Ascent Industries (ACNT) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Disclosure Regarding Forward Looking Statements This section provides a standard disclaimer regarding forward-looking statements, identifying them by specific terminology and outlining various risks and uncertainties that could cause actual results to differ materially from historical or anticipated outcomes - Forward-looking statements are identified by words such as "estimate," "project," "intend," "expect," "believe," "should," "anticipate," "hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar expressions[8] - Potential risks and uncertainties include adverse economic conditions (e.g., pandemics), inability to weather economic downturns, competitive products/pricing, product demand risks, raw material costs/availability, financial stability of customers, production delays, loss of confidence, employee relations, acquisition risks, environmental issues, tax law changes, and inability to comply with debt covenants[8] Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flow statements, and statements of shareholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial items for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $60,479 | $16,098 | | Total current assets | $86,911 | $83,072 | | Total assets | $122,580 | $147,250 | | Total current liabilities | $13,082 | $22,347 | | Total liabilities | $32,864 | $53,705 | | Total shareholders' equity | $89,716 | $93,545 | Condensed Consolidated Statements of Income (Loss) Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $18,652 | $21,468 | $36,486 | $41,764 | | Gross profit | $4,866 | $2,813 | $7,933 | $4,199 | | Operating loss from continuing operations | $(2,687) | $(1,843) | $(4,728) | $(6,337) | | Net income (loss) | $6,286 | $(926) | $3,993 | $(6,419) | | Net income (loss) per common share (Basic) | $0.65 | $(0.09) | $0.40 | $(0.64) | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 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 | | Increase in cash and cash equivalents | $44,371 | $1,744 | | Cash and cash equivalents at end of period | $60,479 | $3,595 | Condensed Consolidated Statements of Shareholders' Equity Condensed Consolidated Statements of Shareholders' Equity (in thousands) | (in thousands) | Balance at Dec 31, 2024 | Net Income (Loss) | Repurchase of Common Stock | Balance as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $93,545 | $3,993 | $(8,044) | $89,716 | Condensed Consolidated Statements of Shareholders' Equity (in thousands) | (in thousands) | Balance at Dec 31, 2023 | Net Income (Loss) | Repurchase of Common Stock | Balance as of June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $107,410 | $(6,419) | $(317) | $101,042 | Notes to Condensed Consolidated Financial Statements Note 1: Basis of Presentation This note outlines the basis for preparing the unaudited condensed consolidated financial statements, emphasizing compliance with SEC rules and GAAP, the use of management estimates, and reclassifications - The Company reclassified its Tubular Products segment (including BRISMET and ASTI) to discontinued operations and adjusted prior period amounts to conform to current period presentation[26] - Adopted ASU 2023-07 (Segment Reporting) in December 2024, which did not have a material effect on consolidated financial statements or footnote disclosures[27] - Currently evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years ending December 31, 2025 and 2027, respectively[28][30][31] Note 2: Discontinued Operations This note details the divestitures of Bristol Metals (BRISMET) and American Stainless Tubing (ASTI) in 2025, which were previously part of the Tubular Products segment - Divestiture of Bristol Metals (BRISMET) completed on April 4, 2025, for approximately $45 million in cash proceeds, resulting in a preliminary, pretax gain on sale of $4.4 million[33] - Divestiture of American Stainless Tubing (ASTI) completed on June 30, 2025, for approximately $16 million in cash proceeds, resulting in a preliminary, pretax gain on sale of $4.6 million[34] Summary of Discontinued Operations (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $8,188 | $28,741 | $34,460 | $52,797 | | Gross profit | $1,474 | $2,115 | $4,690 | $2,852 | | Net income (loss) from discontinued operations | $8,733 | $524 | $8,446 | $(1,488) | Note 3: Revenue Recognition This note details the Company's revenue recognition policies, primarily from contracts to produce, ship, and deliver specialty chemical products, with revenue recognized when control is transferred to customers, typically upon shipment - Revenue is generated primarily from contracts to produce, ship and deliver specialty chemical products, recognized when control of goods or services is transferred to customers upon shipment[37] Disaggregated Revenue from Continuing Operations (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Custom Manufacturing | $14,259 | $15,001 | $27,789 | $30,763 | | Product Innovation & Sales | $4,393 | $6,467 | $8,697 | $11,001 | | Net sales | $18,652 | $21,468 | $36,486 | $41,764 | | Point-in-time | $11,685 | $17,790 | $25,317 | $33,153 | | Over-time | $6,967 | $3,678 | $11,169 | $8,611 | Note 4: Fair Value of Financial Instruments This note defines the fair value hierarchy (Levels 1, 2, and 3) and discusses non-recurring fair value measurements, specifically an impairment charge related to a right-of-use asset for the former Munhall facility - In Q2 2025, the Company incurred an impairment charge of $1.6 million related to the write-down of the right-of-use asset for the Master lease associated with the former Munhall facility[48] - The fair values of cash and cash equivalents, accounts receivable, accounts payable, and the Company's note payable approximated their carrying value due to their short-term nature[50] Note 5: Inventories This note outlines the Company's inventory valuation method (lower of cost or net realizable value) and presents the components of inventories from continuing operations Inventories from Continuing Operations (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $5,880 | $5,506 | | Finished goods | $2,216 | $1,381 | | Less: inventory reserves | $(1,430) | $(1,160) | | Inventories, net | $6,666 | $5,727 | Note 6: Property, Plant and Equipment This note provides a breakdown of property, plant, and equipment from continuing operations and the associated depreciation expense for the reported periods Property, Plant and Equipment, Net (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Land | $518 | $665 | | Leasehold improvements | $2,343 | $2,220 | | Buildings | $1,720 | $1,475 | | Machinery, fixtures and equipment | $39,126 | $39,038 | | Construction-in-progress | $733 | $875 | | Total gross PP&E | $44,440 | $44,273 | | Less: accumulated depreciation and amortization | $(28,198) | $(26,684) | | Property, plant and equipment, net | $16,242 | $17,589 | Total Depreciation Expense (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total depreciation | $881 | $985 | $1,870 | $1,961 | Note 7: Intangible Assets and Deferred Charges This note describes the Company's intangible assets, primarily from business acquisitions and amortized over 15 years, and deferred charges, representing debt issuance costs amortized over four years Definite-lived Intangible Assets (in thousands) | (in thousands) | June 30, 2025 Gross Carrying Amount | June 30, 2025 Accumulated Amortization | December 31, 2024 Gross Carrying Amount | December 31, 2024 Accumulated Amortization | | :--- | :--- | :--- | :--- | :--- | | Customer related | $5,100 | $(2,451) | $5,100 | $(2,167) | | Trademarks and trade names | $150 | $(37) | $150 | $(32) | | Other | $500 | $(123) | $500 | $(106) | | Total definite-lived intangible assets | $5,750 | $(2,611) | $5,750 | $(2,305) | Estimated Amortization Expense for Intangible Assets (in thousands) | (in thousands) | Amount | | :--- | :--- | | Remainder of 2025 | $306 | | 2026 | $468 | | 2027 | $375 | | 2028 | $310 | | 2029 | $277 | | 2030 | $248 | | Thereafter | $1,155 | Deferred Charges, Net (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deferred charges, gross | $401 | $326 | | Accumulated amortization of deferred charges | $(25) | $(17) | | Deferred charges, net | $376 | $309 | Note 8: Debt This note details the Company's short-term debt and credit facilities, including recent amendments that reduced the revolving loan commitment and released liens on divested assets, while confirming compliance with debt covenants - The Company entered into a $1.1 million note payable on June 21, 2025, with an annual interest rate of 3.68% maturing April 1, 2026, for insurance premium financing[57] - The Fourth Credit Facility Amendment (April 4, 2025) reduced the maximum revolving loan commitment from $60 million to $30 million and released liens on BRISMET assets[58] - The Fifth Credit Facility Amendment (June 30, 2025) released liens on ASTI assets; the maximum revolving loan commitment remains $30 million, with $13.4 million remaining availability as of June 30, 2025[59][62] - The Company was in compliance with all financial debt covenants as of June 30, 2025, and had no debt outstanding under its credit facilities[61][62] Note 9: Leases This note describes the Company's operating and finance leases, highlighting recent amendments to the Master Lease Agreement due to divestitures, which resulted in a gain on modification and reduced lease liabilities - The Fifth Master Lease (April 4, 2025) removed the BRISMET facility, resulting in a $0.5 million gain on modification and a decrease in right-of-use assets and operating lease liabilities[65] - The Sixth Master Lease (June 30, 2025) removed the ASTI facility, leading to a $4.0 million decrease in right-of-use assets and operating lease liabilities[66] Total Lease Cost (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating lease cost | $768 | $980 | $1,721 | $1,960 | | Finance lease cost (Amortization) | $75 | $78 | $151 | $160 | | Finance lease cost (Interest) | $18 | $22 | $36 | $44 | | Sublease income | $(114) | $(92) | $(261) | $(184) | | Total lease cost | $747 | $988 | $1,647 | $1,980 | Future Expected Cash Receipts from Sublease (in thousands) | (in thousands) | Sublease Receipts | | :--- | :--- | | Remainder of 2025 | $293 | | 2026 | $594 | | 2027 | $606 | | 2028 | $618 | | 2029 | $631 | | Thereafter | $4,597 | | Total sublease receipts | $7,339 | Undiscounted Future Minimum Lease Payments (in thousands) | (in thousands) | Operating | Finance | | :--- | :--- | :--- | | Remainder of 2025 | $1,247 | $180 | | 2026 | $2,481 | $361 | | 2027 | $2,532 | $361 | | 2028 | $2,584 | $303 | | 2029 | $2,637 | $85 | | Thereafter | $18,310 | $— | | Total undiscounted minimum future lease payments | $29,791 | $1,290 | Note 10: Shareholders' Equity This note details the Company's share repurchase program, including the authorization of a new program in February 2025 and the number of shares repurchased during the reported periods - A new share repurchase program was authorized on February 17, 2025, allowing for the repurchase of up to 1.0 million shares of common stock over 24 months[74] - As of June 30, 2025, the Company had 339,752 shares remaining under its share repurchase authorization[74] Shares Repurchased (Three and Six Months Ended June 30) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Number of shares repurchased | 644,171 | 15,233 | 660,993 | 31,563 | | Average price per share | $12.15 | $10.25 | $12.17 | $10.10 | | Total cost of shares repurchased | $7,848,761 | $156,577 | $8,063,383 | $319,798 | Note 11: Earnings Per Share This note provides the computation of basic and diluted earnings per share, distinguishing between continuing and discontinued operations Earnings Per Share Computation (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss from continuing operations | $(2,447) | $(1,450) | $(4,453) | $(4,931) | | Net income (loss) from discontinued operations | $8,733 | $524 | $8,446 | $(1,488) | | Net income (loss) | $6,286 | $(926) | $3,993 | $(6,419) | | Basic EPS from continuing operations | $(0.25) | $(0.14) | $(0.45) | $(0.49) | | Diluted EPS from continuing operations | $(0.25) | $(0.14) | $(0.45) | $(0.49) | | Basic EPS from discontinued operations | $0.90 | $0.05 | $0.85 | $(0.15) | | Diluted EPS from discontinued operations | $0.90 | $0.05 | $0.85 | $(0.15) | | Basic Net income (loss) per share | $0.65 | $(0.09) | $0.40 | $(0.64) | | Diluted Net income (loss) per share | $0.65 | $(0.09) | $0.40 | $(0.64) | Note 12: Income Taxes This note presents the Company's income tax benefit and effective tax rates for continuing operations, explaining the factors influencing the rates, particularly the impact of valuation allowances Income Tax Benefit and Effective Tax Rates (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Income tax benefit | $(89) | $(372) | $(89) | $(1,393) | | Effective income tax rate | 2.1% | 20.4% | 2.0% | 22.0% | - The effective tax rate for continuing operations was lower than the U.S. statutory rate of 21.0% in 2025 primarily due to the valuation allowance over federal and U.S. state deferred tax assets[80] Note 13: Commitments and Contingencies This note addresses the Company's legal proceedings, including the resolution of a specific lawsuit in January 2025 and general involvement in various legal actions arising from normal business activities - In January 2025, the Company resolved a lawsuit asserting claims for breach of contracts, which had an estimated liability of $0.4 million as of December 31, 2024[82] - The Company is involved in various unresolved legal actions, administrative proceedings, and claims in the ordinary course of business, but does not believe any would have a material adverse effect[83] Note 14: Industry Segments This note identifies Specialty Chemicals as the Company's sole reportable segment, providing disaggregated financial information for this segment and corporate/other items, which are evaluated by the chief operating decision maker - Ascent Industries Co. has one reportable segment: Specialty Chemicals, which produces critical ingredients and process aids for various industries[84] Segment Performance (Three Months Ended June 30, 2025) (in thousands) | (in thousands) | Specialty Chemicals | Corporate & Other | Total Continuing Operations | | :--- | :--- | :--- | :--- | | Net sales | $18,652 | $— | $18,652 | | Gross profit | $4,187 | $679 | $4,866 | | Selling, general and administrative expense | $2,672 | $3,772 | $6,444 | | Net income (loss) | $1,499 | $(3,946) | $(2,447) | Segment Performance (Six Months Ended June 30, 2025) (in thousands) | (in thousands) | Specialty Chemicals | Corporate & Other | Total Continuing Operations | | :--- | :--- | :--- | :--- | | Net sales | $36,486 | $— | $36,486 | | Gross profit | $7,933 | $— | $7,933 | | Selling, general and administrative expense | $5,572 | $5,743 | $11,315 | | Net income (loss) | $2,237 | $(6,690) | $(4,453) | Note 15: Subsequent Events This note discloses the enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, which introduces changes to U.S. federal tax law, and states that the Company is currently evaluating its impact on future periods - The U.S. government enacted the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, which includes changes to U.S. federal tax law such as expensing R&D and capital expenditures, 100% bonus depreciation, and increased CHIPS and Science Act investment tax credit[91] - The new law did not impact the Company's financial condition or results of operations during Q2 2025, and its impact on future periods is currently being evaluated[91] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a comprehensive discussion and analysis of Ascent Industries Co.'s consolidated operating results, liquidity, and capital resources for the three and six months ended June 30, 2025 and 2024 - Ascent Industries Co. completed its transformation to a pure-play specialty chemicals platform with the divestitures of its final remaining operating tubular assets in ASTI and BRISMET during Q2 2025[95] - The discussion and analysis is structured into Executive Overview, Results of Operations and Non-GAAP Financial Measures, Liquidity and Capital Resources, Material Cash Requirements from Contractual and Other Obligations, and Critical Accounting Policies and Estimates[98] Executive Overview - Ascent Industries Co. is a specialty chemicals platform focused on the development, production, and distribution of tailored, performance-driven chemical solutions[93] - The Company completed its transformation to a pure-play specialty chemicals platform with the divestitures of ASTI and BRISMET in Q2 2025[95] - The divestiture of ASTI generated approximately $16 million in cash proceeds and a preliminary, pretax gain on sale of $4.6 million[96] - The divestiture of BRISMET generated approximately $45 million in cash proceeds and a preliminary, pretax gain on sale of $4.4 million[97] Macroeconomic Events - The Company monitors macroeconomic trends such as key material inflation, tariffs, and potential new tariffs, working with suppliers to mitigate supply chain challenges and cost volatility[99] - Most raw materials are domestically sourced, and the Company does not expect these factors to result in a material negative effect on net sales or profitability for the remainder of fiscal year 2025[99] Results of Operations Consolidated Performance Summary (Continuing Operations) (in millions) | Metric | Q2 2025 | Q2 2024 | Change (%) | YTD 2025 | YTD 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $18.7 | $21.5 | -13.1% | $36.5 | $41.8 | -12.6% | | Gross profit | $4.9 | $2.8 | +73.0% | $7.9 | $4.2 | +88.9% | | Gross profit (% of sales) | 26.1% | 13.1% | +13.0 pp | 21.7% | 10.1% | +11.6 pp | | SG&A expense | $6.4 | $4.6 | +39.1% | $11.3 | $10.5 | +7.6% | | SG&A expense (% of sales) | 34.5% | 21.4% | +13.1 pp | 31.0% | 25.1% | +5.9 pp | | Operating loss | $(2.7) | $(1.8) | +50.0% | $(4.7) | $(6.3) | -25.4% | - The decrease in net sales was primarily driven by a 29.6% decrease in pounds shipped for Q2 2025 and a 27.4% decrease for YTD 2025, partially offset by increases in average selling prices (23.1% for Q2, 19.2% for YTD)[100][101] - Gross profit increases were primarily attributable to continued sourcing improvements resulting in lower raw material costs and reductions in other production-related costs[102] Specialty Chemicals Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross profit | $4.2 | $2.9 | $7.9 | $4.5 | | Gross profit (% of sales) | 22.4% | 13.6% | 21.7% | 10.7% | | Operating income (loss) | $1.5 | $0.4 | $2.3 | $(1.0) | - Unallocated corporate and other expenses increased by $0.9 million (39.4%) to $3.1 million in Q2 2025 and by $0.5 million (8.9%) to $5.7 million in YTD 2025, primarily due to increases in salaries, wages, benefits, professional fees, taxes, and insurance expenses, partially offset by decreases in corporate allocation expense related to divestitures[110][111] - The effective tax rate for continuing operations was 2.1% for Q2 2025 and 2.0% for YTD 2025, lower than the U.S. statutory rate of 21.0% primarily due to the valuation allowance over federal and U.S. state deferred tax assets[113] Non-GAAP Financial Measures - The Company uses non-GAAP financial measures, EBITDA and Adjusted EBITDA, to supplement GAAP results, believing they are useful for evaluating operating performance and comparing financial results between periods[114][115] Consolidated EBITDA and Adjusted EBITDA from Continuing Operations (in thousands) | ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss from continuing operations | $(2,447) | $(1,450) | $(4,453) | $(4,931) | | EBITDA | $(1,505) | $(586) | $(2,267) | $(3,816) | | Adjusted EBITDA | $(335) | $(283) | $(802) | $(3,430) | | Adjusted EBITDA (% of sales) | (1.8)% | (1.3)% | (2.2)% | (8.2)% | Specialty Chemicals EBITDA and Adjusted EBITDA (in thousands) | ($ in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $1,499 | $409 | $2,237 | $(1,049) | | EBITDA | $2,545 | $1,572 | $4,415 | $1,256 | | Specialty Chemicals Adjusted EBITDA | $2,540 | $1,700 | $4,510 | $1,410 | | % of segment sales | 13.6% | 7.9% | 12.4% | 3.4% | Liquidity and Capital Resources - As of June 30, 2025, the Company held $60.5 million in cash and cash equivalents and had $13.4 million of remaining available capacity on its revolving line of credit[118] Cash Flows from Continuing Operations (Six Months Ended June 30) (in thousands) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Operating activities | $(8,941) | $752 | | Investing activities | $(466) | $(458) | | Financing activities | $(7,473) | $87 | | Net decrease in cash and cash equivalents | $(16,880) | $381 | - The increase in cash used in operating activities for YTD 2025 was primarily driven by changes in working capital, including a $4.9 million decrease in cash generated by accounts receivable due to escrow receivables from divestitures[120] - Net cash used in financing activities increased primarily due to increased repurchases of common stock, with 660,993 shares repurchased for $8.06 million YTD 2025[122][128] - The Company has a $1.1 million note payable (3.68% interest, maturing April 1, 2026) and its credit facility's maximum revolving loan commitment was reduced to $30 million, with no debt outstanding under it as of June 30, 2025[123][124][125][126] Other Financial Measures | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 6.6 | 2.8 | | Return on average equity | (6.9)% | (34.0)% | Material Cash Requirements from Contractual and Other Obligations - As of June 30, 2025, operating and finance lease obligations totaled $21.0 million, with $1.3 million payable within 12 months[130] - The Company expects capital spending to be as much as $2.1 million for the remainder of fiscal 2025[130] - The Company has no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on its financial position[130] Critical Accounting Policies and Estimates - There have been no significant changes in the Company's significant accounting policies or critical accounting estimates since the end of fiscal 2024[131] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Ascent Industries Co. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and is therefore not required to provide information on quantitative and qualitative disclosures about market risk[132] Item 4. Controls and Procedures This section reports that the Company's disclosure controls and procedures were not effective as of June 30, 2025, due to previously identified material weaknesses in internal control over financial reporting, primarily related to IT general controls - The Company's disclosure controls and procedures were not effective as of June 30, 2025, due to previously reported material weaknesses in internal control over financial reporting[133] - Material weaknesses, first identified in 2021 and 2022, remain unremediated as of June 30, 2025, due to continued ineffectiveness of IT general controls[134][135] - Ongoing remediation efforts include enhancing corporate oversight, engaging external advisors for IT general controls, formalizing IT policies, enhancing review controls for financial processes, and improving inter-departmental communication[135][136] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section incorporates by reference information on legal proceedings from Note 13, indicating the Company's involvement in various unresolved legal actions, administrative proceedings, and claims in the ordinary course of business - Information pertaining to legal proceedings is incorporated by reference from Note 13 - Commitments and Contingencies[139] - The Company and its subsidiaries are involved in various unresolved legal actions, administrative proceedings, and claims in the ordinary course of business, including product liability, commercial, employment, workers' compensation, and environmental matters[139] Item 1A. Risk Factors This section states that there have been no material changes in the Company's assessment of risk factors since its Annual Report on Form 10-K for the year ended December 31, 2024 - There were no material changes in the Company's assessment of risk factors as discussed in its Annual Report on Form 10-K for the year ended December 31, 2024[140] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides a table detailing the Company's common stock repurchases during the three months ended June 30, 2025, under its authorized share repurchase program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Number of Shares that May Yet Be Purchased under the Program | | :--- | :--- | :--- | :--- | :--- | | April 1, 2025 - April 30, 2025 | 54,543 | $12.79 | 54,543 | 929,380 | | May 1, 2025 - May 31, 2025 | 539,796 | $12.04 | 539,796 | 389,584 | | June 1, 2025 - June 30, 2025 | 49,832 | $12.70 | 49,832 | 339,752 | | As of June 30, 2025 | 644,171 | $12.15 | 644,171 | 339,752 | - A new share repurchase program was authorized on February 17, 2025, allowing for the repurchase of up to 1.0 million shares of the Company's outstanding common stock, expiring in February 2027[142] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[143] Item 4. Mine Safety Disclosures This section indicates that there are no mine safety disclosures to report - There are no mine safety disclosures[144] Item 5. Other Information This section reports that no directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the three and six months ended June 30, 2025 - None of the Company's directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) during the three and six months ended June 30, 2025[145] Item 6. Exhibits This section lists the exhibits filed as part of this Quarterly Report on Form 10-Q, including various certifications and XBRL-related documents - Exhibits include Rule 13a-14(a)/15d-14(a) Certifications of the Chief Executive Officer and Chief Financial Officer, Certifications Pursuant to 18 U.S.C. Section 1350, and various XBRL Instance Documents[146] Signatures This section contains the required signatures, certifying the filing of the report on behalf of Ascent Industries Co. by its President and Chief Executive Officer and Chief Financial Officer - The report is signed by J. Bryan Kitchen, President and Chief Executive Officer, and Ryan Kavalauskas, Chief Financial Officer, on August 6, 2025[150][151]