Ashland(ASH) - 2025 Q2 - Quarterly Results

Financial Performance - Second-quarter sales were $479 million, a decrease of 17% from $575 million in the prior year, with Portfolio Optimization initiatives reducing sales by approximately $67 million or 12%[5] - Income from continuing operations was $30 million, or $0.63 per diluted share, down from $121 million, or $2.40 per diluted share, in the prior year[7] - Adjusted EBITDA was $108 million, a 14% decrease from $126 million in the prior year, primarily due to the impact of Portfolio Optimization and lower organic sales[7] - The net income for the three months ended March 31, 2025, was $31 million, a decrease from $120 million in the same period last year[44] - Adjusted diluted earnings per share for the three months ended March 31, 2025, was $0.63, down from $2.40 in the prior year[44] - Net income for Q2 2025 was $31 million, down from $120 million in Q2 2024, with a net loss of $(135) million for the six months ended March 31, 2025, compared to $147 million in 2024[51] - Adjusted EBITDA for Q2 2025 was $108 million, compared to $126 million in Q2 2024, and $169 million for the six months ended March 31, 2025, down from $197 million in 2024[54] - Adjusted Operating Income for Q2 2025 was $60 million, compared to $72 million in Q2 2024, with $71 million for the six months ended March 31, 2025, down from $90 million in 2024[54] Segment Performance - Life Sciences segment sales totaled $172 million, a 23% decrease compared to the prior year, primarily driven by the divestiture of the Nutraceuticals segment[11] - Personal Care segment sales were $146 million, a 14% decrease from $169 million in the prior year, with Portfolio Optimization reducing sales by approximately $15 million or 9%[14] - Specialty Additives segment sales were $134 million, a 15% decrease from $157 million in the prior year, with Portfolio Optimization reducing sales by approximately $10 million or 6%[16] - The Life Sciences segment generated sales of $172 million, a decrease of 22.5% from $222 million year-over-year[44] - The Specialty Additives segment reported an operating loss of $7 million for the three months ended March 31, 2025, compared to an operating loss of $18 million in the same period last year[44] Cash Flow and Liquidity - Cash flows from operating activities were $9 million, a decrease from $54 million in the prior-year quarter, reflecting lower earnings and trade working capital fluctuations[9] - Ashland's free cash flow metrics indicate ongoing cash generation available for debt and equity holders, reflecting the company's liquidity position[34] - Operating cash flows from continuing operations for the six months ended March 31, 2025, were negative at $(113) million, compared to positive cash flows of $47 million in the prior year[47] - Free Cash Flows for Q2 2025 were $(12) million, compared to $20 million in Q2 2024, and $(65) million for the six months ended March 31, 2025, compared to $185 million in the same period of 2024[51] - Operating Cash Flow Conversion for Q2 2025 was 29%, down from 45% in Q2 2024, with a significant increase to 173% for the six months ended March 31, 2025, compared to 36% in 2024[51] - Ongoing Free Cash Flow Conversion for Q2 2025 was -6%, compared to 3% in Q2 2024, with -20% for the six months ended March 31, 2025, compared to 36% in 2024[51] Balance Sheet and Assets - Total assets decreased from $5,645 million on September 30, 2024, to $5,233 million on March 31, 2025, representing a decline of approximately 7.3%[46] - Cash and cash equivalents decreased from $300 million on September 30, 2024, to $168 million on March 31, 2025, a decline of 44%[46] - Total current liabilities decreased slightly from $490 million to $463 million, a reduction of about 5.5%[46] - Long-term debt remained relatively stable, decreasing slightly from $1,349 million to $1,336 million[46] Future Outlook - Ashland anticipates full fiscal year sales in the range of $1.825 billion to $1.9 billion and adjusted EBITDA in the range of $400 million to $420 million[26] - The company expects flattish organic sales volume growth for the full fiscal year, with a positive inflection anticipated in the second half, led by Life Sciences[24] - The company anticipates a moderate recovery in European markets, which have stabilized at a low level, but has not yet materialized[30] - Ashland is focused on cost reduction and manufacturing optimization initiatives to drive sustainable growth and create long-term value[39] Tax and Other Items - The tax rate for the three and six months ended March 31, 2025, was 21%, compared to 20% for the same periods in 2024[60] - Key items before tax for Q2 2025 included an Avoca impairment and sale of $(8) million and restructuring costs of $8 million[54]