Orion Engineered Carbons(US:OEC)2024-08-01 20:33Financial Performance - Net sales for the three months ended June 30, 2024, increased by $18.2 million, or 4.0%, to $477.0 million year over year, primarily driven by higher volume in the Specialty Carbon Black segment [69]. - Volume for the three months ended June 30, 2024, increased by 5.8 kmt to 233.1 kmt year over year, attributed to higher volume in the Specialty Carbon Black segment [69]. - Cost of sales for the three months ended June 30, 2024, increased by $25.5 million, or 7.5%, to $367.2 million year over year, primarily due to higher volume in the Specialty Carbon Black segment and higher oil prices [70]. - Gross profit for the three months ended June 30, 2024, was $109.8 million, a decrease of $7.3 million or 6.2% compared to the same period in 2023 [68]. - Adjusted EBITDA for the three months ended June 30, 2024, was $75.1 million, a decrease of $12.2 million or 14.0% compared to the same period in 2023 [65]. - Net income for the three months ended June 30, 2024, was $20.5 million, a decrease of $9.6 million or 31.9% compared to the same period in 2023 [68]. - Net sales increased by $20.4 million, or 2.1%, to $979.9 million for the six months ended June 30, 2024 year over year [77]. - Cost of sales increased by $41.9 million, or 5.9%, to $747.9 million for the six months ended June 30, 2024 year over year [78]. - Gross profit decreased by $21.5 million, or 8.5%, to $232.0 million for the six months ended June 30, 2024 year over year [79]. - Adjusted EBITDA for the six months ended June 30, 2024 decreased by $11.3 million, or 16.8%, year over year, to $55.9 million [88]. Expenses - Research and development costs for the three months ended June 30, 2024, increased to $6.5 million, up from $5.9 million in the same period in 2023, reflecting a 10.2% increase [68]. - Selling, general and administrative expenses for the three months ended June 30, 2024, were $60.3 million, an increase of $5.3 million or 9.6% compared to the same period in 2023 [68]. - Selling, general and administrative expenses increased by $9.1 million, or 8.1%, to $121.8 million for the six months ended June 30, 2024 year over year [79]. Segment Performance - Specialty Carbon Black segment net sales increased by $16.0 million, or 10.7%, to $165.5 million for the three months ended June 30, 2024 year over year [85]. - Volume in the Specialty Carbon Black segment increased by 9.3 kmt, or 17.4%, to 62.9 kmt for the three months ended June 30, 2024 year over year [85]. - Gross profit decreased by $3.1 million, or 7.3%, year over year, to $39.5 million for the three months ended June 30, 2024 [87]. - Volume of Rubber Carbon Black decreased by 3.5 kmt, or 2.0%, year over year, to 170.2 kmt for the three months ended June 30, 2024 [89]. Cash Flow and Liquidity - Net cash provided by operating activities during the six months ended June 30, 2024 was $61.7 million, down from $206.2 million in the same period of 2023 [93]. - Net cash used in investing activities for the six months ended June 30, 2024 amounted to $87.8 million, compared to $69.1 million in 2023 [95]. - As of June 30, 2024, total liquidity was $229.2 million, including cash and equivalents of $34.2 million [97]. - Net working capital increased from $344.4 million as of December 31, 2023, to $370.5 million as of June 30, 2024 [100]. - Net debt was $803.5 million, with a net leverage ratio of 2.64x as of June 30, 2024 [97]. Profitability Metrics - The company reported a gross profit per metric ton of $471.0 for the three months ended June 30, 2024, a decrease of $44.2 or 8.6% compared to the same period in 2023 [64]. - Adjusted EBITDA margin decreased by 310 basis points to 16.9% for the three months ended June 30, 2024 [88]. - Income before earnings in affiliated companies and income taxes decreased by $38.7 million, or 35.8%, to $69.5 million for the six months ended June 30, 2024 year over year [80]. - Comprehensive income decreased by $23.8 million to $31.0 million for the six months ended June 30, 2024 year over year [82]. Risk Factors - The company acknowledges that actual results may differ materially from forward-looking statements due to various risk factors, as detailed in their Annual Report for the year ended December 31, 2023 [107]. - Market risk disclosures for the period ended June 30, 2024, remain consistent with those in the Annual Report for the year ended December 31, 2023 [108].