Ecovyst Inc
For the period ended Sep 30, 2024. Filed Nov 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.
Sep 30, 2024 · Filed Nov 1, 2024
ECVT$10.49+3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001708035-24-000101
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0001708035-24-000117
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 193 previous paragraphs and 193 current paragraphs.
124 unchanged; 56 reworded; 12 added; 10 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 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 (12)
Current report
•Gross profit increased $1.5 million to $54.7 million. The increase ingross profit was primarily due to higher average selling pricing and higher sales volume, partially offset by unfavorable manufacturing costs.
Current report
Ecoservices: Sales in Ecoservices for the three months ended September 30, 2024 were $153.9 million, an increase of $6.3 million, or 4.3%, compared to sales of $147.6 million for the three months ended September 30, 2023. The increase in sales was due to higher average selling prices of $3.0 million and higher sales volume of $3.3 million. The impact associated with the pass-through of lower sulfur costs was immaterial for the three months ended September 30, 2024.
Current report
Average selling prices were higher primarily due to favorable contractual pricing in regeneration services. The increase in sales volume was primarily related to the increased demand for virgin sulfuric acid.
Current report
Advanced Materials & Catalysts: Sales in Advanced Materials & Catalysts for the three months ended September 30, 2024 were $25.3 million, a decrease of $0.4 million, or 1.6%, compared to sales of $25.7 million for the three months ended September 30, 2023. The decrease of $0.4 million was primarily due to the timing of niche custom catalysts sales, partially offset by higher advanced silicas used for the production of polyethylene.
Current report
Gross profit for the three months ended September 30, 2024 was $54.7 million, an increase of $1.5 million, or 2.8%, compared to $53.2 million for the three months ended September 30, 2023. The increase in gross profit was primarily due to higher average selling prices of $3.0 million, higher sales volume and mix of $3.3 million, partially offset by unfavorable manufacturing costs of $4.8 million.
Current report
Average selling prices were higher primarily due to the favorable contractual pricing in regeneration services. The increase in sales volume was primarily related to higher demand for virgin sulfuric acid and higher advanced silicas used for the production of polyethylene. Higher manufacturing costs were driven by general inflation, higher planned maintenance costs and costs associated with our manufacturing plant reliability improvement program in Ecoservices.
Current report
Interest expense, net for the three months ended September 30, 2024 was $11.3 million, a decrease of $0.5 million, as compared to $11.8 million for the three months ended September 30, 2023. The decrease in interest expense, net was primarily due to the period over period decrease in the interest rate spread on the term loan during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Current report
During the fourth quarter of 2024, the Company expects to recognize $8,023 of previously net unrecognized tax benefits, excluding interest and penalties, primarily due to the expiration of statutes of limitations during October 2024.
Current report
Ecoservices: Adjusted EBITDA for the three months ended September 30, 2024 was $55.1 million, an increase of $0.4 million, or 0.7%, compared to $54.7 million for the three months ended September 30, 2023. The increase in Adjusted EBITDA was a result of favorable contractual pricing for regeneration services and higher sales volume of virgin sulfuric acid, partially offset by higher manufacturing costs associated with inflation, increased planned maintenance costs and costs associated with the manufacturing plant reliability improvement program.
Current report
Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023
Current report
During the fourth quarter of 2024, the Company expects to recognize $8,023 of previously net unrecognized tax benefits, excluding interest and penalties, primarily due to the expiration of statutes of limitations during October 2024.
Current report
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $31.3 million for the nine months ended September 30, 2023, which includes $16.4 million of equity in net income, excluding $4.8 million of amortization of investment in affiliate step-up plus $10.1 million of joint venture depreciation, amortization and interest.
Removed paragraphs (10)
Previous report
Average selling price was lower primarily due to the pass-through of lower costs, including sulfur, natural gas, freight and other variable costs. The increase in sales volume was primarily related to increased demand for regeneration services and virgin sulfuric acid.
Previous report
Advanced Materials & Catalysts: Sales in Advanced Materials & Catalysts for the three months ended June 30, 2024 were $28.9 million, an increase of $2.9 million, or 11.2%, compared to sales of $26.0 million for the three months ended June 30, 2023. Of the increase in sales, $2.7 million was associated with higher sales volume and $0.2 million associated with higher average selling prices.
Previous report
The increase in sales volume was primarily driven by higher end use demand for niche custom catalysts.
Previous report
Gross profit for the three months ended June 30, 2024 was $53.7 million, a decrease of $7.3 million, or 12.0%, compared to $61.0 million for the three months ended June 30, 2023. The decrease in gross profit was primarily due to lower average selling prices of $13.5 million, exclusive of the pass-through of lower sulfur costs, partially offset by favorable variable costs of $1.6 million along with higher sales volume of $7.7 million.
Previous report
Ecoservices: Adjusted EBITDA for the three months ended June 30, 2024 was $49.7 million, a decrease of $10.4 million, or 17.3%, compared to $60.1 million for the three months ended June 30, 2023. Thedecrease in Adjusted EBITDAwas a result of unfavorable net pricing, reflecting the timing and contractual pass-through of certain costs, including energy and other indexed costs and an increase in turnaround and maintenance costs, partially offset by higher sales volume in both regeneration services and virgin sulfuric acid.
Previous report
Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Previous report
•Gross profit decreased $4.6 million to $92.9 million. The decrease in gross profit was primarily due to lower average selling price, partially offset by favorable variable costs.
Previous report
Ecoservices: Sales in Ecoservices for the six months ended June 30, 2024 were $295.6 million, a decrease of $0.2 million, or 0.1%, compared to sales of $295.8 million for the six months ended June 30, 2023. The change in sales reflects higher sales volume of $33.1 million, offset by lower average selling pricing of $33.3 million, before adjusting for the impact of the pass-through of lower sulfur costs of approximately $8 million.
Previous report
Debt Extinguishment Costs
Previous report
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $21.6 million for the six months ended June 30, 2023, which includes $11.6 million of equity in net income, excluding $3.2 million of amortization of investment in affiliate step-up plus $6.8 million of joint venture depreciation, amortization and interest.
Reworded paragraphs (56)
Previous wording
We are a leading integrated and innovative global provider of specialty catalysts and services. We believe that our products and services contribute to improving the sustainability of the environment.
Current wording
We are a leading integrated and innovative global provider of advanced materials, specialty catalysts and services. We believe that our products and services contribute to improving the sustainability of the environment.
Previous wording
On April 27, 2022, the Board approved a stock repurchase program that authorized the Company to purchase up to $450.0 million of the Company’s common stock over the four-year period from the date of approval. For the six months ended June 30, 2024, the Company repurchased 552,081 shares on the open market at an average price of $9.05 per share, for a total of $5.0 million excluding brokerage commissions and accrued excise tax. As of June 30, 2024, $229.6 million was available for share repurchases under the program.
Current wording
On April 27, 2022, the Board approved a stock repurchase program that authorized the Company to purchase up to $450.0 million of the Company’s common stock over the four-year period from the date of approval. For the nine months ended September 30, 2024, the Company repurchased 552,081 shares on the open market at an average price of $9.05 per share, for a total of $5.0 million excluding brokerage commissions and accrued excise tax. As of September 30, 2024, $229.6 million was available for share repurchases under the program.
Previous wording
For the six months ended June 30, 2023, in connection with secondary offerings of the Company’s common stock by an equity sponsor in March and May 2023, the Company repurchased 7,000,000 shares of its common stock in the offerings from underwriters at a weighted average price of $10.48 per share concurrently with the close of the offerings, for a total of $73.4 million, excluding accrued excise tax.
Current wording
For the nine months ended September 30, 2023, the Company repurchased 541,494 shares on the open market at an average price of $9.85, for a total of $5.3 million, excluding brokerage commissions and accrued excise tax. Additionally, in connection with secondary offerings of the Company’s common stock by an equity sponsor in March and May 2023, the Company repurchased 7,000,000 shares of its common stock in the offerings from underwriters at a weighted average price of $10.48 per share concurrently with the close of the offerings, for a total of $73.4 million, excluding accrued excise tax.
Previous wording
Sales in our Ecoservices and Advanced Materials & Catalysts segments are made on both a purchase order basis and pursuant to long-term contracts. Our Advanced Materials & Catalysts segment may also experience demand fluctuations based upon the timing of some of our customer’s fixed bed catalyst replacements.
Current wording
Sales in our Ecoservices and Advanced Materials & Catalysts segments are made on both a purchase order basis and pursuant to long-term contracts. Within the Zeolyst Joint Venture, included in our Advanced Materials & Catalysts segment, we may also experience demand fluctuations based upon the timing of some of our customer’s fixed bed catalyst replacements or the timing of sales of catalysts used in the production of sustainable fuels.
Previous wording
Overall, our Ecoservices and Advanced Materials & Catalysts segments continued to benefit from positive demand trends for our products and services in the industries we serve. For Ecoservices, strong domestic and export demand for refined products continued to support high refinery utilization rates, while more stringent gasoline standards and growing demand for premium gasoline to power higher-compression and turbo-charged engines continued to drive demand for alkylate and for our regeneration services. In addition, demand for virgin sulfuric acid across a wide range of industrial applications remained favorable. For our Advanced Materials & Catalysts segment, global polyethylene demand remained positive, supporting our sales of polyethylene catalysts. Hydrocracking catalyst sales experienced demand fluctuations driven by customer order timing associated by the timing of fixed bed catalyst replacement cycles. In addition, we expect variability in specialty and niche-custom catalyst sales, which tend to be event driven.
Current wording
Our Ecoservices and Advanced Materials & Catalysts segments continued to benefit from positive demand trends for our products and services in the majority of end uses we serve. For Ecoservices, strong domestic and export demand for refined products continued to support high refinery utilization rates, while more stringent gasoline standards and growing demand for premium gasoline to power higher-compression and turbo-charged engines continued to drive demand for alkylate and for our regeneration services. In addition, demand for virgin sulfuric acid across a wide range of industrial applications remained favorable. For our Advanced Materials & Catalysts segment, global polyethylene demand remained positive, supporting our sales of polyethylene catalysts and catalysts supports. Within the Zeolyst Joint Venture, hydrocracking catalyst sales continued to reflect demand fluctuations driven by customer order timing associated by the timing of fixed bed catalyst replacement cycles and sales of niche-custom catalysts, which tend to be event driven, continued to reflect variability in customer order patterns.
Previous wording
With a current imbalance between the production of renewable diesel and current demand, we expect demand may decrease in the near to mid-term for catalyst sales into sustainable fuels. Similarly, given various macro-economic conditions which have adversely impacted sales of heavy-duty diesel vehicles, we have reduced our expectations for sales of emission control catalysts.
Current wording
With a current imbalance between the production capacity for renewable diesel and current demand, we continue to expect lower demand in the near to mid-term for catalyst sales into the production of renewable diesel. In addition, given various macro-economic conditions which have adversely impacted sales of heavy-duty diesel vehicles, we reduced our expectations for sales of emission control catalysts.
Previous wording
As a global business, we are subject to the impact of gains and losses on currency translations, which occur when the financial statements of foreign operations are translated into U.S. dollars. We operate in various geographies with approximately 5% of our sales for the six months ended June 30, 2024 and approximately 6% for the year ended December 31, 2023 in currencies other than the U.S. dollar. Because our consolidated financial results are reported in U.S. dollars, sales or earnings generated in currencies other than the U.S. dollar can result in a significant increase or decrease in the amount of those sales and earnings when translated to U.S. dollars. The foreign currency to which we have the most significant exchange rate exposure is the British pound.
Current wording
As a global business, we are subject to the impact of gains and losses on currency translations, which occur when the financial statements of foreign operations are translated into U.S. dollars. We operate in various geographies with approximately 5% of our sales for the nine months ended September 30, 2024 and approximately 6% for the year ended December 31, 2023 were in currencies other than the U.S. dollar. Because our condensed consolidated financial results are reported in U.S. dollars, sales or earnings generated in currencies other than the U.S. dollar can result in a significant increase or decrease in the amount of those sales and earnings when translated to U.S. dollars. The foreign currency to which we have the most significant exchange rate exposure is the British pound.
Previous wording
•Sales decreased $1.3 million to $182.8 million. The decrease in sales was primarily due to the result of lower average selling prices due to the pass-through of lower costs in Ecoservices, partially offset by higher sales volume in regeneration services, virgin sulfuric acid and advanced silicas.
Current wording
•Sales increased $5.9 million to $179.2 million. The increase in sales was primarily due to the result of higher average selling prices for regeneration services and higher sales volume of virgin sulfuric acid.
Previous wording
•Operating income decreased by $5.4 millionto $27.9 million. The decrease inoperating income was due to a decrease in gross profit and other operating expenses, net.
Current wording
•Operating income decreased by $0.4 millionto $31.6 million. The decrease in operating income was due to higher selling, general and administrative expenses, partially offset by higher gross profit and lower other operating expenses, net.
Previous wording
•Equity in net income of affiliated companies for the three months ended June 30, 2024 was $1.4 million, compared to $11.4 million for the three months ended June 30, 2023. The decrease of $10.0 million was due to lower earnings generated by the Zeolyst Joint Venture for the three months ended June 30, 2024, driven by lower sales volume.
Current wording
•Equity in net income of affiliated companies for the three months ended September 30, 2024 was a net loss of $0.9 million, compared to net income of $4.7 million for the three months ended September 30, 2023. The decrease of $5.6 million was due to lower earnings generated by the Zeolyst Joint Venture for the three months ended September 30, 2024, driven by lower sales volume.
Previous wording
Selling, general and administrative expenses for the three months ended June 30, 2024 were $22.7 million, an increase of $1.3 million, compared to $21.4 million for the three months ended June 30, 2023. The increase in selling, general and administrative expenses was primarily due to an increase in other compensation-related expenses of $4.0 million, offset by a decrease $1.2 million in stock compensation due to fewer overall awards granted and outstanding for thethree months ended June 30, 2024 as compared to the prior year period and decrease of $1.3 million in other expenses.
Current wording
Selling, general and administrative expenses for the three months ended September 30, 2024 were $20.0 million, an increase of $3.1 million, compared to $16.9 million for the three months ended September 30, 2023. The increase in selling, general and administrative expenses was primarily due to an increase in other compensation-related expenses of $3.7 million, offset by a decrease of $0.5 million in stock compensation due to fewer overall awards granted and outstanding for thethree months ended September 30, 2024.
Previous wording
Other operating expense, net for the three months ended June 30, 2024 was $3.1 million, a decrease of $3.2 million, compared to $6.3 million for the three months ended June 30, 2023. Thedecrease in other operating expense, net was primarily due to a decrease innet loss from asset disposals of $1.2 million, a decrease of $0.9 million in restructuring, integration and business optimization costs and a decrease of $1.1 million in transactions costs. The decrease in restructuring, integration and business optimization costs was primarily driven by lower business optimization costs and the decrease in transactions costs was primarily driven by lower costs associated with share repurchases.
Current wording
Other operating expense, net for the three months ended September 30, 2024 was $3.1 million, a decrease of $1.2 million, compared to $4.3 million for the three months ended September 30, 2023. The decrease in other operating expense, net was primarily due to a decrease in net loss from asset disposals of $0.8 million compared to the prior year.
Previous wording
Equity in net income of affiliated comp anies for the three months ended June 30, 2024 was $1.4 million, compared to $11.4 million for the three months ended June 30, 2023. The decrease was due to $10.0 million of lower earnings from the Zeolyst Joint Venture during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The decrease in earnings from the Zeolyst Joint Venture was due to lower sales volumeof catalyst used in the production of sustainable fuels, emission control catalysts and timing of niche custom catalysts.
Current wording
Equity in net income of affiliated comp anies for the three months ended September 30, 2024 was a net loss of $0.9 million, compared to net income of $4.7 million for the three months ended September 30, 2023. The decrease was due to $5.6 million of lower earnings from the Zeolyst Joint Venture during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease in earnings from the Zeolyst Joint Venture was due to lower sales volumeof catalysts used in the production of sustainable fuels and emission control applications, partially offset by higher sales of hydrocracking catalysts and custom catalysts.
Previous wording
Other expense, net for the three months ended June 30, 2024 was $0.4 million, a decrease of $0.2 million, as compared to $0.6 million for the three months ended June 30, 2023. The decrease in other expense, net primarily relates to a decrease of $0.3 million in other taxes.
Current wording
Other expense, net for the three months ended September 30, 2024 was $0.6 million, an increase of $0.2 million, as compared to $0.4 million for the three months ended September 30, 2023. The increase in other expense, net primarily relates to lower other income of $0.4 million during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, partially offset by a decrease in foreign currency exchange of $0.2 million mainly related to the remeasurement effects of monetary assets and liabilities, denominated in foreign currency.
Previous wording
The provision for income taxes for the three months ended June 30, 2024 was $3.1 million, compared to $8.8 million for the three months ended June 30, 2023. The effective income tax rate for the three months ended June 30, 2024 was 27.1%, compared to 25.2% for the three months ended June 30, 2023. The Company’s quarter over quarter effective income tax rate has fluctuated primarily due to an increased discrete tax impact relative to pre-tax book income related to a stock compensation shortfall and a discrete tax benefit associated with state and local tax law changes.
Current wording
The provision for income taxes for the three months ended September 30, 2024 was $4.5 million, compared to $7.9 million for the three months ended September 30, 2023. The effective income tax rate for the three months ended September 30, 2024 was 24.0%, compared to 32.3% for the three months ended September 30, 2023. The Company’s quarter over quarter effective income tax rate has fluctuated primarily due to a reduced discrete tax impact relative to pre-tax book income. The discrete tax items relate to a stock compensation shortfall, tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions and a tax benefit related to state tax refunds associated with prior tax years recorded during the current quarter.
Previous wording
For the foregoing reasons, net income was $8.3 million for the three months ended June 30, 2024, compared to $26.1 million for the three months ended June 30, 2023.
Current wording
For the foregoing reasons, net income was $14.3 million for the three months ended September 30, 2024, compared to $16.6 million for the three months ended September 30, 2023.
Previous wording
(2)The Adjusted EBITDA for the Advanced Materials & Catalysts segment includes our 50% portion of the Adjusted EBITDA from the Zeolyst Joint Venture. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $5.6 million for the three months ended June 30, 2024, which includes $1.4 million of equity in net income, excluding $0.9 million of amortization of investment in affiliate step-up plus $3.2 million of joint venture depreciation, amortization and interest.
Current wording
(2)The Adjusted EBITDA for the Advanced Materials & Catalysts segment includes our 50% portion of the Adjusted EBITDA from the Zeolyst Joint Venture. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $3.3 million for the three months ended September 30, 2024, which includes $0.9 million of equity in net loss, excluding $0.6 million of amortization of investment in affiliate step-up plus $3.6 million of joint venture depreciation, amortization and interest.
Previous wording
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $16.2 million for the three months ended June 30, 2023, which includes $11.4 million of equity in net income, excluding $1.6 million of amortization of investment in affiliate step-up plus $3.2 million of joint venture depreciation, amortization and interest.
Current wording
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $9.6 million for the three months ended September 30, 2023, which includes $4.7 million of equity in net income, excluding $1.6 million of amortization of investment in affiliate step-up plus $3.3 million of joint venture depreciation, amortization and interest.
Previous wording
Advanced Materials & Catalysts: Adjusted EBITDA for the three months ended June 30, 2024 was $14.7 million, a decrease of $10.7 million, or 42.1%, compared to $25.4 million for the three months ended June 30, 2023. The decrease in Adjusted EBITDA was primarily a result of lower sales volume within the Zeolyst Joint Venture associated with catalysts used in the production of sustainable fuels, emission control catalysts and timing of niche custom catalysts, partially offset by higher sales in Advanced Silicas.
Current wording
Advanced Materials & Catalysts: Adjusted EBITDA for the three months ended September 30, 2024 was $10.9 million, a decrease of $5.5 million, or 33.5%, compared to $16.4 million for the three months ended September 30, 2023. The decrease in Adjusted EBITDA was primarily a result of lower sales volume within the Zeolyst Joint Venture associated with catalysts used in the production of sustainable fuels and emission control applications, partially offset by higher sales of hydrocracking catalysts and custom catalysts. In Advanced Silicas, favorable mix and increased sales of advanced silicas used for the production of polyethylene helped drive higher Adjusted EBITDA.
Previous wording
(d)Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income related to the non-permanent intercompany debt denominated in local currency translated to U.S. dollars.
Current wording
(d)Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income related to the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt, denominated in foreign currency.
Previous wording
The following is a summary of ourfinancial performance for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current wording
The following is a summary of ourfinancial performance for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Previous wording
•Sales decreased $1.6 million to $343.4 million. The decrease in sales was primarily due to lower average selling price as a result of the pass-through of lower costs, partially offset by higher sales volume.
Current wording
•Sales increased $4.2 million to $522.5 million. The increase in sales was primarily due to higher sales volume of regeneration services and virgin sulfuric acid, partially offset by lower average selling price as a result of the pass-through of lower costs in Ecoservices and lower sales volume of advanced silicas.
Previous wording
•Gross profit decreased $7.3 million to $53.7 million. The decrease ingross profit was primarily due to lower average selling pricing, partially offset by higher volume and favorable variable costs.
Current wording
•Gross profit decreased $3.0 million to $147.6 million. The decrease in gross profit was primarily due to lower average selling price and unfavorable manufacturing costs, partially offset by higher sales volume and favorable variable costs.
Previous wording
•Operating income decreased by $0.2 million to $41.8 million. Thedecrease in operating income was due toa decrease in gross profit and other operating expenses, net.
Current wording
•Operating income decreased by $0.5 million to $73.4 million. The decrease in operating income was due to a decrease in gross profit and higher selling, general and administrative expenses, partially offset by lower other operating expense, net.
Previous wording
•Equity in net income of affiliated companies for the six months ended June 30, 2024 was $3.5 million, compared to $11.6 million for the six months ended June 30, 2023. The decrease of $8.1 million was due to lower earnings from the Zeolyst Joint Venture during the six months ended June 30, 2024, driven by lower sales volume.
Current wording
•Equity in net income of affiliated companies for the nine months ended September 30, 2024 was $2.5 million, compared to $16.3 million for the nine months ended September 30, 2023. The decrease of $13.8 million was due to lower earnings from the Zeolyst Joint Venture during the nine months ended September 30, 2024, driven by lower sales volume.
Previous wording
The following is our unaudited condensed consolidated statements of income and a summary of financial results for the six months ended June 30, 2024 and 2023:
Current wording
The following is our unaudited condensed consolidated statements of income and a summary of financial results for the nine months ended September 30, 2024 and 2023:
Previous wording
Ecoservices: Sales in Ecoservices for the three months ended June 30, 2024 were $153.9 million, a decrease of $4.2 million, or 2.7%, compared to sales of $158.1 million for the three months ended June 30, 2023. The decrease in sales was due to lower average selling prices of $17.0 million, inclusive of the negative impact associated with the pass-through of lower sulfur costs of approximately$3 million, partially offset by higher sales volume of $12.8 million.
Current wording
Ecoservices: Sales in Ecoservices for the nine months ended September 30, 2024 were $449.4 million, an increase of $6.0 million, or 1.4%, compared to sales of $443.4 million for the nine months ended September 30, 2023. The change in sales reflects higher sales volume of $36.4 million, offset by lower average selling prices of $30.4 million, inclusive of the negative impact associated with the pass-through of lower sulfur costs of approximately $7 million.
Previous wording
Sales volume was higher primarily due to increased virgin sulfuric acid and regeneration services sales for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 which had the adverse impact of Winter Storm Elliott and extended maintenance turnaround activity at our facilities in 2023, as well as strong demand for regeneration services in the gulf coast in 2024. Average selling price was lower primarily due to the pass-through of lower costs, including sulfur, natural gas, freight and other variable costs.
Current wording
Sales volume was higher primarily due to increased virgin sulfuric acid and regeneration services sales for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, which had the adverse impact of Winter Storm Elliott and extended maintenance turnaround activity at our facilities in 2023, as well as strong demand for regeneration services in the gulf coast in 2024. Average selling prices were lower primarily due to the pass-through of lower costs, including sulfur, natural gas, freight and other variable costs.
Previous wording
Advanced Materials & Catalysts: Sales in Advanced Materials & Catalysts for the six months ended June 30, 2024 were $47.8 million, a decrease of $1.4 million, or 2.8%, compared to sales of $49.2 million for the six months ended June 30, 2023. The decrease in sales was primarily due to lower sales volume of advanced silicas used for the production of polyethylene compared to the six months ended June 30, 2023.
Current wording
Advanced Materials & Catalysts: Sales in Advanced Materials & Catalysts for the nine months ended September 30, 2024 were $73.1 million, a decrease of $1.8 million, or 2.4%, compared to sales of $74.9 million for the nine months ended September 30, 2023. The decrease in sales was primarily due to lower sales volume of advanced silicas used for the production of polyethylene compared to the nine months ended September 30, 2023.
Previous wording
Gross profit for the six months ended June 30, 2024 was $92.9 million, a decrease of $4.6 million, or 4.7%, compared to $97.5 million for the six months ended June 30, 2023. The decrease in gross profit was primarily driven by lower average selling prices of $25.3 million, exclusive of the approximately $8 million of pass-through of sulfur costs, partially offset by favorable variable costs along with higher sales volume of $11.1 million and unfavorable manufacturing costs of $9.6 million.
Current wording
Gross profit for the nine months ended September 30, 2024 was $147.6 million, a decrease of $3.0 million, or 2.0%, compared to $150.6 million for the nine months ended September 30, 2023. The decrease in gross profit was primarily driven by lower average selling prices of $23.0 million, exclusive of the approximately $7 million of pass-through of sulfur costs and unfavorable manufacturing costs, partially offset by favorable variable costs and higher sales volume of $14.3 million.
Previous wording
Average selling prices were lower primarily due to the pass-through of lower costs, including sulfur, natural gas, electricity and other variable costs. The higher manufacturing costs were primarily driven by planned maintenance turnaround. The increase in sales volume was primarily related to higher demand for regeneration services and virgin sulfuric acid.
Current wording
Average selling prices were lower primarily due to the pass-through of lower costs, including sulfur, natural gas, electricity and other variable costs. The higher manufacturing costs were primarily driven by planned maintenance turnaround costs, general inflation and costs associated with the manufacturing plant reliability improvement program in Ecoservices. The increase in sales volume was primarily related to higher demand for both regeneration services and virgin sulfuric acid.
Previous wording
Selling, general and administrative expenses for the six months ended June 30, 2024 were $44.3 million, an increase of $1.8 million, as compared to $42.5 million for the six months ended June 30, 2023. The increase in selling, general and administrative expenses was mainly due to an increase in other compensation-related expenses of $6.0 million, partially offset by a decrease in stock compensation of $1.6 million, professional fees of $0.6 million and other expenses of $2.0 million.
Current wording
Selling, general and administrative expenses for the nine months ended September 30, 2024 were $64.3 million, an increase of $4.8 million, as compared to $59.5 million for the nine months ended September 30, 2023. The increase in selling, general and administrative expenses was mainly due to an increase in other compensation-related expenses of $9.7 million, partially offset by a decrease in stock compensation of $2.1 million, professional fees of $0.5 million and other expenses of $2.0 million.
Previous wording
Other operating expense, net for the six months ended June 30, 2024 was $6.8 million, a decrease of $6.2 million, compared to $13.0 million for the six months ended June 30, 2023. Thedecrease in other operating expense, net was mainly driven by a decrease of $2.4 million in transaction costs, a decrease of $1.7 million inrestructuring, integration and business optimization costsand a decrease in net losses on asset disposals of $1.7 million. The decrease in restructuring, integration and business optimization costs was primarily driven by lower business optimization costs and the decrease in transactions costs was primarily associated with the sale of the Performance Chemicals business in 2021 and costs associated with share repurchases.
Current wording
Other operating expense, net for the nine months ended September 30, 2024 was $9.9 million, a decrease of $7.3 million, compared to $17.2 million for the nine months ended September 30, 2023. The decrease in other operating expense, net was mainly driven by a decrease of $2.6 million in transaction costs, a decrease of $1.7 million in restructuring, integration and business optimization costs and a decrease in net losses on asset disposals of $2.5 million.
Previous wording
Equity in net income of affiliated companies for the six months ended June 30, 2024 was $3.5 million, compared to $11.6 million for the six months ended June 30, 2023. The decrease in earnings from the Zeolyst Joint Venture was due to lower sales of catalysts used in the production of sustainable fuels, emission control catalysts and timing of niche custom catalysts.
Current wording
Equity in net income of affiliated companies for the nine months ended September 30, 2024 was $2.5 million, compared to $16.3 million for the nine months ended September 30, 2023. The decrease in earnings from the Zeolyst Joint Venture was driven by lower sales of catalysts used in the production of sustainable fuels and emission control applications, partially offset by higher hydrocracking catalyst sales during thenine months ended September 30, 2024 compared to the prior year.
Previous wording
Interest expense, net forthe six months ended June 30, 2024 was $26.3 million, an increase of $7.3 million, as compared to $19.0 million for the six months ended June 30, 2023. The increase in interest expense, net was primarily due to year over year increase in variable rates, which was partially offset by lower outstanding debt during the six months ended June 30, 2024, as compared tothe six months ended June 30, 2023. This was offset bythe benefits associated with our interest rate caps.
Current wording
Interest expense, net forthe nine months ended September 30, 2024 was $37.6 million, an increase of $6.8 million, as compared to $30.8 million for the nine months ended September 30, 2023. The increase in interest expense, net was primarily due to the year over year increase in variable rates, which was partially offset by lower outstanding debt during the nine months ended September 30, 2024, as compared tothe nine months ended September 30, 2023 andthe benefits associated with our interest rate caps.
Previous wording
Debt extinguishment costs for thesix months ended June 30, 2024 were$4.6 million. On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031. The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was primarily a modification of debt. As a result, we recorded $4.5 million of third-party financing fees as debt extinguishment costs in the condensed consolidated income statement during the six months ended June 30, 2024. In addition, previously unamortized deferred financing costs and original issue discount of$0.1 million associated with the existing senior secured term loan facility were written off as debt extinguishment costs for the six months ended June 30, 2024.
Current wording
Debt extinguishment costs for thenine months ended September 30, 2024 were$4.6 million. On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031. The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was primarily a modification of debt. As a result, we recorded $4.5 million of third-party financing fees as debt extinguishment costs in the condensed consolidated income statement during the nine months ended September 30, 2024. In addition, previously unamortized deferred financing costs and original issue discount of$0.1 million associated with the existing senior secured term loan facility were written off as debt extinguishment costs for the nine months ended September 30, 2024.
Previous wording
Other expense, net for the six months ended June 30, 2024 was $0.6 million, an increase of $0.4 million, as compared to $0.2 million for the six months ended June 30, 2023. Theincrease in other expense, net primarily consisted of an increase in foreign currency exchange of $0.8 million mainly related to the non-permanent intercompany debt denominated in local currency and translated to the U.S. dollar, offset by a decrease in pension costs of $0.1 million.
Current wording
Other expense, net for the nine months ended September 30, 2024 was $1.1 million, an increase of $0.5 million, as compared to $0.6 million for the nine months ended September 30, 2023. Theincrease in other expense, net primarily consisted of an increase in foreign currency exchange of $0.6 million mainly related to the remeasurement effects of monetary assets and liabilities, denominated in foreign currency.
Previous wording
The provision for income taxes for the six months ended June 30, 2024 was $4.3 million, compared to $9.7 million for the six months ended June 30, 2023. The effective income tax rate for the six months ended June 30, 2024 was 30.9%, compared to 28.3% for the six months ended June 30, 2023. The Company’s effective income tax rate for the six months ended June 30, 2024 was different from the effective tax rate for the six months ended June 30, 2023 primarily due to an increased discrete tax impact relative to pre-tax book income related to stock compensation shortfall recognized discretely in the respective quarters and a discrete tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions.
Current wording
The provision for income taxes for the nine months ended September 30, 2024 was $8.8 million, compared to $17.6 million for the nine months ended September 30, 2023. The effective income tax rate for the nine months ended September 30, 2024 was 26.9%, compared to 29.9% for the nine months ended September 30, 2023. The Company’s effective income tax rate for the nine months ended September 30, 2024 was different from the effective tax rate for the nine months ended September 30, 2023 primarily due to a reduced discrete tax impact relative to pre-tax book income. The discrete tax items relate to a stock compensation shortfall recognized discretely in the respective quarters, tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions and a tax benefit related to state tax refunds associated with prior tax years recorded during the current quarter.
Previous wording
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the six months ended June 30, 2024 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation and a discrete tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions.
Current wording
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2024 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation, a discrete tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions and recording a tax benefit related to tax refunds associated with prior years.
Previous wording
For the foregoing reasons, net income was $9.5 million for the six months ended June 30, 2024, compared to $24.7 million for the six months ended June 30, 2023.
Current wording
For the foregoing reasons, net income was $23.8 million for the nine months ended September 30, 2024, compared to $41.2 million for the nine months ended September 30, 2023.
Showing the first 40 of 56 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Average selling prices were lower primarily due to the pass-through of lower costs, including sulfur, natural gas, electricity, and other variable costs. The increase in sales volume was primarily related to higher demand for regeneration services and virgin sulfuric acid.
Previous report — wording carried elsewhere
Interest expense, net for the three months ended June 30, 2024 was $12.9 million, an increase of $3.7 million, as compared to $9.2 million for the three months ended June 30, 2023. The increase in interest expense, net was primarily due to the year over year increase in variable rates, which was partially offset by lower outstanding debt during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023 and benefits associated with the interest rate caps.
Previous report — wording carried elsewhere
Debt extinguishment costs for the three months ended June 30, 2024 were $4.6 million. On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031. The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was primarily a modification of debt. As a result, we recorded $4.5 million of third-party financing fees as debt extinguishment costs in the condensed consolidated income statement during the three months ended June 30, 2024. In addition, previously unamortized deferred financing costs and original issue discount of $0.1 million associated with the existing senior secured term loan facility were written off as debt extinguishment costs for the three months ended June 30, 2024.