Trinseo(US:TSE)2025-11-07 16:34Financial Performance - Trinseo reported a net loss of $109.7 million for Q3 2025, compared to a net loss of $87.3 million in Q3 2024, reflecting a 15% year-over-year decline [149][161]. - Adjusted EBITDA for Q3 2025 was $30.4 million, down from $80.6 million in Q3 2024, impacted by low demand and pricing pressures [149][161]. - Net sales decreased by 14% year-over-year to $743.2 million in Q3 2025, driven by a 7% decline in sales volumes and a 9% decrease in pricing [161][163]. - The gross profit for Q3 2025 was $37.4 million, down from $80.6 million in Q3 2024, indicating a significant margin compression [161][165]. - Adjusted EBITDA for the nine months ended September 30, 2025 was $136.8 million, a decrease from $177.9 million in the same period of 2024 [211]. - Free Cash Flow for the nine months ended September 30, 2025 was $(160.0) million, compared to $(141.4) million in 2024 [225]. Cost Management - The cost of sales decreased by 10% to $705.8 million in Q3 2025, primarily due to lower pricing and volumes [161][164]. - Selling, general and administrative expenses (SG&A) decreased by 35% to $63.2 million in Q3 2025, largely due to restructuring cost reductions [161][166]. - The company recognized $13.8 million for accelerated amortization of capitalized software assets related to its ERP system transition during the three months ended September 30, 2025 [212]. Restructuring and Strategic Initiatives - The company approved a restructuring plan to close MMA production operations in Italy, expecting pre-tax charges of $80.0 million to $100.0 million [151]. - Trinseo suspended its quarterly dividend of $0.01 per share, aiming to save approximately $1.5 million annually [152]. - The company aims to enhance free cash flow through disciplined working capital management and restructuring initiatives [182]. Debt and Liquidity - The company executed a Transaction Support Agreement to refinance near-term maturities and extend debt maturity to 2028 [152][153]. - As of September 30, 2025, the company had liquidity of $346.4 million, consisting of $102.2 million in cash and cash equivalents and $244.2 million available for borrowing [229]. - The Company redeemed $446.5 million of its 2029 Senior Notes and issued $379.5 million of 7.625% 2029 Refinance Senior Notes maturing on May 3, 2029 [234]. - The Company deferred $46.3 million of interest payable during the nine months ended September 30, 2025, capitalizing it as long-term debt [239]. - The Company has near-term access to sufficient liquidity to manage through ongoing macroeconomic challenges for at least the next twelve months [249]. Segment Performance - Engineered Materials segment net sales decreased by 7% to $273.5 million for the three months ended September 30, 2025, with Adjusted EBITDA increasing by 1% to $33.8 million [187]. - Latex Binders segment net sales decreased by 18% to $198.3 million for the three months ended September 30, 2025, with Adjusted EBITDA declining by 34% to $16.9 million [193]. - Polymer Solutions segment net sales decreased by 18% to $271.4 million for the three months ended September 30, 2025, with Adjusted EBITDA down by 82% to $4.1 million [199]. - Americas Styrenics segment reported Adjusted EBITDA of $(2.4) million for the three months ended September 30, 2025, a decrease of 160% due to costs from an unplanned outage [205]. Future Outlook - Fourth quarter Adjusted EBITDA is expected to be comparable to the third quarter of 2025, with free cash flow anticipated to improve due to working capital release [182]. - The Company expects to continue operating at a net loss for the near future despite strategic initiatives aimed at achieving sustainable profitability [248]. - The ability to meet liquidity requirements longer term depends on recovery in the Company's end markets and achieving planned Adjusted EBITDA [250].