Ecovyst Inc.

Previous wording

This periodic report on Form 10-Q (“Form 10-Q”) includes “forward-looking statements” that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should” and similar expressions are intended to identify these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. Examples of forward-looking statements include, but are not limited to, statements we make regarding demand trends, economic effects on our operations and financial results and our liquidity, potential strategic acquisitions or divestitures, potential increased borrowing under our credit facilities, and our belief that our current level of operations, cash and cash equivalents, cash flow from operations and borrowings under our credit facilities and other lines of credit will provide us adequate cash to fund working capital requirements, capital expenditure projects, debt service requirements and other requirements for our business for at least the next twelve months.

Current wording

This periodic report on Form 10-Q (“Form 10-Q”) includes “forward-looking statements” that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should” and similar expressions are intended to identify these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. Examples of forward-looking statements include, but are not limited to, statements we make regarding demand trends, economic effects on our operations and financial results and our liquidity, potential strategic acquisitions or divestitures, the strategic review of our Advanced Materials & Catalysts segment, potential increased borrowing under our credit facilities, and our belief that our current level of operations, cash and cash equivalents, cash flow from operations and borrowings under our credit facilities and other lines of credit will provide us adequate cash to fund working capital requirements, capital expenditure projects, debt service requirements and other requirements for our business for at least the next twelve months.

Previous wording

•disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations; and

Current wording

•disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations;

Previous 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.

Current wording

We are a leading integrated and innovative global provider of advanced materials, specialty catalysts, virgin sulfuric acid and sulfuric acid regeneration 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 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.

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. The Company did not repurchase any of its common stock pursuant to the stock repurchase program during the three months ended March 31, 2025 and 2024. As of March 31, 2025, $229.6 million was available for share repurchases under the program.

Previous wording

Adjusted EBITDA and Adjusted Net Income are financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our competitors. Adjusted EBITDA and Adjusted Net Income are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net income attributable to continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net income and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture. Adjusted Net Income consists of net income adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net income that we do not consider indicative of our ongoing operating performance. We believe that these non-GAAP financial measures provide investors with useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business.

Current wording

Adjusted EBITDA, Adjusted Net Income and Net Debt are financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our competitors. Adjusted EBITDA, Adjusted Net Income, and Net Debt are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net (loss) income attributable to continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture. Adjusted Net Income consists of net (loss) income adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance. Net Debt consists of total debt less cash and cash equivalents. We believe that these non-GAAP financial measures provide investors with useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business.

Previous wording

You should not consider Adjusted EBITDA or Adjusted Net Income in isolation or as alternatives to the presentation of our financial results in accordance with GAAP. The presentation of Adjusted EBITDA and Adjusted Net Income financial measures may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. In evaluating Adjusted EBITDA and Adjusted Net Income, you should be aware that we are likely to incur expenses similar to those eliminated in this presentation in the future and that certain of these items could be considered recurring in nature. Our presentation of Adjusted EBITDA and Adjusted Net Income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Reconciliations of Adjusted EBITDA and Adjusted Net Income to GAAP net income are included in the results of operations discussion that follows for each of the respective periods.

Current wording

You should not consider Adjusted EBITDA, Adjusted Net Income, or Net Debt in isolation or as alternatives to the presentation of our financial results in accordance with GAAP. The presentation of Adjusted EBITDA, Adjusted Net Income and Net Debt financial measures may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. In evaluating Adjusted EBITDA and Adjusted Net Income, you should be aware that we are likely to incur expenses similar to those eliminated in this presentation in the future and that certain of these items could be considered recurring in nature. Our presentation of Adjusted EBITDA and Adjusted Net Income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Reconciliations of Adjusted EBITDA, Adjusted Net Income to GAAP net (loss) income and Net Debt to GAAP total debt are included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for each of the respective periods.

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. 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.

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 our customer’s fixed bed catalyst replacements.

Previous 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.

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.

Previous wording

The primary raw materials for our Ecoservices segment include spent sulfuric acid, sulfur, acids, bases (including sodium hydroxide, or “caustic soda”) and certain metals. Spent sulfuric acid for our Ecoservices segment is supplied by customers for a nominal charge as part of their contracts. The primary raw materials used in the manufacture of products in our Advanced Materials & Catalysts segment include sodium silicate and cesium hydroxide.

Current wording

The primary raw materials for our Ecoservices segment include spent sulfuric acid, sulfur, acids, bases (including sodium hydroxide, or “caustic soda”) and certain metals. Spent sulfuric acid for our Ecoservices segment is supplied by customers as part of their contracts. The primary raw materials used in the manufacture of products in our Advanced Materials & Catalysts segment include sodium silicate and cesium hydroxide.

Previous wording

Most of our Ecoservices contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. Over 80% of our Ecoservices segment sales for the year ended December 31, 2023 were under contracts featuring quarterly price adjustments. The price adjustments generally reflect actual costs for producing acid and tend to protect us from volatility in labor, fixed costs and raw material pricing. The take-or-pay volume protection allows us to cover fixed costs through intermittent, temporary production issues at customer refineries.

Current wording

Most of our Ecoservices contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. About 90% of our Ecoservices segment sales for the year ended December 31, 2024 were under contracts featuring quarterly price adjustments. The price adjustments generally reflect actual costs for producing acid and tend to protect us from volatility in labor, fixed costs and raw material pricing. The take-or-pay volume protection allows us to cover fixed costs through intermittent, temporary production issues at customer refineries.

Previous wording

We account for our investments in our equity joint ventures under the equity method. Our joint venture, the Zeolyst Joint Venture, manufactures high-performance, specialty, zeolite-based catalysts, used in emission control, refining and petrochemical industry applications and by the broader chemicals industry. Demand for the Zeolyst Joint Venture products fluctuates based upon the timing of our customer’s fixed bed catalyst replacements. We share proportionally in the management of our joint venture with the other parties to such joint venture.

Current wording

We account for our investments in our equity joint ventures under the equity method. Our joint venture, the Zeolyst Joint Venture, manufactures high-performance, specialty, zeolite-based catalysts, used in emission control, refining and petrochemical industry applications and by the broader chemicals industry. 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. We share proportionally in the management of our joint venture with the other parties to such joint venture.

Previous wording

Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations generally result in higher sales and working capital requirements in the second and third quarter.

Current wording

Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations generally result in higher sales and working capital requirements in the second and third quarters.

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 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.

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 three months ended March 31, 2025 and for the year ended December 31, 2024 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

The following is a summary of our financial performance for the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

Current wording

The following is a summary of ourfinancial performance for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Previous 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.

Current wording

•Operating (loss) income decreased by $14.8 million to $0.9 million. The decrease in operating (loss) income was due to a decrease in gross profit and higher other operating expense, net, partially offset by lower selling, general and administrative expenses.

Previous 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.

Current wording

Equity in Net Income of Affiliated Companies

Previous 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.

Current wording

•Equity in net income of affiliated companies for the three months ended March 31, 2025 was $8.9 million, compared to $2.1 million for the three months ended March 31, 2024. The increase of $6.8 million was due to higher earnings from the Zeolyst Joint Venture during the three months ended March 31, 2025, driven by higher sales volume.

Previous wording

The following is our unaudited condensed consolidated statements of income and a summary of financial results for the three months ended September 30, 2024 and 2023:

Current wording

The following is our unaudited condensed consolidated statements of (loss) income and a summary of financial results for the three months ended March 31, 2025 and 2024:

Previous 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.

Current wording

Ecoservices: Sales in Ecoservices for the three months ended March 31, 2025 were $143.1 million, an increase of $1.5 million, or 1.1%, compared to sales of $141.6 million for the three months ended March 31, 2024. The change in sales reflects higher average selling prices of $6.0 million, inclusive of the impact associated with the pass-through of higher sulfur costs of approximately $7 million, offset by lower sales volume of $4.5 million.

Previous wording

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 wording

Advanced Materials & Catalysts: Sales in Advanced Materials & Catalysts for the three months ended March 31, 2025 were $19.1 million, an increase of $0.2 million, or 1.1%, compared to sales of $18.9 million for the three months ended March 31, 2024. The change in sales was primarily due to higher sales of niche custom catalysts associated with order timing, partially offset by lower sales of advanced silicas used for the production of polyethylene compared to the three months ended March 31, 2024.

Previous 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.

Current wording

Gross profit for the three months ended March 31, 2025 was $25.6 million, a decrease of $13.6 million, or 34.7%, compared to $39.2 million for the three months ended March 31, 2024. The decrease in gross profit was primarily driven by unfavorable manufacturing costs of $10.3 million, lower average selling prices of $1.0 million, exclusive of the approximately $7 million of pass-through of higher sulfur costs, and lower sales volume of $2.3 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 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.

Current wording

Average selling prices were lower primarily due to the pass-through of lower energy and other indexed costs. The higher manufacturing costs were primarily driven by planned maintenance turnaround costs and general inflation. The decrease in sales volume was primarily related to maintenance turnaround activity at our facilities and our customers’ facilities during the first quarter of 2025.

Previous 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.

Current wording

Selling, general and administrative expenses for the three months ended March 31, 2025 were $21.3 million, a decrease of $0.3 million, as compared to $21.6 million for the three months ended March 31, 2024. The decrease in selling, general and administrative expenses was mainly due to a decrease in stock compensation of $0.6 million and professional fees of $0.5 million, partially offset by an increase in other compensation-related expenses of $0.5 million and other expenses of $0.3 million.

Previous 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.

Current wording

Other operating expense, net for the three months ended March 31, 2025 was $5.2 million, an increase of $1.5 million, compared to $3.7 million for the three months ended March 31, 2024. The increase in other operating expense, net was mainly driven by an increase of $1.8 million in transaction costs, partially offset by a decrease in net losses on asset disposals of $0.5 million.

Previous 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.

Current wording

Equity in net income of affiliated companies for the three months ended March 31, 2025 was $8.9 million, compared to $2.1 million for the three months ended March 31, 2024. The increase in earnings from the Zeolyst Joint Venture was driven by higher hydrocracking catalyst and specialty catalyst sales, partially offset by lower sales of catalysts used in emission control and customized catalyst applications during thethree months ended March 31, 2025 compared to the prior year.

Previous 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.

Current wording

Interest expense, net forthe three months ended March 31, 2025 was $11.0 million, a decrease of $2.4 million, as compared to $13.4 million for the three months ended March 31, 2024. The decrease in interest expense, net was primarily due to the year over year decrease in variable rates in part due to the reduction in our spread associated with the 2025 Term Loan refinancing transactions and lower outstanding debt during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, partially offset by lower benefit from our interest rate caps.

Previous 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.

Current wording

Debt modification and extinguishment costs for thethree months ended March 31, 2025 were$1.0 million. On January 30, 2025, we amended our existing senior secured term loan facility to reduce the applicable interest rates. The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was a modification of debt. As a result, we recorded $1.0 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of (loss) income during the three months ended March 31, 2025.

Previous wording

The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the three months ended September 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 associated with 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 three months ended March 31, 2025 was mainly due to state and local taxes and a discrete shortfall tax expense related to stock compensation.

Previous 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.

Current wording

For the foregoing reasons, net loss was $3.6 million for the three months ended March 31, 2025, compared to net income of $1.2 million for the three months ended March 31, 2024.

Previous wording

(1)We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Adjusted EBITDA. Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.

Current wording

(1)We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Adjusted EBITDA. Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net (loss) income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.

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 $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.

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 $12.7 million for the three months ended March 31, 2025, which includes $8.9 million of equity in net income, excluding $0.6 million of amortization of investment in affiliate step-up plus $3.2 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 $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.

Current wording

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $6.9 million for the three months ended March 31, 2024, which includes $2.1 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

Ecoservices: Adjusted EBITDA for the nine months ended September 30, 2024 was $146.3 million, a decrease of $5.3 million, or 3.5%, compared to $151.6 million for the nine months ended September 30, 2023. The decrease in Adjusted EBITDA was primarily a result of higher turnaround and planned maintenance costs and unfavorable net pricing, reflecting the timing and contractual pass-through of certain costs including energy and other indexed costs. This was partially offset by higher sales volume of both virgin sulfuric acid and regeneration services.

Current wording

Ecoservices: Adjusted EBITDA for the three months ended March 31, 2025 was $28.5 million, a decrease of $13.0 million, or 31.3%, compared to $41.5 million for the three months ended March 31, 2024. The decrease in Adjusted EBITDA was driven by approximately $8 million of higher manufacturing costs associated with planned maintenance turnaround costs, the timing of fixed cost absorption, and general inflation, approximately $3 million of lower volume driven by the maintenance turnaround activity at our facilities and our customers’ facilities, and approximately $2 million of unfavorable net pricing, reflecting the timing and contractual pass-through of certain costs, including energy and other indexed costs.

Previous wording

Advanced Materials & Catalysts: Adjusted EBITDA for the nine months ended September 30, 2024 was $36.8 million, a decrease of $17.9 million or 32.7%, compared to $54.7 million for the nine 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 hydrocracking catalyst sales through the nine months ended September 30, 2024 compared to prior year.

Current wording

Advanced Materials & Catalysts: Adjusted EBITDA for the three months ended March 31, 2025 was $17.5 million, an increase of $6.4 million or 57.7%, compared to $11.1 million for the three months ended March 31, 2024. The increase in Adjusted EBITDA was primarily a result of higher sales volume within the Zeolyst Joint Venture driven by higher hydrocracking catalyst and specialty catalyst sales, partially offset by lower sales of catalysts used in emission control and customized catalyst applications.

Previous wording

A reconciliation of net income to Adjusted EBITDA is as follows:

Current wording

A reconciliation of net (loss) income to Adjusted EBITDA is as follows:

Previous wording

(a)We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Advanced Materials & Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.

Current wording

(a)We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Advanced Materials & Catalysts segment reflects our 50% portion of the earnings from the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.

Previous 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.

Current wording

(d)Reflects the exclusion of the foreign currency transaction gains and losses in the statements of (loss) income related to the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt, denominated in foreign currency.

Previous wording

(1)We define Adjusted Net Income as net income adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted Net Income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted Net Income may not be comparable with net income or Adjusted Net Income as defined by other companies.

Current wording

(1)We define Adjusted Net Income as net (loss) income adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net (loss) income that we do not consider indicative of our ongoing operating performance. Adjusted Net Income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted Net Income may not be comparable with net (loss) income or Adjusted Net Income as defined by other companies.

Previous wording

The adjustments to net income are shown net of applicable tax rates of 25.1% and 27.4% for the nine months ended September 30, 2024 and 2023, respectively, except for equity-based compensation. The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec. 162(m), and adding the tax effect of equity-based stock compensation shortfall recorded as a discrete item.

Current wording

The adjustments to net (loss) income are shown net of applicable tax rates of 23.8% and 24.6% for the three months ended March 31, 2025 and 2024, respectively, except for equity-based compensation. The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec. 162(m), and adding the tax effect of equity-based stock compensation shortfall recorded as a discrete item.

Previous wording

We believe that our existing cash and cash equivalents and cash flows from operations, combined with availability under our ABL Facility, will be sufficient to meet our presently anticipated future cash needs for at least the next twelve months. We may also pursue strategic acquisition or divestiture opportunities, which may impact our future cash requirements. We may, from time to time, increase borrowings under our ABL Facility to meet our future cash needs. As of September 30, 2024, we had cash and cash equivalents of $123.5 million and availability of $64.5 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $188.0 million. We did not have any revolving credit facility borrowings as of September 30, 2024. As of September 30, 2024, we were in compliance with all covenants under our debt agreements.

Current wording

We believe that our existing cash and cash equivalents and cash flows from operations, combined with availability under our ABL Facility, will be sufficient to meet our presently anticipated future cash needs for at least the next twelve months. We may also pursue strategic acquisition or divestiture opportunities, which may impact our future cash requirements. We may, from time to time, increase borrowings under our ABL Facility to meet our future cash needs. As of March 31, 2025, we had cash and cash equivalents of $127.5 million and availability of $73.6 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $201.1 million. We did not have any revolving credit facility borrowings as of March 31, 2025. As of March 31, 2025, we were in compliance with all covenants under our debt agreements.