tax expense of $76 million compared to $61 million in 2024[110]