Ashland(US:ASH)2025-01-29 19:14Financial Performance - Sales for the three months ended December 31, 2024, were $405 million, a decrease of 14.4% from $473 million in the same period of 2023[7]. - Gross profit increased to $111 million, up 13.3% from $98 million year-over-year[7]. - Operating loss for the quarter was $179 million, compared to an operating loss of $18 million in the prior year[7]. - Net income loss was $165 million, a significant decline from a net income of $26 million in the same quarter of 2023[7]. - Basic earnings per share from continuing operations was $(3.51), compared to $0.54 in the same period last year[7]. - Adjusted EBITDA for the three months ended December 31, 2024, was $61 million, down from $70 million in the same period of 2023, reflecting a $9 million decrease primarily due to portfolio optimization actions[154]. - For the three months ended December 31, 2024, Ashland reported a net loss of $165 million compared to a net income of $26 million in the same period of 2023[188]. - The diluted EPS from continuing operations was $(3.51) for the three months ended December 31, 2024, compared to $0.54 in the prior year[191]. Asset and Liability Management - Total assets decreased to $5,231 million from $5,645 million as of September 30, 2024[8]. - Cash and cash equivalents at the end of the period were $219 million, down from $300 million at the beginning of the period[10]. - As of December 31, 2024, Ashland's long-term debt was $1,313 million, a decrease from $1,349 million as of September 30, 2024[54]. - The total allowance for credit losses was $1 million at both December 31, 2024, and September 30, 2024[97]. - Ashland's restricted investments totaled $350 million as of December 31, 2024, with $73 million classified within other current assets[41]. Impairments and Restructuring - An impairment charge of $183 million was recorded related to the Avoca business, impacting the loss on acquisitions and divestitures[22]. - The company initiated a restructuring plan in fiscal 2025 to offset the impact from the sale of the Nutraceuticals business, which was completed in fiscal 2024[29]. - The company reported an impairment charge of $183 million related to the Avoca business for the three months ended December 31, 2024[133]. - Ashland initiated a $30 million restructuring plan to offset impacts from the Nutraceuticals sale, with expected realization of 50% in fiscal 2025 and 50% in fiscal 2026[143]. Segment Performance - Life Sciences segment sales decreased to $134 million from $200 million, representing a decline of 33%[132]. - Personal Care segment sales increased slightly to $134 million from $129 million, a growth of 3.9%[132]. - Specialty Additives segment sales decreased to $115 million from $122 million, a decline of 5.7%[132]. - Operating income for Life Sciences was $14 million, down from $32 million, a decrease of 56.3%[132]. - Life Sciences reported a decrease in operating income to $14 million for the three months ended December 31, 2024, down from $32 million in the same period of 2023, representing a change of $(18) million[204]. Tax and Regulatory Matters - The effective tax rate for the three months ended December 31, 2024, was 21%, influenced by jurisdictional income mix and a net $8 million from unfavorable tax discrete items[68]. - The overall effective tax rate for the three months ended December 31, 2023, was a benefit of 600%, influenced by jurisdictional income mix and net favorable tax discrete items of $24 million[70]. - As of December 31, 2024, the balance of unrecognized tax benefits was $64 million, with a decrease of $2 million related to prior years and an increase of $1 million for the current year[72]. Environmental and Legal Reserves - Total reserves for asbestos claims were $264 million as of December 31, 2024, reflecting an increase of $24 million during fiscal 2024[83]. - Ashland's asbestos-related litigation reserves are currently estimated at $264 million, with potential future costs ranging up to approximately $410 million, depending on various assumptions[99]. - The total reserves for environmental remediation decreased from $221 million at September 30, 2024, to $216 million at December 31, 2024, reflecting disbursements of $6 million and revised obligation estimates of $1 million[102][103]. Market and Operational Challenges - The company anticipates challenges due to ongoing geopolitical conflicts affecting supply chains and market conditions[134]. - Total sales for the current quarter decreased by $68 million to $405 million, driven by divestitures, lower volume, unfavorable pricing, and foreign currency exchange impacts[156]. - The decline in sales, operating income, and EBITDA was attributed to lower volume, portfolio optimization activities, divestiture of the Nutraceuticals business, unfavorable pricing, and foreign currency exchange impacts[205]. Stock and Dividends - The company has a stock repurchase program with $620 million remaining available for repurchase as of December 31, 2024, following the authorization of a new $1 billion program in June 2023[110]. - Dividends paid in the first quarter of fiscal 2025 were $0.405 per share, an increase from $0.385 per share in the first quarter of fiscal 2024[112].