Orion SA
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
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.
Jun 30, 2024 · Filed Aug 1, 2024
OEC$3.96-5.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0001609804-24-000018
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001609804-24-000025
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 132 previous paragraphs and 155 current paragraphs.
96 unchanged; 24 reworded; 32 added; 12 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 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 (32)
Current report
Net sales for the three months ended June 30, 2024 increased by $18.2 million, or 4.0%, to $477.0 million, year over year, primarily driven by higher volume in Specialty Carbon Black segment, the pass-through effect from higher oil prices and improved contractual pricing. Those were partially offset by unfavorable currency translation.
Current report
Cost of sales for the three months ended June 30, 2024 increased by $25.5 million, or 7.5%, to $367.2 million year over year, primarily due to higher volume in Specialty Black Carbon segment and higher oil prices.
Current report
Gross profit for the three months ended June 30, 2024 decreased by $7.3 million, or 6.2%, to $109.8 million, year over year. The decrease was driven primarily by favorable impact from the pass-through of raw material costs in the prior year, higher fixed costs and lower cogeneration.
Current report
The decrease was driven by favorable impact from the pass-through of raw material costs in the prior year, higher fixed costs and lower cogeneration. Those were partially offset by higher Specialty Carbon Black volume and improved contractual pricing.
Current report
The activities from the components of Other Comprehensive income are discussed below:
Current report
•$3.1 million of net unfavorable impact is related to unrealized loss due to foreign currency translation adjustments, and
Current report
For the six months ended June 30, 2024 compared to six months ended June 30, 2023
Current report
Net sales
Current report
Volume increased by 20.7 kmt to 481.5 kmt compared to the six months ended June 30, 2023, primarily due to higher volume in Specialty Carbon Black segment.
Current report
Net sales increased by $20.4 million, or 2.1%, in the six months ended June 30, 2024 to $979.9 million, year over year, primarily driven by higher volume in Specialty Carbon Black segment and improved contractual pricing. This was partially offset by the pass-through effect of lower raw material costs and lower cogeneration.
Current report
Cost of sales
Current report
Cost of sales increased by $41.9 million, or 5.9%, to $747.9 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to higher Specialty Carbon Black segment volume and associated costs.
Current report
Gross profit
Current report
Gross profit decreased by $21.5 million, or 8.5%, to $232.0 million, and gross profit per metric ton decreased by 12.4% to $481.8 year over year. The decrease was primarily driven by higher fixed costs, favorable impact from the pass-through of raw material costs in the prior year and lower cogeneration.
Current report
Selling, general and administrative expenses
Current report
Selling, general and administrative expenses increased by $9.1 million, or 8.1%, to $121.8 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by higher freight and personnel costs.
Current report
Provision for income taxes
Current report
Adjusted EBITDA decreased by $28.0 million, or 14.9%, from $188.4 million in the six months ended June 30, 2023 to $160.4 million in the six months ended June 30, 2024. The decrease was primarily due to favorable impact from the pass-through of raw material costs in the prior year, higher fixed costs and lower cogeneration. Those were partially offset by higher Specialty Carbon Black volume and improved contractual pricing.
Current report
Comprehensive Income
Current report
Comprehensive income decreased by $23.8 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Net income decreased by $25.2 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current report
The activities from the components of Other Comprehensive income are discussed below:
Current report
•$2.2 million of net unfavorable impact is related to unrealized loss due to foreign currency translation adjustments.
Current report
•$3.1 million of net favorable changes is related to defined pension and other post-retirement benefits.
Current report
Net sales increased by $16.0 million, or 10.7%, year over year, to $165.5 million and increased by $24.9 million, or 8.0%, year over year, to $336.4 million for the three and six months ended June 30, 2024, respectively, primarily due to higher volume across all regions.
Current report
Gross profit decreased by $3.1 million, or 7.3%, year over year, to $39.5 million and decreased by $13.5 million, or 14.3%, year over year, to $81.2 million for the three and six months ended June 30, 2024, respectively, primarily driven by favorable impact from the pass-through of raw material costs in the prior year and lower cogeneration, partially offset by higher volume.
Current report
Adjusted EBITDA for the six months ended June 30, 2024 decreased by $11.3 million, or 16.8%, year over year, to $55.9 million. The decrease was primarily due to favorable impact from the pass-through of raw material costs in the prior year and higher fixed costs, partially offset by higher volume.
Current report
Volume decreased by 3.5 kmt, or 2.0%, year over year, to 170.2 kmt, for the three months ended June 30, 2024, primarily due to lower demand in Americas and Asia.
Current report
Volume increased by 1.1 kmt, or 0.3%, year over year, to 355.3 kmt, for the six months ended June 30, 2024.
Current report
Net sales for the three months ended June 30, 2024 increased by $2.2 million, or 0.7%, year over year, to $311.5 million.
Current report
Gross profit for the three and six months ended June 30, 2024 decreased by $4.2 million, or 5.6%, year over year, to $70.3 million and decreased by $8.0 million, or 5.0%, year over year, to $150.8 million, respectively. The decrease was primarily due to lower volume, partially offset by improved contractual pricing.
Current report
Adjusted EBITDA decreased by $10.3 million, or 17.9%, year over year, to $47.1 million for the three months ended June 30, 2024. The decrease was driven primarily by higher fixed costs, favorable impact from the pass-through of raw material costs in the prior year and lower cogeneration, partially offset by higher volume in Europe and improved contractual pricing.
Current report
Adjusted EBITDA decreased by $16.7 million, or 13.8%, to $104.5 million six months ended June 30, 2024. The decrease was driven primarily by higher fixed costs, favorable impact from the pass-through of raw material costs in the prior year, reduced volume in Americas and lower cogeneration, partially offset by higher volume in Europe and improved contractual pricing.
Removed paragraphs (12)
Previous report
Net sales for the three months ended March 31, 2024 increased by $2.2 million, or 0.4%, to $502.9 million, year over year, primarily driven by higher volume in both segments. Those were partially offset by the pass-through effect of declining oil prices in both segments and lower cogeneration price due to European electricity prices.
Previous report
Cost of sales for the three months ended March 31, 2024 increased by $16.4 million, or 4.5%, to $380.7 million year over year, primarily due to higher volume in both segments and associated costs. Those were partially offset by declining oil prices.
Previous report
Gross profit for the three months ended March 31, 2024 decreased by $14.2 million, or 10.4%, to $122.2 million, year over year. The decrease was primarily driven by favorable timing items in the prior year, North American rubber volume, higher fixed costs and lower cogeneration pricing in Europe. Those were partially offset by higher volume in both segments.
Previous report
The decrease was driven by favorable timing items in the prior year, North American rubber volume, higher fixed costs and lower cogeneration pricing in Europe.
Previous report
•$0.9 million of net impacts of unrealized changes in foreign currency translation adjustments.
Previous report
Net sales for the three months ended March 31, 2024 increased by $8.9 million, or 5.5%, year over year, to $170.9 million, primarily driven by higher volume, partially offset by pass-through effect of declining oil prices.
Previous report
Gross profit for the three months ended March 31, 2024 decreased by $10.4 million, or 20.0%, year over year, to $41.7 million, primarily driven by lower margin and lower cogeneration pricing in Europe, partially offset by higher volume.
Previous report
Adjusted EBITDA for the three months ended March 31, 2024 decreased by $9.4 million, or 25.2%, year over year, to $27.9 million, primarily due to lower margin and lower cogeneration pricing in Europe, partially offset by higher volume across all regions and end-markets.
Previous report
Volume for the three months ended March 31, 2024 increased by 4.6 kmt, or 2.5%, year over year, to 185.1 kmt, due to higher demand in Europe/Middle East/Africa and Asia/Pacific regions.
Previous report
Gross profit for the three months ended March 31, 2024 decreased by $3.8 million, or 4.5%, year over year, to $80.5 million. The decrease was primarily due to lower margin and lower cogeneration pricing in Europe, partially offset by and higher volume.
Previous report
•Accounts receivable, net—Increase driven by higher sales were partially offset by improved payment terms.
Previous report
•Inventories, net—The primary driver for inventory decreases were lower oil prices.
Reworded paragraphs (24)
Previous wording
The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three months ended March 31, 2024 and 2023 and should be read in conjunction with the information included under Item 1. Financial Statements and Supplementary Data (Unaudited) elsewhere in this report. We prepare our financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).
Current wording
The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three and six months ended June 30, 2024 and 2023 and should be read in conjunction with the information included under Item 1. Financial Statements and Supplementary Data (Unaudited) elsewhere in this report. We prepare our financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).
Previous wording
Volume for the three months ended March 31, 2024 increased in aggregate by 14.9 kmt to 248.4 kmt, year over year, primarily due to higher volume in both segments. Specialty volume recovery was across all regions and end markets.
Current wording
Volume for the three months ended June 30, 2024 increased in aggregate by 5.8 kmt to 233.1 kmt, year over year, due to higher volume in Specialty Carbon Black segment.
Previous wording
Gross profit per metric ton decreased by 15.8% to $491.9, year over year, driven by lower margin in both segments.
Current wording
Gross profit per metric ton decreased by 8.6% to $471.0, year over year.
Previous wording
Selling, general and administrative expenses for the three months ended March 31, 2024 increased by $3.8 million, or 6.6% to $61.5 million, year over year, due to higher personnel costs.
Current wording
Selling, general and administrative expenses for the three months ended June 30, 2024 increased by $5.3 million, or 9.6% to $60.3 million, year over year, driven by higher freight and personnel costs.
Previous wording
For the three months ended March 31, 2024, and 2023 the Company recognized Income before earnings in affiliated companies and income taxes of $40.1 million, compared to $60.5 million, respectively. The provision for income taxes was an expense of $13.5 million and $18.3 million for the three months ended March 31, 2024 and 2023, respectively. The effective tax rate for the three months ended March 31, 2024, and 2023 was 33.7% and 30.2%, respectively. The increase in effective tax rate for three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to changes in projected pre-tax income mix in countries with varying statutory tax rates.
Current wording
For the three months ended June 30, 2024, and 2023 the Company recognized Income before earnings in affiliated companies and income taxes of $29.4 million, compared to $47.7 million, respectively. The provision for income taxes was an expense of $9.1 million and $17.8 million for the three months ended June 30, 2024 and 2023, respectively. The effective tax rate for the three months ended June 30, 2024, and 2023 was 31.0% and 37.3%, respectively. Thedecrease in effective tax rate for three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was primarily attributable to changes in projected pre-tax income mix in countries with varying statutory tax rates.
Previous wording
Adjusted EBITDA decreased in the first quarter of 2024 by $15.8 million, or 15.6%, to $85.3 million, year over year.
Current wording
Adjusted EBITDA decreased in the second quarter of 2024 by $12.2 million, or 14.0%, to $75.1 million, year over year.
Previous wording
Comprehensive income decreased in the first quarter of 2024 by $11.9 million to $19.9 million, year over year. The components of Comprehensive income are discussed below:
Current wording
Comprehensive income decreased in the second quarter of 2024 by $11.9 million to $11.1 million, year over year. The components of Comprehensive income are discussed below:
Previous wording
Net income decreased by $15.6 million in the first quarter of 2024 compared to the first quarter of 2023. These were partially offset by,
Current wording
Net income decreased by $9.6 million in the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
•$1.5 million of net changes in defined pension and other post-retirement benefits.
Current wording
•$1.6 million of net favorable impact is related to changes in defined pension and other post-retirement benefits.
Previous wording
•$1.3 million of net impacts related to financial derivative instruments primarily driven by net periodic changes in cross currency and interest rate swaps, and
Current wording
•$0.5 million of net favorable impacts is related to financial derivative instruments primarily driven by net periodic changes in cross currency and interest rate swaps, and
Previous wording
Volume for the three months ended March 31, 2024 increased by 10.3 kmt, or 19.4%, year over year, to 63.3 kmt, primarily due to volume recovery across all regions and end markets.
Current wording
Volume increased by 9.3 kmt, or 17.4%, year over year, to 62.9 kmt and increased by 19.6 kmt, or 18.4% year over year, to 126.2 kmt for the three and six months ended June 30, 2024, respectively, primarily due to volume recovery across all regions and end markets.
Previous wording
Adjusted EBITDA for the three months ended March 31, 2024 decreased by $6.4 million, or 10.0%, year over year, to $57.4 million. The decrease was primarily driven by favorable timing items in the prior year, North American Rubber volume and lower cogeneration pricing in Europe, partially offset by higher European and Asian volume.
Current wording
Adjusted EBITDA for the three months ended June 30, 2024 decreased by $1.9 million, or 6.4%, year over year, to $28.0 million. The decrease was primarily due to favorable impact from the pass-through of raw material costs in the prior year and lower cogeneration, partially offset by higher volume.
Previous wording
Adjusted EBITDA margin for the three months ended March 31, 2024 decreased by 670 basis points, year over year, to 16.3%.
Current wording
Adjusted EBITDA margin decreased by 310 basis points, year over year, to 16.9% and decreased by 500 basis points, year over year, to 16.6%, for the three and six ended June 30, 2024, respectively.
Previous wording
Net sales for the three months ended March 31, 2024 decreased by $6.7 million, or 2.0%, year over year, to $332.0 million. The decrease was primarily due to the pass-through effect of declining oil prices, partially offset by higher volume.
Current wording
Net sales decreased by $4.5 million, or 0.7%, year over year, to $643.5 million for the six months ended June 30, 2024, primarily due to the pass-through effect of lower raw material costs, partially offset by improved contractual pricing.
Previous wording
For the three months ended March 31, 2024, Adjusted EBITDA margin decreased 150 basis points to 17.3%, year over year.
Current wording
Adjusted EBITDA margin decreased 350 basis points to 15.1%, year over year and decreased 250 basis points to 16.2%, year over year for the three and six months ended June 30, 2024.
Previous wording
Net cash provided by operating activities during the three months ended March 31, 2024 was $32.4 million. The cash provided by operating activities primarily reflects changes in working capital. Change in working capital includes $107.6 million sale of certain accounts receivables, discussed in Note B. Accounts Receivable.
Current wording
Net cash provided by operating activities during the six months ended June 30, 2024 was $61.7 million. The cash provided by operating activities primarily reflects changes in working capital. Change in working capital includes $218.4 million sale of certain accounts receivables, discussed in Note B. Accounts Receivable.
Previous wording
Net cash used in investing activities in the three months ended March 31, 2024 amounted to $33.1 million. The expenditures were primarily related to safety and maintenance investments.
Current wording
Net cash used in investing activities in the six months ended June 30, 2024 amounted to $87.8 million. The expenditures were primarily related to safety, maintenance and growth investments.
Previous wording
Net cash provided by financing activities during the three months ended March 31, 2024 amounted to $7.0 million. These inflows primarily consisted of $37.5 million related to other short-term debt borrowings, partially offset by $28.4 million, net related to repayment of our ancillary credit facilities.
Current wording
Net cash provided by financing activities during the six months ended June 30, 2024 amounted to $23.5 million. These inflows primarily consisted of $52.7 million related to other short-term debt borrowings, partially offset by $17.7 million, net related to repayment of our ancillary credit facilities.
Previous wording
Net cash provided by operating activities for the three months ended March 31, 2023, amounted to $108.1 million. The cash provided by operating activities primarily reflects changes in working capital and higher Net income. Change in working capital includes $68.9 million sale of certain accounts receivables, discussed in Note B. Accounts Receivable.
Current wording
Net cash provided by operating activities for the six months ended June 30, 2023, amounted to $206.2 million. The cash provided by operating activities primarily reflects changes in working capital and higher Net income. Change in working capital includes $194.1 million sale of certain accounts receivables, discussed in Note B. Accounts Receivable.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2023, amounted to $30.5 million. These expenditures were comprised of a combination of safety, maintenance-related and growth investments, as well as $8.4 million ofexpenditures associated with our, now completed, installation of emissions reduction technology to meet EPA requirements in the U.S.
Current wording
Net cash used in investing activities for the six months ended June 30, 2023, amounted to $69.1 million. These expenditures were comprised of a combination of safety, maintenance-related and growth investments, as well as $19.4 million ofexpenditures associated with our, now completed, installation of emissions reduction technology to meet EPA requirements in the U.S.
Previous wording
Net cash used in financing activities for the three months ended March 31, 2023, amounted to $62.5 million. These outflows primarily consisted of $32.9 million related to repayment of our ancillary credit facilities and $29.3 million for repurchase of common stock under the Stock Repurchase Program.
Current wording
Net cash used in financing activities for the six months ended June 30, 2023, amounted to $120.7 million. These outflows primarily consisted of $62.8 million related to the reduction of other short-term debt, $49.5 million for repurchase of common stock under the Stock Repurchase Program and $12.0 million, net related to repayment of our ancillary credit facilities.
Previous wording
As of March 31, 2024, the company had total liquidity of $261.7 million, including cash and equivalents of $43.9 million, $192.6 million availability under our revolving credit facility, including ancillary lines, and $25.2 million of capacity under other available credit lines. Net debt was $773.1 million, and Net leverage was 2.44x.
Current wording
As of June 30, 2024, the company had total liquidity of $229.2 million, including cash and equivalents of $34.2 million, $157.4 million availability under our revolving credit facility, including ancillary lines, and $37.6 million of capacity under other available credit lines. Net debt was $803.5 million, and Net leverage was 2.64x.
Previous wording
Our Net working capital increased from $344.4 million as of December 31, 2023, to $363.4 million as of March 31, 2024. The drivers of the changes in working capital over the periods were:
Current wording
Our Net working capital increased from $344.4 million as of December 31, 2023, to $370.5 million as of June 30, 2024. The primary driver of the changes in working capital over the period was due to an increase in Accounts receivable, net. This increase was primarily driven by higher sales, partially offset by improved payment terms.
Previous wording
•our ability to realize benefits from planned plant capacity expansions and site development projects and the impacts of potential delays to such expansions and development projects;
Current wording
•our ability to realize benefits from planned plant capacity expansions and planned and current site development projects, including our conductive additives facility at La Porte, Texas, and the impacts of potential delays to such expansions and development projects;
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•$0.8 million of net unfavorable impact is related to financial derivative instruments primarily driven by net periodic changes in cross currency and interest rate swaps, partially offset by
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, the Company recognized Income before earnings in affiliated companies and income taxes of $69.5 million, compared to $108.2 million in the six months ended June 30, 2023. The provision for income taxes was an expense of $22.6 million and $36.1 million for the six months ended June 30, 2024 and June 30, 2023, respectively. The effective tax rate for the six months ended June 30, 2024, was 32.5%, as compared to 33.4% for the six months ended June 30, 2023. Thedecrease in our effective tax rate for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was primarily attributable to changes in projected pre-tax income mix in countries with varying statutory tax rates.
Current report — wording carried from elsewhere
Adjusted EBITDA (A Non-GAAP Financial Measure)