Financial Performance - Consolidated net sales for Q3 2020 were $59.3 million, a decrease of $14.4 million or 19.5% compared to Q3 2019[93] - The Metals Segment's net sales for Q3 2020 totaled $47.1 million, a decrease of $13.0 million or 21.7% from Q3 2019[96] - The Company recorded a net loss of $10.5 million for Q3 2020, compared to a net loss of $1.0 million for Q3 2019[94] - For the first nine months of 2020, consolidated net sales were $200.1 million, a decrease of $37.1 million or 15.6% compared to the same period in 2019[93] - The Metals Segment's net sales for the first nine months of 2020 totaled $159.8 million, a decrease of $36.0 million or 18.4% from the same period in 2019[96] - The company reported a net loss of $18.7 million for the first nine months of 2020, compared to a net loss of $2.1 million for the same period in 2019[121] Segment Performance - Specialty Chemicals Segment net sales for Q3 2020 totaled $12.2 million, a decrease of $1.3 million, or 9.9%, from Q3 2019[101] - Operating income for the Specialty Chemicals Segment increased by $0.2 million, or 25.4%, to $1.1 million in Q3 2020 compared to Q3 2019[103] - Metals Segment reported a net loss of $11,417 thousand for the three months ended September 30, 2020, compared to a net income of $1,671 thousand in the same period of 2019[113] - Adjusted EBITDA for the Metals Segment was $1,355 thousand, representing 2.9% of segment sales, down from $3,004 thousand and 5.0% in the prior year[113] - Specialty Chemicals Segment net income increased to $1,061 thousand for the three months ended September 30, 2020, compared to $846 thousand in the same period of 2019[114] - Adjusted EBITDA for the Specialty Chemicals Segment was $1,498 thousand, which is 12.3% of segment sales, up from $1,309 thousand and 9.7% in the prior year[114] Expenses and Profitability - Consolidated gross profit for Q3 2020 decreased 31.5% to $5.0 million, or 8.4% of sales, compared to $7.3 million, or 9.9% of sales in Q3 2019[94] - Consolidated selling, general, and administrative expenses decreased by $2.1 million to $6.3 million, or 10.6% of sales in Q3 2020[95] - Selling, general, and administrative expenses decreased by 20.6% to $4.0 million for Q3 2020 compared to $5.0 million in Q3 2019[100] - Unallocated corporate expenses decreased by $0.9 million, or 35.6%, to $1.5 million in Q3 2020 compared to $2.4 million in Q3 2019[105] Cash Flow and Liquidity - Cash balance decreased by $0.4 million to $0.2 million as of September 30, 2020, compared to $0.6 million at December 31, 2019[108] - Cash flows from operating activities decreased to $5,970 thousand for the nine months ended September 30, 2020, down from $17,927 thousand in the prior year[120] - Total cash used in financing activities was $(8,141) thousand for the nine months ended September 30, 2020, compared to cash provided of $4,105 thousand in the same period of 2019[120] - The company had $71.3 million of total borrowings outstanding as of September 30, 2020, down $4.2 million from the balance at December 31, 2019[125] - The current ratio was 3.9 at September 30, 2020, compared to 3.6 at December 31, 2019[131] Impairments and Adjustments - Non-cash goodwill impairment in the Metals Segment amounted to $10.7 million for Q3 2020[94] - Adjusted EBITDA for Q3 2020 was $1.64 million, representing 2.8% of sales[112] - Adjusted net loss for the three months ended September 30, 2020, was $(1,032) thousand, compared to $(739) thousand in the same period of 2019[117] Debt and Credit Facilities - The Company has a $100 million asset-backed revolving line of credit with a maturity date of December 21, 2021[125] - The long-term debt to capital ratio increased to 45% at September 30, 2020, from 41% at December 31, 2019[131] - The Company entered into multiple amendments to its Credit Agreement to address technical defaults related to the fixed charge coverage ratio[126] Shareholder Actions - The Company repurchased 59,617 shares at an average price of $10.65, totaling $636,940 in the nine months ended September 30, 2020[129] - As of September 30, 2020, the Company had 790,383 shares remaining under its stock repurchase authorization[127] Tax and Allowances - The effective tax rate for Q3 2020 was 19.4%, compared to 10.6% for Q3 2019[106] - The Company maintains an allowance for credit losses on accounts receivable, adjusting it based on current expected credit losses[135] Other Information - The Company anticipates continued lower customer demand in Q4 2020 compared to Q4 2019 due to the ongoing impacts of COVID-19[87] - The Company has no off-balance sheet arrangements that could materially affect its financial position[132] - No dividends were declared or paid by the Company in 2019[130] - The Company had a minimum fixed charge coverage ratio of 1.47 and a minimum tangible net worth of $67.7 million as of September 30, 2020[126] - The return on average equity was (10.8)% at September 30, 2020, compared to (2.9)% at December 31, 2019[131]
Ascent Industries (ACNT) - 2020 Q3 - Quarterly Report