Ecovyst (US:ECVT)2022-07-31 16:00Financial Performance - Sales increased by $78.2 million to $225.2 million, driven by higher sales volumes and average selling prices, including favorable sulfur pricing [148]. - Gross profit rose by $21.4 million to $59.9 million, primarily due to increased sales volumes and favorable pricing, partially offset by higher manufacturing costs [149]. - Operating income increased by $15.8 million to $27.4 million, a 136.2% increase compared to the previous year [150]. - Total sales for the three months ended June 30, 2022, were $225.2 million, an increase of $78.2 million or 53.2% from $147.0 million in the same period last year [152]. - Gross profit rose to $59.9 million, up $21.4 million or 55.6% from $38.5 million year-over-year [155]. - Ecoservices sales increased by $72.2 million or 59.8%, reaching $193.0 million, driven by higher average selling prices and increased volumes [153]. - Adjusted EBITDA for Ecoservices was $60.0 million, an increase of $19.5 million or 48.1% compared to $40.5 million in the prior year [167]. - Net income attributable to Ecovyst was $19.2 million for the three months ended June 30, 2022, compared to a net loss of $1.5 million in the same period last year [165]. - Net income from continuing operations was $19.2 million for the three months ended June 30, 2022, compared to a loss of $7.9 million in the same period of 2021 [1]. - Total sales for the six months ended June 30, 2022, were $404.9 million, an increase of $131.3 million or 48.0% compared to $273.6 million for the same period in 2021 [181]. - Ecoservices sales increased by $126.0 million or 57.0% to $347.0 million, driven by higher average selling prices and increased sales volumes [181]. - Gross profit for the six months ended June 30, 2022, was $107.6 million, an increase of $39.0 million or 56.9% compared to $68.6 million in the prior year [183]. - Operating income rose to $43.9 million, a significant increase of $29.8 million or 211.3% from $14.1 million in the previous year [183]. - Net income attributable to Ecovyst was $27.1 million for the six months ended June 30, 2022, compared to a net loss of $94.2 million for the same period in 2021 [194]. - Adjusted EBITDA for the six months ended June 30, 2022, was $132.1 million, up from $95.0 million in the prior year, representing a 39.0% increase [198]. Expenses and Costs - Other operating expenses rose to $9.7 million, an increase of $4.7 million or 94.0% compared to $5.0 million in the previous year [157]. - Selling, general and administrative expenses were $22.8 million, a slight increase of $0.9 million or 4.1% from $21.9 million year-over-year [156]. - Interest expense for the three months ended June 30, 2022, was $8.9 million, slightly up from $8.7 million in the same period of 2021 [1]. - The company reported a depreciation and amortization expense of $19.7 million for the three months ended June 30, 2022, compared to $20.0 million in the same period of 2021 [1]. - Selling, general and administrative expenses increased to $46.3 million, up $2.3 million or 5.2% compared to $44.0 million for the same period in 2021 [184]. - Other operating expenses increased to $17.4 million, an increase of $6.9 million or 65.7% compared to $10.5 million in the prior year [185]. Tax and Income - The effective tax rate for the three months ended June 30, 2022, was 27.5%, compared to an unusual rate of (4,371.6)% in the same period last year [164]. - The provision for income taxes was $7.3 million for the three months ended June 30, 2022, compared to $7.7 million in the same period of 2021 [1]. - The effective tax rate for the six months ended June 30, 2022, was 32.4%, compared to (30.9)% for the same period in 2021 [191]. Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2022, totaled $151.2 million, with an additional $84.8 million available under the asset-based lending revolving credit facility, resulting in total available liquidity of $236.0 million [204]. - Cash interest paid for the six months ended June 30, 2022, was approximately $15.8 million, a decrease from $28.8 million in the same period of 2021 [204]. - The company had no borrowings under its revolving credit facility as of June 30, 2022, and was in compliance with all covenants under its debt agreements [204]. - The company expects ongoing cash needs for at least the next twelve months to be met through existing cash, cash flows from operations, and available credit [204]. - Net cash provided by operating activities for the six months ended June 30, 2022, was $52.8 million, an increase from $37.2 million in the same period of 2021 [209]. - Cash used in investing activities was $29.5 million for the six months ended June 30, 2022, compared to $70.0 million in the same period of 2021 [209]. - Net cash used in financing activities was $11.9 million for the six months ended June 30, 2022, compared to $5.0 million in the same period of 2021 [209]. - The unfavorable change in working capital was $51.7 million for the six months ended June 30, 2022, compared to $15.2 million in the same period of 2021 [207]. - Cash generated by operating activities, excluding changes in working capital, increased by $52.2 million compared to the prior year period [209]. Debt and Financing - The company may seek opportunities to repurchase, refinance, or reprice its debt, subject to market conditions [211]. - Total debt as of June 30, 2022, was $891.0 million, a slight decrease from $895.5 million as of December 31, 2021 [211]. - The total long-term debt, excluding the current portion, was $869.4 million as of June 30, 2022, compared to $872.8 million as of December 31, 2021 [211]. - A one percent change in assumed interest rates for variable interest credit facilities would have an annual impact of approximately $8.9 million on interest expense [204]. - The company has interest rate caps on $500.0 million of notional variable-rate debt with a cap rate of 0.84% through July 2022 [204]. Strategic Initiatives - The company plans to continue focusing on market expansion and new product development to drive future growth [1]. - The company continues to monitor the impact of the Russia-Ukraine conflict but reports no significant exposure in those markets [133].