KRONOS WORLDWIDE INC
For the period ended Mar 31, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
KRO$7.46+4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001104659-25-107746
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001104659-26-056246
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 74 current paragraphs.
34 unchanged; 24 reworded; 14 added; 30 removed; 7 previous and 2 current paragraphs rearranged.
Tables are not compared: 57 previous and 48 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
We reported a net loss of $4.8 million, or $.04 per share, in the first quarter of 2026 compared to net income of $18.1 million, or $.16 per share, in the first quarter of 2025. Net income decreased in the first quarter of 2026 compared to the prior year period primarily due to lower income from operations as a result of lower average TiO 2 selling prices and lower production volumes, partially offset by higher sales volumes and lower production costs driven primarily by cost reduction initiatives implemented in the fourth quarter of 2025 to structurally realign our operations, as well as lower raw material and energy costs. Comparability of our results was also impacted by the effects of changes in currency exchange rates.
Current report
Our net loss for the three months ended March 31, 2026 includes an income tax expense of $2.0 million ($.02 per share) to recognize an uncertain tax position related to a German tax audit.
Current report
During the fourth quarter of 2025, we implemented cost reduction initiatives, including workforce reductions and other measures, to permanently improve our cost structure and enable more efficient operation of our facilities at lower production rates for extended periods. As a result, beginning in the first quarter of 2026, our normal production capacity range has been adjusted to reflect our production capabilities under this new cost structure.
Current report
Our sales volumes increased 4% in the first quarter of 2026 as compared to the first quarter of 2025 primarily due to higher sales volumes in our North American, Latin American and export markets partially offset by lower sales volumes in our European market. The incremental market share gains we achieved in our European market during the second half of 2025, primarily as a result of competitor plant closures, continued into the first quarter of 2026. However, gains were not sufficient to offset the underlying decline in overall European demand.
Current report
Cost of sales and gross margin-Cost of sales increased by $43.5 million, or 11%, in thefirst quarter of 2026 compared to thefirst quarter of 2025 due to the effects of a 4% increase in sales volumesand the unfavorable impact from changes in currency exchange rates, partially offset by lower production costs driven primarily by the cost reduction initiatives as well as lower raw material and energy costs. In addition, unabsorbed fixed costs were not material in the first quarter of 2026 compared to $10 million of unabsorbed fixed costs in the first quarter of 2025.
Current report
Our cost of sales as a percentage of net sales increased to 84% in the first quarter of 2026 compared to 78% in the same period of 2025, as the unfavorable impact of lower average TiO 2 selling prices more than offset the favorable effects of lower production costs.
Current report
Selling, general and administrative expense- Selling, general and administrative expense increased $2.0 million, or 3%, in the first quarter of 2026 compared to the first quarter of 2025 as the negative impact of currency exchange rates exceeded the benefits of lower costs during the quarter. Excluding the effects of currency exchange rates, we realized lower selling, general and administrative expenses as a result of (i) realization of cost savings as a result of the fourth quarter of 2025 restructuring, (ii) lower warehousing costs due to lower average finished products inventory volumes and (iii) non-recurring distribution costs incurred in the first quarter of 2025 associated with tariff mitigation strategies. Selling, general and administrative expense as a percentage of net sales decreased to 12% in thefirst quarter of 2026 compared to 13% in the first quarter of 2025 due to the effects of higher sales.
Current report
During the first quarter of 2026, sales volumes improved compared to the same period in 2025, primarily driven by higher sales volumes in our North American, Latin American, and export markets. While we gained market share in Europe as a result of competitor capacity reductions in 2025, these gains were not sufficient to offset further weakening end-market demand in the region. Although customers remain reluctant to build inventory, order lead times have increased, which provides us with greater flexibility in near- and intermediate-term production planning. Our order backlog at the beginning of 2026 was generally higher than the comparable prior-year period and has continued to show positive trends entering the second quarter. However, overall demand remains below historical levels, and the timing and sustainability of a broader market recovery remain uncertain. We implemented price increases during the first quarter of 2026; however, selling prices remain below 2025 levels, and additional price increases will be required to improve our operating margins.
Current report
During the fourth quarter of 2025, we implemented cost reduction initiatives, including workforce reductions and other measures, to permanently improve our cost structure and enable more efficient operation of our facilities at lower production rates for extended periods. We operated our facilities slightly below normal capacity during the first quarter of 2026. Our operating model balances improved cost efficiency with flexibility to respond to changes in demand. During the first quarter of 2026, we sold through higher cost inventory produced in the fourth quarter of 2025 and expect gross margin to improve as we realize the benefit of lower cost inventory produced during 2026.
Current report
Industry supply conditions tightened during the first quarter of 2026 due to the recent geopolitical conflict in the Middle East and related supply chain disruptions, including sulfuric acid pricing pressures, and higher energy costs, particularly in Europe. As a result, we are beginning to experience higher shipping and production costs driven primarily by increased energy, utility and raw material costs, especially in Europe. These cost pressures are expected to persist as long as uncertainty related to the conflict in the Middle East and broader global conditions continue. In response to rising costs, we implemented surcharges in most major markets and announced
Current report
price increases effective in the second quarter of 2026. We expect TiO₂ selling prices to continue to rise during 2026, which would help mitigate increases in distribution, raw material, energy, and other production costs, although margins will remain below historical levels.
Current report
We are focused on improving operating margins through pricing actions, disciplined cost management, and continued execution of our operating cost structural realignment initiatives. We are also continuing to pursue targeted market share opportunities in regions and markets impacted by competitor curtailments, closures, logistical disruptions, or trade measures such as tariffs or duties that have reduced the competitiveness of low-cost imports. These actions are intended to support improved operating performance while maintaining flexibility in the event of continued demand volatility.
Current report
Liquidity and capital resources remain sufficient to support our operations and planned capital investments. While we typically experience significant seasonal cash usage in the first quarter, we expect cash on hand to improve over the remainder of the year. We will continue to actively manage working capital, including inventories and receivables, to bolster operating cash flows and maintain financial flexibility. We believe our revolver availability, combined with the absence of near-term debt maturities and improved operating cash flows, will provide adequate liquidity for expected working capital needs and capital allocation requirements.
Current report
Availability under the Global Revolver is subject to a borrowing base calculation, as defined in the agreement. The borrowing base calculated for the period ended March 31, 2026 was approximately $287 million.
Removed paragraphs (30)
Previous report
We reported a net loss of $37.0 million, or $.32 per share, in the third quarter of 2025 compared to net income of $71.8 million, or $.62 per share, in the third quarter of 2024. For the first nine months of 2025, we reported a net loss of $28.1 million or $.24 per share, compared to net income of $99.4 million, or $.86 per share, in the first nine months of 2024. Our net income for the three and nine months ended September 30, 2024 includes a non-cash, pre-tax gain of $64.5 million ($50.9 million or $.44 per share, net of income tax expense) resulting from the measurement of our investment in our joint venture, as discussed below. Income from operations decreased in the third quarter of 2025 as compared to the third quarter of 2024 primarily due to lower production volumes resulting in lower absorption of our fixed production costs and lower average TiO 2 selling prices. Income from operations for the first nine months of 2025 was lower than income from operations for the first nine months of 2024 primarily due to lower production volumes resulting in lower absorption of our fixed production costs, lower average TiO 2 selling prices and higher distribution and warehousing costs incurred primarily in the first quarter of 2025 to position finished goods products inventory in the U.S. in response to anticipated U.S federal government tariff announcements and an overall increase in finished goods inventory in 2025 compared to 2024. Our results of operations in the first nine months of 2025 were significantly impacted by softening customer demand that began in early 2025 resulting in our decision to reduce our operating rates at our production facilities. Net income for the nine months ended September 30, 2024 includes an aggregate charge of $1.5 million ($1.1 million, or $.01 per share, net of income tax benefit) related to a write-off of deferred financing costs. Comparability of our results was also impacted by the effects of changes in currency exchange rates. See Note 6 to our Condensed Consolidated Financial Statements.
Previous report
As previously reported, effective July 16, 2024 (“Acquisition Date”), we acquired the 50% joint venture interest in Louisiana Pigment Company, L.P. (“LPC”) previously held by Venator Investments, Ltd. (“Venator”). Prior to the acquisition, we held a 50%
Previous report
joint venture interest in LPC. Following the acquisition, LPC became a wholly-owned subsidiary of ours. We accounted for the acquisition as a business combination. The results of operations of LPC have been included in our results of operations beginning as of the Acquisition Date. See Note 16 to our Condensed Consolidated Financial Statements.
Previous report
Our net loss for the three and nine months ended September 30, 2025 includes a non-cash deferred income tax expense of $19.3 million ($.17 per share) to reduce our net German deferred tax asset as a result of the rate reduction and a non-cash, pre-tax gain of $4.6 million ($3.6 million or $.03 per share, net of income tax expense) resulting from the remeasurement of our earn-out liability. See Note 11 and 16 to our Condensed Consolidated Financial Statements.
Previous report
We operated our production facilities at 93% of practical capacity utilization in the first nine months of 2024. In the first nine months of 2025, our practical capacity utilization was 85% as wereduced operating rates at certain of our manufacturing facilities in response to lower demand.
Previous report
The following table shows our capacity utilization rates during 2024 and 2025.
Previous report
Our sales volumes decreased 3% in the third quarter of 2025 as compared to the third quarter of 2024 primarily due to lower sales volumes in our European and export markets somewhat offset by higher sales volumes in our North American market.
Previous report
Cost of sales and gross margin-Cost of sales increased by $26.4 million, or 7%, in thethird quarter of 2025 compared to thethird quarter of 2024 due to the net effects of unfavorable fixed cost absorption due to reduced operating rates at certain of our manufacturing facilities, higher cost inventory produced in the second quarter relative to the same quarter of 2024 and included in cost of sales in thethird quarter and currency fluctuations (primarily the euro). Our unabsorbed fixed production costs related to decreased production volumes in thethird quarter of 2025 were approximately $27 million. Cost of sales in thethird quarter of 2024 includes a charge of approximately $4 million in non-cash charges related to accelerated depreciation in connection with the closure of our sulfate process line in Canada.
Previous report
Our cost of sales as a percentage of net sales increased to 90% in the third quarter of 2025 compared to 79% in the same period of 2024 primarily due to the unfavorable fixed cost absorption and currency fluctuations, as discussed above.
Previous report
Selling, general and administrative expense- Selling, general and administrative expense in the third quarter of 2025 was comparable to the third quarter of 2024. Our selling, general and administrative expense in the third quarter of 2024 also includes $2.2 million of transaction costs incurred in connection with the LPC acquisition. Selling, general and administrative expense as a percentage of net sales remained consistent at 13% in thethird quarters of 2025 and 2024.
Previous report
Segment profit (loss)- Segment profit decreased by $58.7 million to a segment loss of $15.3 million in the third quarter of 2025 compared to segment profit of $43.4 million in the third quarter of 2024 as a result of the factors impacting gross margin discussed above. We estimate that changes in currency exchange rates increased our segment loss by approximately $4 million in the third quarter of 2025 as compared to the same period in 2024, as discussed in the effects of currency exchange rates section below.
Previous report
Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024
Previous report
*Thousands of metric tons
Previous report
Our sales volumes in the first nine months of 2025 were comparable to the same period in 2024 with higher overall sales volumes in our North American and European markets offset by lower sales volumes in our export market.
Previous report
Cost of sales and gross margin-Cost of sales increased by $33.4 million, or 3%, in the first nine months of 2025 compared to the first nine months of 2024 due to the effectsof approximately$45 million in additional unabsorbed fixed production costs recognized as a result of reduced operating rates at our production facilities somewhat offset by lower production costs of approximately $11 million (primarilyraw materials) and favorable currency fluctuations (primarily the euro). Cost of sales in the first nine months of 2024 includes a charge of approximately $2 million related to workforce reductions and approximately $14 million in non-cash charges primarily related to accelerated depreciation in connection with the closure of our sulfate process line in Canada.
Previous report
Our cost of sales as a percentage of net sales increased to 85% in the first nine months of 2025 compared to 81% in the same period of 2024 primarily due to unfavorable fixed cost absorption somewhat offset by lower production costs and currency fluctuations noted above.
Previous report
Gross margin as a percentage of net sales decreased to 15% in the first nine months of 2025 compared to 19% in the first nine months of 2024. As discussed and quantified above, our gross margin as a percentage of net sales decreased primarily due to the unfavorable effects of lower fixed cost absorption and lower average selling prices.
Previous report
Selling, general and administrative expense- Selling, general and administrative expense increased $10.9 million, or 6%, in the first nine months of 2025 compared to the first nine months of 2024 primarily due to an increase in warehousing costs related to carrying a higher level of overall finished goods inventory volumes in 2025 compared to 2024 in addition to incremental warehousing costs incurred during the first quarter of 2025 to position finished products inventory in the U.S. in response to anticipated U.S. federal government tariff announcements. Our selling, general and administrative expense in the first nine months of 2024 also includes $2.2 million of transactions costs incurred in connection with the LPC acquisition. Selling, general and administrative expense as a percentage of net sales increased 1% in the first nine months of 2025 compared to the same period of 2024 as a result of thefactors described above.
Previous report
Other non-operating income (expense) - We recognized a non-cash gain of $4.6 million in the first nine months of 2025 due to the remeasurement of our earn-out liability in the third quarter of 2025. In the first nine months of 2024, we recognized a gain on the remeasurement of our investment in LPC of $64.5 million as a result of the acquisition. See Note 16 to our Condensed Consolidated Financial Statements. Interest expense in the first nine months of 2025 increased $7.7 million compared to interest expense in the first nine months of 2024 primarily due to higher overall debt levels and higher average interest rates as the result of debt transactions entered into in 2024. Interest expense for the first nine months of 2024 includes a charge of $1.5 million for the write-off of deferred financing costs. See Note 6 to our Condensed Consolidated Financial Statements. We recognized an unrealized loss of $1.1 million in the first nine months of 2025 compared to an unrealized gain of $2.6 million in the first nine months of 2024 related to the change in market price of our marketable equity securities. See Note 5 to our Condensed Consolidated Financial Statements.
Previous report
At December 31, 2024, we had significant German corporate and trade net operating loss (NOL) carryforwards of $449.3 million (deferred tax asset “DTA” of $71.1 million) and $41.8 million (DTA of $4.5 million), respectively. Prior to December 31, 2024, and using all available evidence, we had concluded that no deferred income tax asset valuation allowance was required to be recognized with respect to such carryforwards, principally because (i) such carryforwards have an indefinite carryforward period, (ii) we have utilized a portion of such carryforwards during the most recent three-year period and (iii) we currently expect to utilize the remainder of such carryforwards over the long term. At September 30, 2025, we continue to conclude no valuation allowance is required to be recognized for our German DTAs although prior to the complete utilization of such carryforwards, if we were to generate additional losses in our German operations for an extended period of time, or if applicable laws were to change such that the carryforward periods were more limited, it is possible that we might conclude the benefit of such carryforwards would no longer meet the more-likely-than-not recognition criteria, at which point we would be required to recognize a valuation allowance against some or all of the then-remaining tax benefit associated with the carryforwards.
Previous report
Overall, customer demand remained weak in the third quarter of 2025, continuing the softening trend that began earlier in the year. High interest rates and sustained economic uncertainty, driven by global tariff and trade tensions, continue to contribute to cautious customer spending. We do not expect sales volumes to improve meaningfully in the near-term and, although we believe customer inventory levels remain low, we are taking additional actions in the fourth quarter of 2025 to reduce our inventory levels by further lowering our operating rates to better align with current demand levels. Given the current depressed demand environment and margins, we believe it is prudent to reduce our operating rates in the fourth quarter to reduce inventory and position our plants to improve operating costs at lower utilization rates. These measures are expected to improve operating cash flows as we focus on maximizing liquidity to manage through the current challenging demand market and to be positioned to respond when market dynamics improve.
Previous report
In 2025, the TiO 2 market has experienced significant capacity reductions, including previously announced shutdowns or curtailments by multiple producers, such as recently announced facility closures in China and certain European jurisdictions in the third quarter of 2025. We believe we may gain market share from these developments both from current and potential customers primarily in Europe. Although we believe customer inventories are low, our customers’ near-term outlook remains uncertain. Certain customers have notified us that they intend to curtail production in the fourth quarter due to expected low downstream demand. In North America, downstream demand remains below historical norms across all end-use customers driven by low consumer confidence and lack of housing market mobility driven by high mortgage rates and home prices, which continue to delay the housing market recovery.
Previous report
Given the challenging market environment discussed above, we remain committed to implementing additional cost reduction initiatives to improve our long-term cost structure, to ensure we remain competitive, and to capitalize on potential market share opportunities. We are currently implementing targeted workforce reductions across our operating locations impacting both manufacturing and selling, general and administrative costs. These reductions include union supported employees, which take longer to negotiate, and we cannot yet quantify the impact of such initiatives. However, we expect these workforce reductions will have a more significant financial impact than our 2023 and 2024 reductions. Beyond headcount cost savings, we are reviewing costs with all our partners, suppliers, and vendors which we expect to result in cost reductions that will contribute to our cost savings.
Previous report
Pressure from lower demand and favorable TiO 2 availability has caused our selling prices to decrease since the beginning of 2025. Raw material, energy, and other input costs continue to trend lower, and we expect this moderation to continue through the remainder of 2025 as lower cost inventory works its way through cost of sales. However, we expect fourth quarter operating results to be lower than the third quarter and to report lower operating results for the full year of 2025 as compared to 2024 due to weaker than expected demand, continued pricing pressure, and lower fixed cost absorption as a result of reduced operating rates. The capacity reductions noted above and the implementation of anti-dumping duties in various jurisdictions, among other factors, should lead to
Previous report
pricing upside in 2026. Current profit margins are unsustainable, and we will need to achieve price increases, targeted market share gain opportunities, and successfully execute on our cost reduction efforts noted above to achieve reasonable profit margins.
Previous report
We acquired full control of LPC in July 2024. We believe this acquisition adds value to our customers and enables us to better serve the North American marketplace by expanding our product offerings and increasing sales to new and existing customers while realizing significant synergies, including commercial, overhead, and supply chain optimization. We are in the process of fully integrating the additional LPC production capacity and expect the acquisition to positively impact our earnings. However, soft demand, competitive pressures and additional debt service costs from increased borrowings will limit this impact in the near term. During our planned fourth quarter curtailment, we are investing in technological and manufacturing improvements to the LPC facility which are expected to improve the flexibility, quality, and cost effectiveness of the facility over the long term.
Previous report
In July 2025, we increased the maximum borrowings under our credit facility from $300 million to $350 million to provide additional liquidity for general corporate purposes. In September 2025, we successfully refinanced our €75 million 3.75% Senior Secured Notes due in September 2025 by issuing €75 million in additional 9.50% Senior Secured Notes due 2029 at an effective rate of 7.8%. We expect our cash on hand to improve as we reduce inventory levels over the next several quarters. With no near-term debt maturities, significant borrowing availability under our revolving credit facility, and cash on hand, we believe we are well-positioned to finance our working capital and capital expenditure needs.
Previous report
For comparative purposes, we have also provided comparable prior year numbers below.
Previous report
In September 2025, Kronos International, Inc. (“KII”) issued an additional €75 million principal amount of 9.50% Senior Secured Notes due 2029 (the “Additional Notes”), the proceeds of which were used to refinance the 3.750% Senior Secured Notes that matured in September 2025. During the first three months of 2024, in connection with the exchange of €325 million of our KII 3.75% Senior Secured Notes due September 2025 (the “Old Notes”) for our newly issued €276.174 million KII 9.50% Senior Secured Notes due March 2029 plus additional cash consideration, we paid cash consideration of $52.6 million to certain eligible holders of the Old Notes and borrowed $53.7 million from Contran. In the third quarter of 2024, we issued an additional €75 million principal amount of 9.50% Senior Secured Notes due 2029. See Note 8 to our Consolidated Financial Statements included in our 2024 Annual Report.
Previous report
Effective July 17, 2025, we completed an amendment to our Global Revolver (the “Fourth Amendment”). Among other things, the Fourth Amendment increased the maximum borrowing amount from $300 million to $350 million and increased the Belgian and German sub-limits from €30 million and €60 million to €55 million and €85 million, respectively, allowing greater access to Euro denominated borrowings. The maturity date of the Global Revolver remains July 2029. On September 15, 2025, KII issued Additional Notes, the proceeds of which were used to refinance the 3.75% Senior Secured Notes (€75 million aggregate principal amount) that matured in September 2025. The Additional Notes were issued as additional notes to the existing €351.174 million aggregate principal amount of 9.50% Senior Secured Notes due 2029 issued on February 12, 2024 and July 30, 2024 (the “Existing Notes”). The Additional Notes were issued at a premium of 105.0% of their principal amount, resulting in net proceeds of approximately $90 million after fees and estimated expenses. The Additional Notes are fungible with the Existing Notes, are treated as a single series and have the same terms as the Existing Notes, other than their date of issuance and issue price. See Note 6 to our Condensed Consolidated Financial Statements.
Reworded paragraphs (24)
Previous wording
We are a leading global producer and marketer of value-added titanium dioxide pigments (“TiO 2”). TiO 2 is used for a variety of manufacturing applications, including paints, plastics, paper and other industrial and specialty products. For the nine months ended September 30, 2025, approximately 40% of our sales volumes were sold into European markets. Our production facilities are located in Europe and North America.
Current wording
We are a leading global producer and marketer of value-added titanium dioxide pigments (“TiO 2”). TiO 2 is used for a variety of manufacturing applications, including paints, plastics, paper and other industrial and specialty products. For the three months ended March 31, 2026, approximately 40% of our sales volumes were sold into European markets. Our production facilities are located in Europe and North America.
Previous wording
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Statements in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking in nature and represent management’s beliefs and assumptions based on currently available information. In some cases you can identify forward-looking statements by the use of words such as “believes,” “intends,” “may,” “should,” “could,” “anticipates,” “expects” or comparable terminology, or by discussions of strategies or trends. Although we believe the expectations reflected in such forward-looking statements are reasonable, we do not know if these expectations will be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results. Actual future results could differ materially from those predicted. The factors that could cause our actual future results to differ materially from those described herein are the risks and uncertainties discussed in this Quarterly Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following:
Current wording
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Statements in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking in nature and represent management’s beliefs and assumptions based on currently available information. In some cases you can identify forward-looking statements by the use of words such as “believes,” “intends,” “may,” “should,” “could,” “anticipates,” “expects” or comparable terminology, or by discussions of strategies or trends. Although we believe the expectations reflected in such forward-looking statements are reasonable, we do not know if these expectations will be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results. Actual future results could differ materially from those predicted. The factors that could cause our actual future results to differ materially from those described herein are the risks and uncertainties discussed
Previous wording
The first nine months of 2025 have seen unprecedented global uncertainty related to U.S. trade policies and geopolitical tensions. Our customers have been hesitant to build inventories, given these uncertainties, which has prolonged the market downturn and impacted our sales volumes and pricing momentum. We started 2025 with average TiO 2 selling prices 2% higher than at the beginning of 2024 but our average TiO 2 selling prices declined 6% during the first nine months of 2025. Our average TiO 2 selling prices in the first nine months of 2025 were 2% lower than average prices during the first nine months of 2024. Overall, our sales volumes have been comparable in the first nine months of 2025 and 2024 with higher overall sales volumes in both the European and North American markets offset by lower sales volumes in our export market.
Current wording
We started 2026 with average TiO 2 selling prices lower than at the beginning of 2025; however, our average TiO 2 selling prices increased 2% during the first quarter of 2026. Our average TiO 2 selling prices in the first quarter of 2026 were 6% lower than average TiO 2 selling prices during the first quarter of 2025. Overall, our sales volumes increased in the first quarter of 2026 compared to the same period in 2025 due to higher overall sales volumes in the North American, Latin American and export markets partially offset by lower sales volumes in our European market.
Previous wording
Excluding the effect of changes in currency exchange rates and unabsorbed fixed costs, our cost of sales per metric ton of TiO 2 sold in the third quarter and the first nine months of 2025 was lower as compared to the same periods in 2024 due to decreases in per metric ton production costs.
Current wording
Excluding the effect of changes in currency exchange rates, our cost of sales per metric ton of TiO 2 sold in the first quarter of 2026 was lower as compared to the first quarter of 2025 due to decreases in per metric ton production costs driven primarily by the cost reduction initiatives discussed above, as well as lower raw material and energy costs.
Previous wording
Net sales- Net sales in the third quarter of 2025 decreased 6%, or $27.8 million, compared to the third quarter of 2024 primarily due to the net effects of a 7% decrease in average TiO 2 selling prices (which decreased net sales by approximately $33 million), a 3% decrease in sales volumes (which decreased net sales by approximately $13 million) and changes in product mix (which increased net sales by approximately $4 million). In addition, we estimate that changes in currency exchange rates (primarily the euro) increased our net sales by approximately $14 million in the third quarter of 2025 as compared to the third quarter of 2024. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.
Current wording
Net sales- Net sales in the first quarter of 2026 increased 4%, or $20.0 million, compared to the first quarter of 2025 primarily due to the effects of a 4% increase in sales volumes (which increased net sales by approximately $20 million) and the favorable impact of changes in currency exchange rates (primarily the euro) which we estimate increased our net sales by approximately $30 million. These increases were partially offset by a 6% decrease in average TiO 2 selling prices (which decreased net sales by approximately $30 million). TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.
Previous wording
Gross margin as a percentage of net sales decreased to 10% in the third quarter of 2025 compared to 21% in the third quarter of 2024. As discussed and quantified above, our gross margin as a percentage of net sales decreased primarily due to lower average TiO 2 selling prices and lower production volumes resulting in unfavorable fixed cost absorption.
Current wording
Gross margin as a percentage of net sales decreased to 16% in the first quarter of 2026 compared to 22% in the first quarter of 2025. As discussed and quantified above, our gross margin as a percentage of net sales decreased primarily due to the net effects of higher sales volumes, lower average TiO 2 selling prices, lower production costsand changes in currency exchange rates.
Previous wording
Segment profit- Segment profit decreased by $70.7 million to $37.2 million in the first nine months of 2025 compared to segment profit of $107.9 million in the first nine months of 2024 as a result of the factors impacting gross margin discussed above. We estimate that changes in currency exchange rates increased our segment profit by approximately $5 million in the first nine months of 2025 as compared to the same period in 2024, as discussed in the effects of currency exchange rates section below.
Current wording
Segment profit- Segment profit decreased by $26.5 million to $15.1 million in the first quarter of 2026 compared to $41.6 million in the first quarter of 2025, primarily as a result of the factors impacting gross margin discussed above. We estimate that changes in currency exchange rates decreased segment profit by approximately $6 million in the first quarter of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.
Previous wording
Other non-operating income (expense) - Interest expense in the third quarter of 2025 increased $2.3 million compared to interest expense in the third quarter of 2024 primarily due to higher average debt balances and higher interest rates. See Note 6 to our Condensed Consolidated Financial Statements. We recognized an unrealized loss of $.1 million in the third quarter of 2025 related to the change in marketable equity securities compared to an unrealized gain of $2.2 million in the same period of 2024. In the third quarter of 2025, we recognized a non-cash gain of $4.6 million due to the remeasurement of our earn-out liability. We recognized a gain on the remeasurement of our investment in LPC of $64.5 million in the third quarter of 2024 as a result of the acquisition. See Note 16 to our Condensed Consolidated Financial Statements.
Current wording
Other non-operating income (expense) - Interest expense in the first quarter of 2026 increased by $2.7 million compared to the first quarter of 2025 primarily due to higher average debt balances and higher interest rates. See Note 6 to our Condensed Consolidated Financial Statements. We recognized an unrealized gain of $.3 million in the first quarter of 2026 related to the change in marketable equity securities compared to an unrealized loss of $1.0 million in the same period of 2025.
Previous wording
Income tax expense- We recognized income tax expense of $7.9 million in the third quarter of 2025 compared to income tax expense of $22.7 million in the third quarter of 2024. The difference is primarily due to lower earnings in the third quarter of 2025 and the jurisdictional mix of such earnings, partially offset by the impact of the German tax rate change on our German net deferred tax asset. Our earnings and losses are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of our non-U.S. operations are generally higher than the income tax rates applicable to our U.S. operations. We would generally expect our overall effective tax rate, excluding the effect of any increase or decrease in our deferred income tax asset valuation allowance, changes in our reserve for uncertain tax positions, or tax rate changes to be higher than the U.S. federal statutory tax rate of 21% primarily because of our sizeable non-U.S. operations. See Note 11 to our Condensed Consolidated Financial Statements.
Current wording
Income tax expense- We recognized income tax expense of $2.8 million in the first quarter of 2026 compared to income tax expense of $7.6 million in the first quarter of 2025. The decrease is primarily due to lower earnings in the first quarter of 2026 and the jurisdictional mix of such earnings somewhat offset by a net uncertain tax position of $2.0 million recognized in the first quarter of 2026. Our earnings and losses are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of our non-U.S. operations are generally higher than the income tax rates applicable to our U.S. operations. We would generally expect our overall effective tax rate, excluding the effect of any increase or decrease in our deferred income tax asset valuation allowance, changes in our reserve for uncertain tax positions, or tax rate changes to be higher than the U.S. federal statutory tax rate of 21% primarily because of our sizeable non-U.S. operations. See Note 11 to our Condensed Consolidated Financial Statements.
Previous wording
unfavorably impact reported earnings and may affect the comparability of period-to-period operating results. In addition to the impact of the translation of sales and expenses over time, our non-U.S. operations also generate currency transaction gains and losses which primarily relate to (i) the difference between the currency exchange rates in effect when non-local currency sales or operating costs (primarily U.S. dollar denominated) are initially accrued and when such amounts are settled with the non-local currency, (ii) changes in currency exchange rates during time periods when our non-U.S. operations are holding non-local currency (primarily U.S. dollars), and (iii) relative changes in the aggregate fair value of currency forward contracts held from time to time. We periodically use currency forward contracts to manage a portion of our currency exchange risk, and relative changes in the aggregate fair value of any currency forward contracts we hold from time to time serves in part to mitigate the currency transaction gains or losses we would recognize from the first two items described above.
Current wording
We have substantial operations and assets located outside the United States (primarily in Germany, Belgium, Norway and Canada). The majority of our sales from non-U.S. operations are denominated in currencies other than the U.S. dollar, principally the euro, other major European currencies and the Canadian dollar. A portion of our sales generated from our non-U.S. operations is denominated in the U.S. dollar (and consequently our non-U.S. operations will generally hold U.S. dollars from time to time). Certain raw materials used in all our production facilities, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are incurred primarily in local currencies. Consequently, the translated U.S. dollar value of our non-U.S. sales and operating results are subject to currency exchange rate fluctuations which may favorably or unfavorably impact reported earnings and may affect the comparability of period-to-period operating results. In addition to the impact of the translation of sales and expenses over time, our non-U.S. operations also generate currency transaction gains and losses which primarily relate to (i) the difference between the currency exchange rates in effect when non-local currency sales or operating costs (primarily U.S. dollar denominated) are initially accrued and when such amounts are settled with the non-local currency, (ii) changes in currency exchange rates during time periods when our non-U.S. operations are holding non-local currency (primarily U.S. dollars), and (iii) relative changes in the aggregate fair value of currency forward contracts held from time to time. We periodically use currency forward contracts to manage a portion of our currency exchange risk, and relative changes in the aggregate fair value of any currency forward contracts we hold from time to time serves in part to mitigate the currency transaction gains or losses we would recognize from the first two items described above.
Previous wording
Fluctuations in currency exchange rates had the following effects on our sales and income (loss) from operations for the periods indicated.
Current wording
Fluctuations in currency exchange rates had the following effects on our sales and income from operations for the periods indicated.
Previous wording
The $14 million increase in net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as our euro-denominated sales were translated into more U.S. dollars in 2025 as compared to 2024. The strengthening of the U.S. dollar relative to the Canadian dollar and weakening of the U.S. dollar relative to the Norwegian krone in 2025 did not have a significant effect on our net sales, as a substantial portion of the sales generated by our Canadian and Norwegian operations is denominated in the U.S. dollar.
Current wording
The $30 million increase in net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as our euro-denominated sales were translated into more U.S. dollars in 2026 as compared to 2025. The weakening of the U.S. dollar relative to the Canadian dollar and the Norwegian krone in 2026 did not have a significant effect on our net sales, as a substantial portion of the sales generated by our Canadian and Norwegian operations is denominated in the U.S. dollar.
Previous wording
The $5 million increase in income from operations was comprised of the following:
Current wording
The $6 million decrease in income from operations was comprised of the following:
Previous wording
Our expectations for the TiO 2 industry and our operations are based on certain factors beyond our control. Our operations are affected by global and regional economic, political, and regulatory factors, and we have experienced global market disruptions. Future impacts on our operations will depend on, among other things, future energy costs, the effects of newly enacted tariffs in jurisdictions where we or our customers and suppliers operate, our success in implementing mitigation strategies, and the impact of economic conditions, consumer confidence, and geopolitical events on our operations or those of our customers and suppliers, all of which remain uncertain and cannot be predicted.
Current wording
Our expectations for the TiO 2 industry and our operations are based on a number of factors outside our control. Our operations are affected by global and regional economic, political and regulatory factors, and we have experienced global market disruptions. Future impacts on our operations will depend on, among other things, future energy costs, the effect of newly enacted tariffs in jurisdictions where we or our customers and suppliers operate, our success in implementing mitigation strategies, and the impact of economic conditions, consumer confidence, and geopolitical events on our operations or our customers’ and suppliers’ operations, all of which remain uncertain and cannot be predicted.
Previous wording
Cash used for operating activities was $89.6 million in the first nine months of 2025 compared to cash provided of $23.2 million in the first nine months of 2024. This $112.8 million increase in the amount of cash used for operating activities was primarily due to the net effect of the following:
Current wording
Cash used in operating activities was $51.3 million in the first three months of 2026 compared to cash used of $102.4 million in the first three months of 2025. This $51.1 million decrease in the amount of cash used in operating activities was primarily due to the net effect of the following:
Previous wording
Our capital expenditures of $32.7 million and $17.2 million in the first nine months of 2025 and 2024, respectively, were primarily to maintain and improve the cost effectiveness of our manufacturing facilities.
Current wording
Our capital expenditures of $10.2 million and $12.0 million in the first three months of 2026 and 2025, respectively, were primarily to maintain and improve the cost effectiveness of our manufacturing facilities.
Previous wording
During the first nine months of 2025, we paid dividends of $.05 per share each quarter to stockholders aggregating $17.3 million and during the first nine months of 2024 we paid quarterly dividends of $.43 per share aggregating $49.5 million ($.19 in each of the first two quarters and $.05 per share in the third quarter of 2024).
Current wording
During the first three months of 2026 and 2025, we paid dividends of $.05 per share to stockholders aggregating $5.8 million each period.
Previous wording
During the first nine months of 2025 and 2024, we had net borrowings of $58.7 million and $24.7 million, respectively, on our revolving credit facility.
Current wording
During the first three months of 2026 and 2025, we had net borrowings of $58.9 million and $32.9 million, respectively, on our revolving credit facility.
Previous wording
or payment covenants. For example, the credit agreements allow the lender to accelerate the maturity of the indebtedness upon a change of control (as defined in the agreement) of the borrower. In addition, the credit agreements could result in the acceleration of all or a portion of the indebtedness following a sale of assets outside the ordinary course of business. The terms of all of our debt instruments are discussed in Note 8 to our Consolidated Financial Statements included in our 2024 Annual Report. We are in compliance with all of our debt covenants at September 30, 2025. We believe we will be able to continue to comply with the financial covenants contained in our credit facility through its maturity; however, if future operating results differ materially from our expectations we may be unable to maintain compliance.
Current wording
Our Senior Secured Notes, the Contran Term Loan and our Global Revolver contain a number of covenants and restrictions which, among other things, restrict our ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of our assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of these types. Our credit agreements contain provisions which could result in the acceleration of indebtedness prior to their stated maturity for reasons other than defaults for failure to comply with typical financial or payment covenants. For example, the credit agreements allow the lender to accelerate the maturity of the indebtedness upon a change of control (as defined in the agreement) of the borrower. In addition, the credit agreements could result in the acceleration of all or a portion of the indebtedness following a sale of assets outside the ordinary course of business. The terms of all of our debt instruments are discussed in Note 8 to our Consolidated Financial Statements included in our 2025 Annual Report. We are in compliance with all of our debt covenants at March 31, 2026. We believe we will be able to continue to comply with the financial covenants contained in our credit facility through its maturity; however, if future operating results differ materially from our expectations we may be unable to maintain compliance.
Previous wording
Our primary source of liquidity on an ongoing basis is cash flows from operating activities which is generally used to (i) fund capital expenditures, (ii) repay any short-term indebtedness incurred for working capital purposes, (iii) provide for the payment of dividends and (iv) fund purchases of shares of our common stock under our stock repurchase program. From time-to-time we will incur indebtedness, generally to (i) fund short-term working capital needs, (ii) refinance existing indebtedness or (iii) fund major capital expenditures or the acquisition of other assets outside the ordinary course of business. We will also from time-to-time sell assets outside the ordinary course of business and use the proceeds to (i) repay existing indebtedness, (ii) make investments in marketable and other securities, (iii) fund major capital expenditures or the acquisition of other assets outside the ordinary course of business or (iv) pay dividends.
Current wording
Our primary source of liquidity on an ongoing basis is cash flows from operating activities which is generally used to (i) fund capital expenditures, (ii) repay any short-term indebtedness incurred for working capital purposes, (iii) provide for the payment of dividends and (iv) fund purchases of shares of our common stock under our stock repurchase program. From time-to-time we will incur indebtedness, generally to (i) fund short-term working capital needs, (ii) refinance existing indebtedness or (iii) fund major capital expenditures or the acquisition of other assets outside the ordinary course of business. We will also from time-to-time sell assets outside the ordinary course of business and use the proceeds to (i) repay existing indebtedness, (ii) make investments in marketable and other
Previous wording
At September 30, 2025, we had aggregate cash, cash equivalents and restricted cash on hand of $36.4 million, of which $34.6 million was held by non-U.S. subsidiaries. Following implementation of a territorial tax system under the 2017 Tax Act, repatriation of any cash and cash equivalents held by our non-U.S. subsidiaries would not be expected to result in any material income tax liability as a result of such repatriation. Based upon our expectation for the TiO 2 industry and anticipated demands on cash resources, we expect to have sufficient liquidity to meet our short-term obligations (defined as the twelve-month period ending September 30, 2026) and our long-term obligations (defined as the five-year period ending September 30, 2030, our time period for long-term budgeting). Our Global Revolver matures in July 2029, and at September 30, 2025, we had total availability for borrowing of approximately $342 million less any amounts outstanding under this facility. The borrowing base is calculated at least quarterly, and the amount available for borrowing may change based on applicable period end balances. See Note 6 to our Condensed Consolidated Financial Statements.
Current wording
At March 31, 2026, we had aggregate cash, cash equivalents and restricted cash on hand of $33.6 million, of which $23.7 million was held by non-U.S. subsidiaries. Following implementation of a territorial tax system under the 2017 Tax Act, repatriation of any cash and cash equivalents held by our non-U.S. subsidiaries would not be expected to result in any material income tax liability as a result of such repatriation. Based upon our expectations of our operating performance and the anticipated demands on our cash resources, we expect to have sufficient liquidity to meet our short-term obligations (defined as the twelve-month period ending March 31, 2027) and our long-term obligations (defined as the five-year period ending March 31, 2031, our time period for long-term budgeting). Our Global Revolver matures in July 2029, and at March 31, 2026, we had total availability for borrowing of approximately $287 million less any amounts outstanding under this facility. The borrowing base is calculated at least quarterly, and the amount available for borrowing may change based on applicable period end balances. See Note 6 to our Condensed Consolidated Financial Statements.
Previous wording
We intend to invest approximately $45 million in capital expenditures primarily to maintain and improve our existing facilities during 2025, including $32.7 million in expenditures through September 30, 2025. It is possible we will delay planned capital projects based on market conditions including but not limited to expected demand and the general availability of materials, equipment and supplies necessary to complete such projects.
Current wording
We intend to invest approximately $60 million in capital expenditures primarily to maintain and improve our existing facilities during 2026, including $10.2 million in expenditures through March 31, 2026. It is possible we will delay planned capital projects based on market conditions including but not limited to expected demand and the general availability of materials, equipment and supplies necessary to complete such projects.
Previous wording
See Notes 11, 13 and 16 to our Condensed Consolidated Financial Statements for a description of certain income tax contingencies, certain legal proceedings and other commitments.
Current wording
See Notes 11 and 13 to our Condensed Consolidated Financial Statements for a description of certain income tax contingencies and certain legal proceedings.
Previous wording
For a discussion of our critical accounting policies, refer to Part I, Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report. There have been no changes in our critical accounting policies during the first nine months of 2025.
Current wording
For a discussion of our critical accounting policies, refer to Part I, Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report. There have been no changes in our critical accounting policies during the first three months of 2026.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
in this Quarterly Report and those described from time to time in our other filings with the SEC and include, but are not limited to, the following:
Current report — wording carried from elsewhere
securities, (iii) fund major capital expenditures or the acquisition of other assets outside the ordinary course of business or (iv) pay dividends.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
(1) We use segment profit (loss) to assess the performance of our TiO 2 operations. Segment profit (loss) is defined as net income (loss) before income tax expense and certain general corporate items. The general corporate items include corporate expense and the components of other income (expense) except for trade interest income.
Previous report — wording carried elsewhere
Net sales- Net sales in the first nine months of 2025 decreased 2%, or $22.9 million, compared to the first nine months of 2024 primarily due to the effects of a 2% decrease in average TiO 2 selling prices (which decreased net sales by approximately $32 million) and changes in product mix (which decreased net sales by approximately $2 million). In addition, we estimate that changes in currency exchange rates (primarily the euro) increased our net sales by approximately $11 million in the first nine months of 2025 as compared to the first nine months of 2024. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, changes in the relative level of supply and demand as well as changes in raw material and other manufacturing costs.
Previous report — wording carried elsewhere
Income tax expense- We recognized income tax expense of $19.0 million in the first nine months of 2025 compared to income tax expense of $34.7 million in the first nine months of 2024. The difference is primarily due to lower earnings in the first nine months of 2025 and the jurisdictional mix of such earnings, partially offset by the impact of the German tax rate change on our German net deferred tax asset. Our earnings and losses are subject to income tax in various U.S. and non-U.S. jurisdictions, and the income tax rates applicable to the pre-tax earnings (losses) of our non-U.S. operations are generally higher than the income tax rates applicable to our U.S. operations. We would generally expect our overall effective tax rate, excluding the effect of any increase or decrease in our deferred income tax asset valuation allowance, changes in our reserve for uncertain tax positions or tax rate changes to be higher than the U.S. federal statutory tax rate of 21% primarily because of our sizeable non-U.S. operations. However, in the first nine months of 2024, our consolidated effective income tax rate, excluding the effect of the valuation allowance and change in reserves for uncertain tax positions, was lower than the U.S federal statutory rate of 21% due to the effect of lower earnings and tax benefits associated with losses incurred in certain high tax jurisdictions. See Note 11 to our Condensed Consolidated Financial Statements.
Previous report — wording carried elsewhere
We have substantial operations and assets located outside the United States (primarily in Germany, Belgium, Norway and Canada). The majority of our sales from non-U.S. operations are denominated in currencies other than the U.S. dollar, principally the euro, other major European currencies and the Canadian dollar. A portion of our sales generated from our non-U.S. operations is denominated in the U.S. dollar (and consequently our non-U.S. operations will generally hold U.S. dollars from time to time). Certain raw materials used in all our production facilities, primarily titanium-containing feedstocks, are purchased primarily in U.S. dollars, while labor and other production and administrative costs are incurred primarily in local currencies. Consequently, the translated U.S. dollar value of our non-U.S. sales and operating results are subject to currency exchange rate fluctuations which may favorably or
Previous report — wording carried elsewhere
The $4 million increase in loss from operations was comprised of the following:
Previous report — wording carried elsewhere
The $11 million increase in net sales (translation gains) was caused primarily by a weakening of the U.S. dollar relative to the euro, as our euro-denominated sales were translated into more U.S. dollars in 2025 as compared to 2024. The strengthening of the U.S. dollar relative to the Canadian dollar and the weakening of the U.S. dollar relative to the Norwegian krone in 2025 did not have a significant effect on our net sales, as a substantial portion of the sales generated by our Canadian and Norwegian operations is denominated in the U.S. dollar.
Previous report — wording carried elsewhere
Our Senior Secured Notes, the Contran Term Loan and our Global Revolver contain a number of covenants and restrictions which, among other things, restrict our ability to incur or guarantee additional debt, incur liens, pay dividends or make other restricted payments, or merge or consolidate with, or sell or transfer substantially all of our assets to, another entity, and contain other provisions and restrictive covenants customary in lending transactions of these types. Our credit agreements contain provisions which could result in the acceleration of indebtedness prior to their stated maturity for reasons other than defaults for failure to comply with typical financial