Ashland(ASH)2025-05-01 20:04Financial Performance - Ashland's net income for the three months ended March 31, 2025, was $31 million, a decrease of $89 million compared to $120 million in the same period of 2024[152]. - Diluted earnings per share from continuing operations dropped to $0.63 for the three months ended March 31, 2025, down from $2.40 in the prior year, reflecting a decrease of $1.77[152]. - Ashland's adjusted EBITDA for the three months ended March 31, 2025, was $108 million, a decrease of $18 million compared to $126 million in the same period of 2024[152]. - Sales for the three months ended March 31, 2025, were $479 million, down $96 million from $575 million in the prior year, primarily due to divestitures and lower volume[158]. - The company recorded an impairment charge of $183 million for the six months ended March 31, 2025, primarily related to intangible assets and property[151]. - The net income for the three months ended March 31, 2025, was $31 million, down from $120 million in 2024, and the six-month net loss was $135 million compared to a profit of $147 million in 2024[203]. - Adjusted EBITDA for the three months ended March 31, 2025, was $108 million, compared to $126 million in 2024, and for the six months, it was $169 million versus $197 million in 2024[203]. Sales and Segment Performance - Sales generated outside of North America accounted for 72% of total sales for both the three and six months ended March 31, 2025, compared to 69% and 68% for the same periods in 2024[139]. - The Life Sciences segment contributed 35% to total consolidated sales for the three months ended March 31, 2025, down from 39% in the same period of 2024[140]. - Life Sciences segment sales decreased by $50 million (22.5%) to $172 million for the three months ended March 31, 2025, compared to $222 million in the same period of 2024[214]. - Personal Care segment sales decreased by $23 million (13.6%) to $146 million for the three months ended March 31, 2025, compared to $169 million in the same period of 2024[214]. - Specialty Additives segment sales decreased by $23 million (14.6%) to $134 million for the three months ended March 31, 2025, compared to $157 million in the same period of 2024[214]. Expenses and Cost Management - The cost of sales for the current quarter decreased by $82 million to $332 million compared to $414 million in the prior year, with gross profit as a percentage of sales increasing to 30.7% from 28.0%[160]. - Selling, general and administrative expenses decreased by $21 million to $85 million for the three months ended March 31, 2025, with expenses as a percentage of sales decreasing to 17.7%[162]. - Research and development expenses remained consistent at $14 million for the three months ended March 31, 2025, compared to the same period in 2024[164]. - Unallocated and other expenses decreased by $34 million, totaling $11 million in Q1 2025 compared to $45 million in Q1 2024[254]. - Environmental expenses for the current year were $3 million, down from $7 million in the prior year[258]. Restructuring and Impairments - Ashland initiated a $30 million pre-tax restructuring plan to offset impacts from the Nutraceuticals sale, expected to realize 50% of savings in fiscal 2025 and 50% in fiscal 2026[145]. - The company recorded a gain of $18 million from acquisitions and divestitures in Q1 2025, primarily related to the sale of the Avoca business[255]. - The company recorded a loss on divestiture of $165 million, primarily due to a $183 million impairment of the Avoca business[258]. Tax and Cash Flow - The effective tax rate for the three months ended March 31, 2025, was 23%, while the effective tax rate for the same period in 2024 was a benefit of 612%[184]. - Adjusted income from continuing operations before income taxes for the three months ended March 31, 2025, was $45 million, down from $59 million in 2024[184]. - Operating cash flows from continuing operations were outflows of $21 million for the six months ended March 31, 2025, compared to inflows of $255 million in the prior year[268]. - Free Cash Flow for the six months ended March 31, 2025 was $(65) million, a significant decrease from $185 million in 2024[268]. Market Conditions and Outlook - The ongoing Ukraine/Russia and Israel/Hamas conflicts continue to pose uncertainties that may materially impact Ashland's operations and supply chain[142]. - Reduced consumer sentiment due to global macroeconomic uncertainties is negatively impacting demand, especially for architectural coatings[289]. - The intermediates market continues to face a supply-demand imbalance, pressuring overall pricing[289]. - Full fiscal year sales are projected to be in the range of $1.825 billion to $1.9 billion, with adjusted EBITDA expected to be between $400 million and $420 million[292]. Capital Structure and Equity - Total debt increased to $1,386 million as of March 31, 2025, up from $1,349 million at September 30, 2024[274]. - The debt as a percent of capital employed rose to 35% as of March 31, 2025, compared to 32% at September 30, 2024[275]. - Total equity decreased by $309 million to $2,559 million at March 31, 2025, primarily due to a net loss of $135 million and stock repurchase activity[282]. - The company authorized a new $1 billion stock repurchase program, with $520 million remaining available as of March 31, 2025[283].