Ascent Industries (ACNT) - 2025 Q2 - Quarterly Results

Executive Summary Second Quarter 2025 Financial Highlights The company reported decreased net sales but achieved significant gross profit and margin improvement in Q2 2025 Q2 2025 vs Q2 2024 Financial Summary (Continuing Operations) | (in millions, except per share and margin) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $18.7 | $21.5 | (13.0)% | | Gross Profit | $4.9 | $2.8 | 73.0% | | Gross Profit Margin | 26.1% | 13.1% | 1,298bps | | Net Loss | $(2.4) | $(1.5) | 60.0% | | Diluted Loss per Share | $(0.25) | $(0.14) | 78.6% | | Adjusted EBITDA | $(0.3) | $(0.3) | -$52K | | Adjusted EBITDA Margin | (1.8)% | (1.3)% | -50bps | - Financial results from BRISMET and ASTI have been categorized into discontinued operations due to recent sales[3] Management Commentary & Strategic Overview Management highlighted successful divestitures that transformed Ascent into a pure-play specialty chemicals company - Completed the sale of BRISMET in April and ASTI in June, transforming Ascent into a pure-play specialty chemicals company[4] - Gross margin improved to 26.1% in Q2 2025, up 1,298 basis points versus Q2 2024, driven by cost management, strategic sourcing, and product-line optimization[5] - Repurchased 644,171 shares (approximately 6% of outstanding stock) in Q2 2025, returning cash directly to shareholders[5] Financial Performance (Continuing Operations) Net Sales Net sales from continuing operations decreased by 13.0% to $18.7 million in Q2 2025 due to lower volume Net Sales (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $18.7M | $21.5M | (13.0)% | - The decline in net sales was a result of lower volume partially offset by increased average selling prices[6] Gross Profit and Margin Gross profit significantly increased by 73.0% to $4.9 million, with the margin expanding to 26.1% due to cost management Gross Profit and Margin (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | $4.9M | $2.8M | 73.0% | | Gross Profit Margin | 26.1% | 13.1% | 1,298bps | - The increase in gross profit was primarily driven by continued cost management, improved strategic sourcing, and continued product line optimization[7] Net Loss and Diluted Loss Per Share Net loss from continuing operations increased to $(2.4) million, influenced by a one-time asset impairment charge Net Loss and Diluted Loss per Share (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $(2.4)M | $(1.5)M | 60.0% | | Diluted Loss per Share | $(0.25) | $(0.14) | 78.6% | - Excluding a one-time asset impairment charge in the quarter, net loss from continuing operations decreased to ($0.8) million[8] Adjusted EBITDA Adjusted EBITDA from continuing operations remained flat at $(0.3) million, with the margin declining due to lower sales Adjusted EBITDA and Margin (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $(0.3)M | $(0.3)M | -$52K | | Adjusted EBITDA Margin | (1.8)% | (1.3)% | -50bps | - The decrease in Adjusted EBITDA margin was primarily driven by the aforementioned decline in sales in the quarter[9] Business Transformation & Capital Allocation Divestitures of Discontinued Operations The company completed the sales of BRISMET and ASTI, finalizing its transformation into a specialty chemicals company - Sold substantially all assets of Bristol Metals, LLC (BRISMET) for $45 million in cash on April 4, 2025[10] - Sold substantially all assets of American Stainless Tubing, Inc (ASTI) for $16 million in cash on June 30, 2025[10] - As a result of these transactions, the company no longer has any operating tubular assets, transforming into a pure-play specialty chemicals company[4][10] Liquidity and Share Repurchase Program The company maintained a strong liquidity position with $60.5 million in cash and repurchased $7.8 million of its stock Liquidity Position (as of June 30, 2025) | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $60.5 million | | Debt outstanding (revolving credit facilities) | $0 | | Availability (revolving credit facility) | $13.4 million | - Repurchased 644,171 shares at an average cost of $12.15 per share for approximately $7.8 million in Q2 2025[11] Corporate Information About Ascent Industries Co. Ascent Industries Co. is a specialty chemicals platform focused on performance-driven chemical solutions - Ascent Industries Co. is a specialty chemicals platform focused on the development, production, and distribution of tailored, performance-driven chemical solutions[14] Non-GAAP Financial Measures Explanation The report uses Adjusted EBITDA, a non-GAAP measure, to evaluate operating performance and enhance comparability - Adjusted EBITDA is a non-GAAP financial measure useful for evaluating results, generating future operating plans, and making strategic decisions[17][18] - Adjusted EBITDA excludes base EBITDA components (interest expense, income taxes, depreciation and amortization) and material transaction costs (goodwill impairment, asset impairment, acquisition costs, stock-based compensation, etc)[17] Forward-Looking Statements The report contains forward-looking statements that are subject to risks and uncertainties detailed in SEC filings - This press release may include forward-looking statements subject to certain risks and uncertainties which could cause actual results to differ materially[15] - Readers are cautioned not to place undue reliance on these statements and to review risks as set forth in Ascent Industries Co.'s SEC filings[15] Conference Call Details A conference call to discuss Q2 2025 financial results is scheduled for August 6, 2025, at 5:00 p.m. Eastern time - Ascent will hold a conference call on Wednesday, August 6, 2025, at 5:00 p.m. Eastern time to discuss its financial results for the second quarter ended June 30, 2025[12][13] - Live Call Registration Link and Webcast Registration Link are provided for participation[13] Company and Investor Relations Contacts Contact information for the company's CFO and Investor Relations representatives is provided - Company Contact: Ryan Kavalauskas, Chief Financial Officer, 1-630-884-9181[19] - Investor Relations: Ralf Esper, Gateway Group, Inc., 1-949-574-3860, ACNT@gateway-grp.com[19] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets The balance sheet reflects decreased total assets due to divestitures and a significant increase in cash and cash equivalents Key Balance Sheet Items (June 30, 2025 vs Dec 31, 2024) | Metric (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $122,580 | $147,250 | | Cash and cash equivalents | $60,479 | $16,098 | | Current assets of discontinued operations | $— | $47,841 | | Total Liabilities | $32,864 | $53,705 | | Total Shareholders' Equity | $89,716 | $93,545 | Condensed Consolidated Statements of Income (Loss) The company reported a net income of $6.3 million for Q2 2025, driven by income from discontinued operations Key Income Statement Items (Three Months Ended June 30, 2025 vs 2024) | Metric (in thousands, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $18,652 | $21,468 | | Gross profit | $4,866 | $2,813 | | Operating loss from continuing operations | $(2,687) | $(1,843) | | Loss from continuing operations | $(2,447) | $(1,450) | | Income (loss) from discontinued operations, net of tax | $8,733 | $524 | | Net income (loss) | $6,286 | $(926) | | Diluted Net income (loss) per common share | $0.65 | $(0.09) | Consolidated Statements of Cash Flows Net cash from investing activities increased significantly due to divestiture proceeds, boosting total cash by $44.4 million Key Cash Flow Items (Six Months Ended June 30, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,096) | $2,430 | | Net cash provided by (used in) investing activities | $53,959 | $(770) | | Net cash (used in) provided by financing activities | $(7,492) | $84 | | Decrease in cash and cash equivalents | $44,371 | $1,744 | | Cash and cash equivalents, end of period | $60,479 | $3,595 | Non-GAAP Financial Measures Reconciliation The reconciliation details the calculation of Adjusted EBITDA, which was $(0.3) million for Q2 2025 from continuing operations Consolidated Adjusted EBITDA (Three Months Ended June 30, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss from continuing operations | $(2,447) | $(1,450) | | Adjusted EBITDA | $(335) | $(283) | | % sales | (1.8)% | (1.3)% | Specialty Chemicals Adjusted EBITDA (Three Months Ended June 30, 2025 vs 2024) | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Specialty Chemicals Adjusted EBITDA | $2,540 | $1,700 | | % segment sales | 13.6% | 7.9% |