Ascent Industries (US:ACNT)2021-08-08 16:00Financial Performance - Consolidated net sales for Q2 2021 were $83.1 million, an increase of $17.0 million, or 25.6%, compared to Q2 2020 [101] - Consolidated gross profit for Q2 2021 increased 223.0% to $14.1 million, representing 17.0% of sales, compared to $4.4 million, or 6.6% of sales in Q2 2020 [101] - The Metals Segment net sales for Q2 2021 totaled $68.1 million, an increase of $16.1 million, or 30.9%, compared to Q2 2020 [104] - The Specialty Chemicals Segment net sales for Q2 2021 totaled $15.0 million, a $0.9 million, or 6.2%, increase from Q2 2020 [109] - The Company recorded net income of $2.9 million, or $0.31 diluted earnings per share, for Q2 2021, compared to a net loss of $7.0 million, or $0.77 diluted loss per share for Q2 2020 [103] - Operating income for Q2 2021 increased $16.7 million, or 182.0%, to $7.5 million compared to an operating loss of $9.2 million in Q2 2020 [108] - Consolidated EBITDA for Q2 2021 was $6.5 million, compared to a loss of $5.7 million in Q2 2020 [117] - Metals Segment Adjusted EBITDA for Q2 2021 was $10.1 million, significantly up from $450,000 in Q2 2020 [119] - Specialty Chemicals Segment Adjusted EBITDA for Q2 2021 was $772,000, down from $2.45 million in Q2 2020 [120] Expenses and Costs - Consolidated selling, general, and administrative expense for Q2 2021 was $8.1 million, or 9.8% of sales, compared to $7.0 million, or 10.7% of sales in Q2 2020 [102] - Selling, general, and administrative expenses for Q2 2021 were $2.0 million, or 13.4% of sales, compared to $0.7 million, or 5.2% of sales in Q2 2020 [110] - Unallocated corporate expenses decreased by $0.2 million, or 14.4%, to $1.4 million in Q2 2021, representing 1.6% of sales [112] - Interest expense decreased to $0.4 million in Q2 2021 from $0.5 million in Q2 2020, attributed to debt refinancing and favorable interest rates [113] Cash Flow and Liquidity - Cash balance increased by $0.6 million to $0.8 million as of June 30, 2021, compared to $0.2 million at December 31, 2020 [114] - Cash provided by operating activities for the six months ended June 30, 2021, was $4,995,000, compared to cash used of $(173,000) for the same period in 2020 [124] - Accounts receivable increased by $12.5 million in the first six months of 2021, leading to a reduction of $10.6 million in operating cash flows [125] - Inventories rose by $5.5 million in the first six months of 2021, resulting in a $4.1 million reduction in operating cash flow [125] - Net cash used in investing activities decreased due to lower capital expenditures and absence of proceeds from equity securities sales, totaling $(425,000) for the first half of 2021 compared to $798,000 in 2020 [126] - Net cash used in financing activities increased to $(4,045,000) in the first half of 2021, primarily due to higher payments on the line of credit and previous term loan refinancing [127] Balance Sheet and Financial Ratios - As of June 30, 2021, total borrowings outstanding were $59.5 million, a decrease of $1.9 million from December 31, 2020 [128] - The current ratio decreased to 3.5 as of June 30, 2021, down from 4.1 at the end of 2020 [132] - Debt to capital ratio improved to 41% as of June 30, 2021, compared to 43% at the end of 2020 [132] - Return on average equity was 4.4% for the twelve months ending June 30, 2021, a significant recovery from (29.2%) in the previous year [132] - Total contractual obligations as of June 30, 2021, amounted to $123,584,000, with significant commitments in operating leases totaling $59,885,000 [135] Operational Changes - The Company permanently ceased operations and divested all remaining assets at the curtailed Palmer facility [98] - Average selling prices in the Metals Segment increased by 7.5% in Q2 2021 compared to Q2 2020 [104] - The Company refinanced and expanded its revolving line of credit to improve liquidity and financial position [98]