Cabot (US:CBT)2025-11-24 15:25Financial Performance - Net sales and other operating revenues decreased by $281 million in fiscal 2025 compared to fiscal 2024, driven by lower volumes in the Reinforcement Materials segment ($125 million) and less favorable pricing and product mix in both segments ($160 million combined) [186] - Gross profit decreased by $20 million in fiscal 2025 compared to fiscal 2024, primarily due to lower volumes in the Reinforcement Materials segment, partially offset by higher volumes in the Performance Chemicals segment [187] - Income (loss) from operations before income taxes and equity in earnings of affiliated companies increased in fiscal 2025 compared to fiscal 2024, primarily due to lower losses from currency devaluations in Argentina and higher segment EBIT in Performance Chemicals [185] - The decrease in net sales was attributed to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment [186] - Net income attributable to Cabot Corporation decreased to $331 million in fiscal 2025 from $380 million in fiscal 2024, primarily due to a higher provision for income taxes [196] - Total segment EBIT for fiscal 2025 was $702 million, slightly up from $701 million in fiscal 2024 [198] - Sales in Reinforcement Materials decreased by $269 million in fiscal 2025, totaling $2,341 million, primarily due to lower volumes and less favorable pricing [202] - EBIT in Performance Chemicals increased by $30 million in fiscal 2025, totaling $194 million, driven by higher volumes and lower selling and administrative expenses [205] Expenses and Cost Management - Selling and administrative expenses decreased from $283 million in fiscal 2024 to $260 million in fiscal 2025 [187] - Selling and administrative expenses decreased by $23 million in fiscal 2025 compared to fiscal 2024, primarily due to cost management efforts [188] - Research and technical expenses decreased by $4 million in fiscal 2025, totaling $59 million, compared to $63 million in fiscal 2024 [188] - Interest and dividend income decreased by $5 million in fiscal 2025, totaling $27 million, primarily due to lower interest rates [189] - Interest expense decreased by $5 million in fiscal 2025, totaling $76 million, primarily due to lower interest rates on short-term borrowings [189] - Other expense decreased by $29 million in fiscal 2025, totaling $(7) million, primarily due to lower foreign currency losses in Argentina [190] Cash Flow and Liquidity - As of September 30, 2025, the liquidity position increased by $75 million, with cash and cash equivalents of $258 million and borrowing availability of $1.2 billion [207] - Cash provided by operating activities totaled $665 million in fiscal 2025, down from $692 million in fiscal 2024 [214] - Cash flows from investing activities consumed $298 million in fiscal 2025, compared to $235 million in fiscal 2024, primarily for capital expenditures [217] - Financing activities consumed $336 million in cash in fiscal 2025, down from $415 million in fiscal 2024, with significant repurchases of common stock totaling $168 million [220] - The company repurchased approximately 1.8 million shares for $156 million in fiscal 2025, compared to 1.7 million shares for $159 million in fiscal 2024 [223] - Cash dividends paid were $1.76 per share in fiscal 2025, totaling $96 million, compared to $1.66 per share totaling $93 million in fiscal 2024 [224] Capital Expenditures and Future Outlook - Capital expenditures for fiscal 2026 are expected to be between $200 million and $250 million, focusing on sustaining and compliance projects [219] - The company had $130 million in borrowings outstanding under the Euro Credit Agreement as of September 30, 2025, with no outstanding borrowings under the U.S. Credit Agreement [211] - The weighted-average interest rate on fixed-rate long-term debt was 4.29% as of September 30, 2025 [222] Foreign Currency and Taxation - The assessment of deferred tax assets is conducted quarterly, with valuation allowances established when it is more likely than not that some or all of the deferred tax assets are not realizable [168] - The company recorded a significant reserve for respirator liability claims, with potential developments that could materially affect the estimate of liabilities [171] - Goodwill is subject to annual impairment testing, with significant assumptions including discount rates and forecasted results for the applicable reporting unit [172] - Foreign currency translations increased segment EBIT by $10 million in fiscal 2025, while in fiscal 2024, it decreased EBIT by $5 million [238] - The company recognized net foreign exchange losses of $8 million in fiscal 2025, compared to $46 million in fiscal 2024, largely due to changes in the Argentine peso [239]