KRONOS WORLDWIDE INC

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 six months ended June 30, 2026, approximately 45% 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 nine months ended September 30, 2026, approximately 42% of our sales volumes were sold into European markets. Our production facilities are located in Europe and North America.

Previous wording

We reported net income of $15.2 million, or $.13 per share, in the second quarter of 2026 compared to a net loss of $9.2 million, or $.08 per share, in the second quarter of 2025. For the first six months of 2026, we reported net income of $10.4 million or $.09 per share, compared to net income of $8.9 million or $.08 per share, in the first six months of 2025. Net income increased in the second quarter and first six months of 2026 compared to the prior year periods primarily due to higher sales volumes and lower production costs resulting from cost reduction initiatives implemented in the fourth quarter of 2025, as well as lower raw material costs (primarily feedstock costs) and lower unabsorbed fixed costs. These favorable factors were partially offset by lower average TiO 2 selling prices. Comparability of our results was also impacted by the effects of changes in currency exchange rates.

Current wording

We reported net income of $34.8 million, or $.30 per share, in the third quarter of 2026 compared to a net loss of $37.0 million, or $.32 per share, in the third quarter of 2025. For the first nine months of 2026, we reported net income of $45.2 million, or $.39 per share, compared to a net loss of $28.1 million, or $.24 per share, in the first nine months of 2025. Net income increased in the third quarter and first nine months of 2026 compared to the same periods in 2025 primarily due to higher income from operations resulting from higher sales and production volumes, lower raw material costs (primarily feedstock costs) and lower production costs attributable to cost reduction initiatives implemented in the fourth quarter of 2025. These improvements were partially offset by higher distribution costs. Additionally, average TiO 2 selling prices for the third quarter of 2026 were higher than in the comparable prior-year period. Our results of operations for the third quarter and first nine months of 2025 were significantly impacted by reduced demand across all major markets and unabsorbed fixed production costs resulting from lower production volumes. Comparability of our results was also impacted by the effects of changes in currency exchange rates.

Previous wording

Our net income for the six months ended June 30, 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 wording

nine months ended September 30, 2026 also includes income tax expense of $2.0 million ($.02 per share) to recognize an uncertain tax position related to a German tax audit. See Note 11 to our Condensed Consolidated Financial Statements.

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

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 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:

Previous 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 4% during the first six months of 2026. During the second quarter of 2026, we announced and implemented various price increases and surcharges in response to higher operating costs. Our average TiO 2 selling prices for the first six months of 2026 were 4% lower than our average TiO 2 selling prices for the first six months of 2025. Overall, our sales volumes increased in the first six months of 2026 compared to the same period in 2025 primarily due to market share gains across all markets resulting from changing competitive and supply conditions and the continued effect of anti-dumping duties which remain in effect in certain markets.

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 11% during the first nine months of 2026. Throughout this period, we successfully implemented price increases and surcharges in response to rising operating costs, including energy and distribution costs. As a result, our average TiO 2 selling prices for the first nine months of 2026 were 1% lower than the corresponding period of 2025, while average TiO 2 selling prices for the third quarter of 2026 were 5% higher than in the third quarter of 2025. Overall, our sales volumes increased in the first nine months of 2026 compared to the same period in 2025 primarily due to market share gains in our European and North American markets, reflecting the effect of anti-dumping duties that remain in effect in certain markets and changing supply conditions. These conditions allowed us to expand our customer base and supported implementation of our pricing initiatives. Despite these gains, overall TiO 2 demand remains below historical levels.

Previous wording

Excluding the effect of changes in currency exchange rates, our cost of sales per metric ton of TiO 2 sold in the first half of 2026 was lower than the comparable period 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 costs (primarily feedstock costs) and lower unabsorbed fixed costs.

Current wording

Excluding the effects of changes in currency exchange rates, our cost of sales per metric ton of TiO 2 sold in the first nine months of 2026 was lower than the comparable period of 2025 due to decreases in per metric ton production costs, primarily driven by the cost reduction initiatives discussed above, as well as lower raw material costs (primarily feedstock costs) and lower unabsorbed fixed costs, partially offset by higher energy costs.

Previous wording

(1) We use segment profit to assess the performance of our TiO 2 operations. Segment profit 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, see Note 2 to our Condensed Consolidated Financial Statements.

Current wording

(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, see Note 2 to our Condensed Consolidated Financial Statements.

Previous wording

Net sales- Net sales in the second quarter of 2026 increased 13%, or $63.7 million, compared to the second quarter of 2025 primarily due to the effects of a 16% increase in sales volumes (which increased net sales by approximately $79 million) and the favorable impact of changes in currency exchange rates (primarily the euro) which we estimate increased our net sales by approximately $10 million. These increases were partially offset by a 3% decrease in average TiO 2 selling prices (which decreased net sales by approximately $15 million) and by changes in product mix, primarily due to lower average selling prices and lower sales volumes in our complementary businesses. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Current wording

Net sales- Net sales in the third quarter of 2026 increased 18%, or $84.2 million, compared to the third quarter of 2025 primarily due to the effects of a 14% increase in sales volumes (which increased net sales by approximately $64 million) and a 5% increase in average TiO 2 selling prices (which increased net sales by approximately $23 million). TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Previous wording

Cost of sales and gross margin-Cost of sales increased by $23.7 million, or 5%, in thesecond quarter of 2026 compared to thesecond quarter of 2025 due to a 16% increase in sales volumesand the unfavorable impact from changes in currency exchange rates. These increases were partially offset by lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025, lower raw material costs (primarily feedstock), and lower unabsorbed fixed costs. Unabsorbed fixed costs were not material in thesecond quarter of 2026 compared to approximately $20 million in thesecond quarter of 2025.

Current wording

Cost of sales and gross margin-Cost of sales increased by $3.8 million, or 1%, in thethird quarter of 2026 compared to thethird quarter of 2025 due to the net effects of a 14% increase in sales volumes, higher energy costs, higher production rates resulting in reduced unabsorbed fixed production costs, lower raw material costs (primarily feedstock) and lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025. Our cost of sales in thethird quarter of 2025 included approximately $27 million of unabsorbed fixed costs as we adjusted our TiO 2 production volumes lower to align inventory levels with lower demand. Unabsorbed fixed costs in thethird quarter of 2026 were not material.

Previous wording

Gross margin as a percentage of net sales increased to 18% in the second quarter of 2026 compared to 13% in the second quarter of 2025. Our gross margin as a percentage of net sales increased primarily due to the net effects of higher sales volumes, lower average TiO 2 selling prices, lower production costs as discussed above, and the unfavorable impact from changes in currency exchange rates.

Current wording

Gross margin as a percentage of net sales increased to 24% in the third quarter of 2026 compared to 10% in the third quarter of 2025. Our gross margin as a percentage of net sales increased based on the factors affecting net sales and cost of sales, discussed above.

Previous wording

Selling, general and administrative expense- Selling, general and administrative expense increased $2.4 million, or 4%, in the second quarter of 2026 compared to the second quarter of 2025, as the unfavorable impact of changes in currency exchange rates and higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of changes in currency exchange rates, distribution costs increased primarily due to higher sales volumes and elevated U.S. freight rates beginning early in the second quarter of 2026. Selling, general and administrative expense as a percentage of net sales decreased to 12% in the second quarter of 2026 compared to 13% in the second quarter of 2025, primarily due to the effects of higher sales.

Current wording

Selling, general and administrative expense- Selling, general and administrative expense increased $5.2 million, or 8%, in the third quarter of 2026 compared to the third quarter of 2025, as higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of currency exchange rates, distribution costs increased primarily due to higher freight rates associated with sales volumes in our complementary businesses, higher TiO 2 sales volumes and elevated U.S. freight rates which began to increase in the second quarter and continued into the third quarter of 2026. Selling, general and administrative expense as a percentage of net sales decreased to 12% in the third quarter of 2026 compared to 13% in the third quarter of 2025, primarily due to higher sales volumes and the factors described above.

Previous wording

Segment profit- Segment profit increased by $30.1 million to $41.0 million in the second quarter of 2026 compared to $10.9 million in the second 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 $12 million in the second quarter of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.

Current wording

Segment profit (loss)- Segment profit increased by $76.3 million to $61.0 million in the third quarter of 2026 compared to a $15.3 million loss in the third quarter of 2025, primarily as a result of the factors impacting gross margin and selling, general and administrative expense discussed above. We estimate that changes in currency exchange rates decreased segment profit by approximately $5 million in the third 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 second quarter of 2026 increased by $1.4 million compared to the second quarter of 2025 primarily due to higher average debt balances and higher interest rates. See Note 6 to our Condensed Consolidated Financial Statements. Other components of net periodic pension and OPEB cost in the second quarter of 2026 increased $.2 million compared to the second quarter of 2025 primarily due to lower expected return on plan assets.

Current wording

Other non-operating income (expense) - Interest expense in the third quarter of 2026 decreased by $.7 million compared to the third quarter of 2025, primarily due to lower overall average debt balances. Other components of net periodic pension and OPEB cost in the third quarter of 2026 increased $.3 million compared to the third quarter of 2025 primarily due to lower expected return on plan assets. 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. See Note 2 to our Condensed Consolidated Financial Statements.

Previous wording

Income tax expense- We recognized income tax expense of $7.7 million in the second quarter of 2026 compared to income tax expense of $3.5 million in the second quarter of 2025. The increase is primarily due to higher earnings in the second quarter of 2026 and the jurisdictional mix of such earnings. 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 allowances, 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 $9.2 million in the third quarter of 2026 compared to income tax expense of $7.9 million in the third quarter of 2025. The increase was primarily due to higher earnings in the third quarter of 2026 and the jurisdictional mix of such earnings, partially offset by the $12.1 million non-cash deferred income tax benefit recognized in the third quarter of 2026 related to proposed §987 currency regulations issued in August 2026 and the impact of the German federal tax rate change on our German net deferred tax asset recorded in the third quarter of 2025. 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 allowances, changes in our reserve for uncertain tax positions, or tax law 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

Net sales- Net sales in the first six months of 2026 increased 9%, or $83.7 million, compared to the first six months of 2025 primarily due to the effects of a 10% increase in sales volumes (which increased net sales by approximately $98 million) and the favorable impact of changes in currency exchange rates (primarily the euro), which we estimate increased our net sales by approximately $41 million. These increases were partially offset by a 4% decrease in average TiO 2 selling prices (which decreased net sales by approximately $39 million) and by changes in product mix, primarily due to lower average selling prices and lower sales volumes in our complementary businesses. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Current wording

Net sales- Net sales in the first nine months of 2026 increased 12%, or $167.9 million, compared to the first nine months of 2025 primarily due to an 11% increase in sales volumes (which increased net sales by approximately $159 million) partially offset by a 1% decrease in average TiO 2 selling prices (which decreased net sales by approximately $14 million). Additionally, we estimate that changes in currency exchange rates (primarily the euro) increased our net sales by approximately $39 million in the first nine months of 2026 as compared to the first nine months of 2025. TiO 2 selling prices will increase or decrease generally as a result of competitive market pressures, change in the relative level of supply and demand as well as change in raw material and other manufacturing costs.

Previous wording

Cost of sales and gross margin-Cost of sales increased by $67.3 million, or 8%, in thefirst six months of 2026 compared to thefirst six months of 2025 due to a 10% increase in sales volumesand the unfavorable impact from changes in currency exchange rates. These increases were partially offset by lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025, lower raw material costs (primarily feedstock), and lower unabsorbed fixed costs. Unabsorbed fixed costs were not material in the first six months of 2026 compared to $30 million in the first six months of 2025.

Current wording

Cost of sales and gross margin-Cost of sales increased by $71.0 million, or 6%, in thefirst nine months of 2026 compared to thefirst nine months of 2025 primarily due to an 11% increase in sales volumes and theunfavorable impact from changes in currency exchange rates, partially offset by higher production rates resulting in reduced unabsorbed fixed production costs, lower raw material costs (primarily feedstock) and lower production costs resulting primarily from the cost reduction initiatives implemented in the fourth quarter of 2025. Our cost of sales for the first nine months of 2025 includes approximately $45 million of unabsorbed fixed costs. Unabsorbed fixed costs for the first nine months of 2026 were not material.

Previous wording

Our cost of sales as a percentage of net sales improved to 82% in the second quarter of 2026 compared to 87% in the same period of 2025, primarily due to the favorable effects of higher sales volumes and lower production costs, discussed above. These favorable impacts were partially offset by lower average TiO 2 selling prices and the unfavorable impact of lower average selling prices and sales volumes within our complementary businesses.

Current wording

Our cost of sales as a percentage of net sales improved to 81% in the first nine months of 2026 compared to 85% in the same period of 2025, primarily due to the favorable effects of lower production costs, partially offset by lower average TiO 2 selling prices and the unfavorable impact of changes in currency exchange rates.

Previous wording

Gross margin as a percentage of net sales was comparable at 17% in the first six months of 2026 and 2025 based on the factors affecting net sales and cost of sales, discussed above.

Current wording

Gross margin as a percentage of net sales increased to 19% in the first nine months of 2026 compared to 15% in the comparable period of 2025 based on the factors affecting net sales and cost of sales, discussed above.

Previous wording

Selling, general and administrative expense- Selling, general and administrative expense increased $4.4 million, or 4%, in the first six months of 2026 compared to the first six months of 2025, as the unfavorable impact of changes in currency exchange rates and slightly higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of changes in currency exchange rates, distribution costs increased primarily due to higher sales volumes and elevated U.S. freight rates beginning early in the second quarter of 2026. These increases more than offset the benefit of the restructuring implemented in the fourth quarter 2025 and the one-time impact of additional warehousing costs in the first quarter of 2025 to position finished goods inventory in the U.S. in advance of anticipated U.S. federal government tariff announcements. Selling, general and administrative expense as a percentage of net sales decreased to 12% in the first six months of 2026 compared to 13% in the same period of 2025, primarily due to the effects of higher sales described above.

Current wording

Selling, general and administrative expense- Selling, general and administrative expense increased $9.6 million, or 5%, in the first nine months of 2026 compared to the first nine months of 2025, as the unfavorable impact of currency exchange rates and higher distribution costs more than offset cost savings realized from the fourth quarter of 2025 restructuring. Excluding the effects of currency exchange rates, distribution costs increased primarily due to higher freight rates associated with sales volumes in our complementary businesses, higher TiO 2 sales volumes and elevated U.S. freight rates primarily impacting the second and third quarters of 2026. These increases more than offset the benefits of the cost reduction initiatives and were greater than the additional warehousing costs incurred during the first quarter of 2025 to position finished goods inventory in the U.S. in advance of anticipated U.S. federal government tariff announcements. Selling, general and administrative expense as a percentage of net sales decreased to 12% in the first nine months of 2026 compared to 13% in the same period of 2025, primarily due to higher sales volumes and the factors described above.

Previous wording

Segment profit- Segment profit increased by $3.6 million to $56.1 million in the first six months of 2026 compared to $52.5 million in the first six months 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 $18 million in the first six months of 2026 compared to the same period in 2025, as discussed in the effects of currency exchange rates section below.

Current wording

Segment profit- Segment profit increased by $79.9 million to $117.1 million in the first nine months of 2026 compared to $37.2 million in the first nine months of 2025, primarily as a result of the factors impacting gross margin and selling, general and administrative costs discussed above. We estimate that changes in currency exchange rates decreased segment profit by approximately $23 million in the first nine months 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 first six months of 2026 increased by $4.1 million compared to the first six months of 2025 primarily due to higher average debt balances and higher interest rates. See Note 6 to our Condensed Consolidated Financial Statements. Other components of net periodic pension and OPEB costs in the first six months of 2026 increased $.5 million compared to the first six months of 2025 primarily due to lower expected return on plan assets. We recognized an unrealized gain of $.3 million in the first six months 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.

Current wording

Other non-operating income (expense) - Interest expense in the first nine months of 2026 increased by $3.4 million compared to the first nine months of 2025 primarily due to higher average interest rates. In the first nine months of 2025, we recognized a non-cash gain of $4.6 million due to the remeasurement of our earn-out liability. See Note 2 to our Condensed Consolidated Financial Statements. Other components of net periodic pension and OPEB costs in the first nine months of 2026 increased $.8 million compared to the first nine months of 2025 primarily due to lower expected return on plan assets. We recognized an unrealized gain of $.4 million in the first nine months of 2026 related to the change in marketable equity securities compared to an unrealized loss of $1.1 million in the same period of 2025.

Previous wording

Income tax expense- We recognized income tax expense of $10.5 million in the first six months of 2026 compared to income tax expense of $11.1 million in the same period of 2025. The decrease is primarily due to the jurisdictional mix of earnings partially 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 allowances, 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 $19.7 million in the first nine months of 2026 compared to income tax expense of $19.0 million in the same period of 2025. The increase was primarily due to higher earnings in the first nine months of 2026 and the jurisdictional mix of such earnings, partially offset by the $12.1 million non-cash deferred income tax benefit recognized in the third quarter of 2026 related to proposed §987 currency regulations issued in August 2026 and the impact of the German federal tax rate change on our German net deferred tax asset recorded in the third quarter of 2025. 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 allowances, changes in our reserve for uncertain tax positions, or tax law 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

At December 31, 2025, we had significant German corporate and trade net operating loss (NOL) carryforwards of $510.8 million (deferred tax asset “DTA” of $57.2 million) and $46.3 million (DTA of $5.0 million), respectively. Prior to December 31, 2025, 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 June 30, 2026, 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.

Current wording

At December 31, 2025, we had significant German corporate and trade net operating loss (NOL) carryforwards of $512.6 million (deferred tax asset “DTA” of $57.5 million) and $48.2 million (DTA of $5.2 million), respectively. Prior to December 31, 2025, 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, 2026, 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 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

Current wording

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 segment profit for the periods indicated.

Current wording

Fluctuations in currency exchange rates had the following effects on our sales and segment profit (loss) for the periods indicated.

Previous wording

The $10 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.

Current wording

The $2 million decrease in net sales (translation losses) was caused primarily by a strengthening of the U.S. dollar relative to the euro, as our euro-denominated sales were translated into less U.S. dollars in 2026 as compared to 2025. 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 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 $12 million decrease in segment profit was comprised of the following:

Current wording

The $5 million decrease in segment profit was comprised of the following:

Previous wording

The $41 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.

Current wording

The $39 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.

Previous wording

The $18 million decrease in segment profit was comprised of the following:

Current wording

The $23 million decrease in segment profit was comprised of the following:

Previous wording

During the second quarter of 2026, we continued the positive momentum from the first quarter, with sales volumes improving compared to the same period in 2025. Volume growth was driven by higher sales across all major markets as a result of market share gains, particularly in Europe, reflecting changing competitive and supply conditions that created opportunities to expand our customer base. While demand has improved compared to 2025, overall demand remains below historical levels, particularly in North America, where demand continues to be affected by broader economic uncertainty, prolonged elevated interest rates and subdued consumer spending. We believe industry-wide TiO 2 inventories remain constrained and customer order levels have improved in response to geopolitical instability and recent supply and shipping disruptions in certain regions. As a result, customer order lead times have lengthened. Our order backlog entering the third quarter is favorable compared to prior year, providing greater flexibility in our near- and intermediate-term production planning.

Current wording

During the third quarter of 2026, we continued the positive momentum from the first half of the year, with sales volumes improving compared to the same period in 2025. Volume growth was driven primarily by market share gains in Europe and North America, reflecting the effect of anti-dumping duties in certain markets and changing supply conditions. While sales volumes have improved compared to 2025, overall demand remains below historical levels, particularly in North America, where demand continues to be affected by broader economic uncertainty, prolonged housing market weakness caused by elevated interest rates, and subdued consumer spending. Customer order lead times have recently begun to decline, consistent with the seasonal slowdown typically experienced during the fourth quarter. Our order backlog entering the fourth quarter remains favorable compared to the prior year, and combined with planned maintenance activities at several of our facilities, we expect finished goods inventory levels to remain below normal.

Previous wording

The cost-reduction initiatives implemented during the fourth quarter of 2025, including workforce reductions and other measures designed to align our cost structure with current demand levels, continue to benefit our operating results in 2026. During the second quarter of 2026, we realized improved gross margins, and we expect margins to continue to benefit from lower cost inventory produced during 2026 and more favorable selling prices. Our operational restructuring allows us to run our facilities more efficiently at lower production rates for extended periods while maintaining flexibility to respond to changing market conditions. We operated our facilities within our normal capacity range during the first six months of 2026, and we currently expect to continue operating within our normal capacity range for the remainder of the year.

Current wording

The cost-reduction initiatives implemented during the fourth quarter of 2025, including workforce reductions and other measures designed to align our cost structure with current demand levels, continue to benefit our operating results in 2026. Gross margins improved during the third quarter and first nine months of 2026 and are expected to remain above 2025 levels for the full year, benefiting from lower cost inventory produced during 2026, more favorable selling prices and the ongoing effects of our cost-reduction initiatives. Our operational restructuring allows us to run our facilities more efficiently at lower production rates for extended periods while maintaining flexibility to respond to changing market conditions. We operated our facilities within our normal capacity range during the first nine months of 2026, and we currently expect to continue operating within our normal capacity range for the remainder of the year.

Previous wording

We remain focused on improving profitability through pricing actions, disciplined cost management, and continued execution of our operating cost structural realignment initiatives. We also continue to pursue targeted sales growth opportunities in regions affected by changing competitive and supply conditions, logistical challenges and trade measures that have reduced the competitiveness of certain imports.

Current wording

We remain focused on improving profitability through pricing actions, disciplined cost management, and continued execution of our cost reduction initiatives. We also continue to pursue targeted sales growth opportunities in regions affected by logistical challenges and trade measures that have reduced the competitiveness of certain imports.

Previous wording

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 half of the year, 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 revolving credit facility 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 wording

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 half of the year, we expect liquidity to improve over the remainder of 2026. We will continue to actively manage working capital, including inventories and receivables, to bolster operating cash flows and maintain financial flexibility. We believe availability under our revolving credit facility, 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 priorities.

Previous wording

Cash provided by operating activities was $2.0 million in the first six months of 2026 compared to cash used of $81.7 million in the first six months of 2025. This $83.7 million increase in the amount of cash provided by operating activities was primarily due to the net effect of the following:

Current wording

Cash provided by operating activities was $54.9 million in the first nine months of 2026 compared to cash used of $89.6 million in the first nine months of 2025. This $144.5 million increase in the amount of cash provided by operating activities was primarily due to the net effects of the following:

Previous wording

Our capital expenditures of $26.3 million and $23.2 million in the first six months of 2026 and 2025, respectively, were primarily to maintain and improve the cost effectiveness of our manufacturing facilities.

Current wording

Our capital expenditures of $39.8 million and $32.7 million in the first nine months of 2026 and 2025, respectively, were primarily to maintain and improve the cost effectiveness of our manufacturing facilities.

Previous wording

During the firstsix months of 2026 and 2025, we paid quarterly dividends of $.05 per share to stockholders aggregating $11.5 million each period.

Current wording

During the first nine months of 2026 and 2025, we paid dividends to stockholders aggregating $17.3 million ($.05 in each of the first three quarters of 2026 and 2025).

Previous wording

During the first six months of 2026 and 2025, we had net borrowings of $28.4 million and $25.4 million, respectively, on our revolving credit facility.

Current wording

During the first nine months of 2026 and 2025, we had net borrowings of nil and $58.7 million, respectively, on our revolving credit facility (the “Global Revolver”).

Previous wording

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 June 30, 2026 was approximately $261 million.

Current wording

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 September 30, 2026 was approximately $254 million.

Previous wording

We routinely evaluate our liquidity requirements, alternative uses of capital, capital needs and availability of resources in view of, among other things, our dividend policy, our debt service, our capital expenditure requirements and estimated future operating cash flows. As a result of this process, we have in the past and may in the future seek to reduce, refinance, repurchase or restructure indebtedness, raise additional capital, repurchase shares of our common stock, modify our dividend policy, restructure ownership interests, sell interests in our subsidiaries or other assets, or take a combination of these steps or other steps to manage our liquidity and

Current wording

We routinely evaluate our liquidity requirements, alternative uses of capital, capital needs and availability of resources in view of, among other things, our dividend policy, our debt service, our capital expenditure requirements and estimated future operating cash flows. As a result of this process, we have in the past and may in the future seek to reduce, refinance, repurchase or restructure indebtedness, raise additional capital, repurchase shares of our common stock, modify our dividend policy, restructure ownership interests, sell interests in our subsidiaries or other assets, or take a combination of these steps or other steps to manage our liquidity and capital resources. Such activities have in the past and may in the future involve related companies. We may also from time to time engage in preliminary discussions with existing or potential investors regarding the timing or terms of any such refinancing or other potential transaction. In the normal course of our business, we may investigate, evaluate, discuss and engage in acquisition, joint venture, strategic relationship and other business combination opportunities in the TiO 2 industry. In the event of any future acquisition or joint venture opportunity, we may consider using then-available liquidity, issuing our equity securities or incurring additional indebtedness.

Previous wording

At June 30, 2026, we had aggregate cash, cash equivalents and restricted cash on hand of $34.5 million, of which $27.8 million was held by our 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 June 30, 2027) and our long-term obligations (defined as the five-year period ending June 30, 2031, our time period for long-term budgeting). Our Global Revolver matures in July 2029, and at June 30, 2026, we had total availability for borrowing of approximately $261 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 September 30, 2026, we had aggregate cash, cash equivalents and restricted cash on hand of $40.1 million, of which $32.9 million was held by our 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 September 30, 2027) and our long-term obligations (defined as the five-year period ending September 30, 2031, our time period for long-term budgeting). Our Global Revolver matures in July 2029, and at September 30, 2026, we had total availability for borrowing of approximately $254 million. 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.