Ecovyst (US:ECVT)2024-08-02 20:01Financial Performance - Sales decreased by $1.3 million to $182.8 million for the three months ended June 30, 2024, primarily due to lower average selling prices in Ecoservices[102]. - Gross profit decreased by $7.3 million to $53.7 million, attributed to lower average selling pricing, partially offset by higher volume and favorable variable costs[103]. - Operating income decreased by $5.4 million to $27.9 million, driven by a decrease in gross profit and other operating expenses[103]. - Net income for the three months ended June 30, 2024, was $8.3 million, down $17.8 million or 68.2% from $26.1 million in the same period of 2023[116]. - Adjusted EBITDA decreased to $56.9 million, a decline of $22.4 million or 28.2% compared to $79.3 million in the prior year[117]. - Net income for the six months ended June 30, 2024, was $9.5 million, a significant decrease from $24.7 million in the prior year, reflecting a decline of 61.5%[128]. - Adjusted EBITDA for the six months ended June 30, 2024, was $91.2 million, a decrease of $5.7 million, or 5.9%, compared to $96.9 million for the same period in 2023[144]. Segment Performance - Ecoservices sales decreased by $4.2 million or 2.7%, totaling $153.9 million, primarily due to lower average selling prices[105]. - Advanced Materials & Catalysts sales increased by $2.9 million or 11.2%, reaching $28.9 million, driven by higher sales volume[105]. - Ecoservices sales for the six months ended June 30, 2024, were $295.6 million, a decrease of $0.2 million, or 0.1%, compared to $295.8 million for the same period in 2023[130]. - Advanced Materials & Catalysts sales for the six months ended June 30, 2024, were $47.8 million, a decrease of $1.4 million, or 2.8%, compared to $49.2 million for the same period in 2023[130]. Equity and Income from Affiliates - Equity in net income of affiliated companies for the three months ended June 30, 2024, was $1.4 million, down from $11.4 million in the same period of 2023, due to lower earnings from the Zeolyst Joint Venture[103]. - Equity in net income from affiliated companies dropped to $1.4 million, a decrease of $10.0 million or 87.7% from $11.4 million year-over-year[110]. - Equity in net income of affiliated companies for the six months ended June 30, 2024, was $3.5 million, down from $11.6 million in the same period of 2023[128]. Expenses and Costs - Interest expense increased by $3.7 million or 40.2%, totaling $12.9 million due to higher variable rates[111]. - Selling, general and administrative expenses for the six months ended June 30, 2024, were $44.3 million, an increase of $1.8 million compared to $42.5 million for the same period in 2023[132]. - Other operating expense, net for the six months ended June 30, 2024, was $6.8 million, a decrease of $6.2 million compared to $13.0 million for the same period in 2023[133]. - Interest expense for the six months ended June 30, 2024, increased to $26.3 million from $19.0 million in the prior year, a rise of 38.4%[128]. - Cash interest paid for the six months ended June 30, 2024, was approximately $33.2 million, compared to $19.4 million for the same period in 2023, reflecting an increase of 71.5%[150]. Taxation - The effective tax rate for the quarter was 27.1%, compared to 25.2% in the previous year, influenced by state and local tax changes[115]. - The effective tax rate for the six months ended June 30, 2024, was 30.9%, compared to 28.3% in the same period of 2023[128]. - The provision for income taxes for the six months ended June 30, 2024, was $4.3 million, compared to $9.7 million for the same period in 2023, with an effective tax rate of 30.9%[139]. Cash Flow and Liquidity - Net cash provided by operating activities was $46.4 million for the six months ended June 30, 2024, an increase from $41.1 million in the same period of 2023, representing a growth of 8.0%[153]. - Cash and cash equivalents at the end of the period were $83.3 million, compared to $29.2 million at the end of June 30, 2023, indicating a significant increase of 185.6%[153]. - Total available liquidity as of June 30, 2024, was $155.6 million, consisting of $83.3 million in cash and cash equivalents and $72.3 million available under the ABL Facility[150]. - The company had no borrowings under its revolving credit facility as of June 30, 2024, indicating strong liquidity management[150]. - The company expects ongoing requirements for debt service and capital expenditures to be funded from cash flows from operations and existing cash balances[150]. Debt and Capital Expenditures - As of June 30, 2024, total debt was $873.0 million, with net debt at $789.7 million after accounting for cash and cash equivalents of $83.3 million[154]. - Maintenance capital expenditures for the six months ended June 30, 2024, were $28.3 million, down from $30.4 million in 2023, while growth capital expenditures increased to $5.2 million from $3.3 million[156]. - Total capital expenditures for the six months ended June 30, 2024, were $33.5 million, slightly down from $33.7 million in 2023[156]. Risk and Compliance - Approximately 5% of sales for the six months ended June 30, 2024, were in currencies other than the U.S. dollar, exposing the company to foreign currency translation risks[101]. - There were no material changes in foreign currency exchange rate risk, interest rate risk, or credit risk compared to previous disclosures[159]. - Disclosure controls and procedures were evaluated as effective at a reasonable assurance level as of June 30, 2024[161]. - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2024, that materially affected internal controls[162]. - The company believes there are no pending legal proceedings likely to have a material adverse effect on its business[163].