Ecovyst Reports Fourth Quarter and Full Year 2023 Results
Full Year 2023 Results & Highlights
- Sales of
$691.1 million , compared to$820.2 million in 2022. The change is primarily due to the pass through of lower sulfur costs of$86 million , and lower sales volume. Sales volume was negatively impacted by Winter Storm Elliott, extended turnaround activity as well as lower end use demand and destocking in nylon intermediates for virgin sulfuric acid and polyethylene catalysts. - Net income from continuing operations of
$71.2 million . Net income margin of 10.3%, with diluted income per share of$0.60 . - Adjusted net income of
$89.8 million , with Adjusted diluted income per share of$0.75 . - Adjusted EBITDA of
$259.9 million , with an Adjusted EBITDA margin of 30.7%. - Full year net cash from operations of
$137.6 million , Adjusted Free Cash Flow of$72.3 million , with net debt to net income ratio of 11.1x, and a net debt leverage ratio of 3.0x. - Full year share repurchases of 7,541,494 shares or
$78.7 million . Excluding cash used for share repurchases in 2023, the net debt leverage ratio would have been 2.7x. - Achieved a Platinum sustainability rating from
EcoVadis , placingEcovyst in the top one percent of all companies rated in our peer group
Fourth Quarter 2023 Results & Highlights
- Sales of
$172.8 million , compared to$182.8 million in the fourth quarter of 2022, the decrease reflecting the price pass-through of lower sulfur costs of approximately$9 million . - Net income from continuing operations of
$30.0 million . Net income margin of 17.4%, with diluted income per share of$0.26 . - Adjusted net income of
$26.1 million with Adjusted diluted income per share of$0.22 . - Adjusted EBITDA of
$69.8 million , up 0.9% period-over-period with an Adjusted EBITDA margin of 30.9%.
Financial results and outlook include non-GAAP financial measures. These non-GAAP measures are more fully described and are reconciled from the respective measures determined under GAAP in "Presentation of Non-GAAP Financial Measures" and the attached appendix.
"Despite the ongoing uncertainty in the macro-economic environment, stability in demand fundamentals for both our
Fourth Quarter and Full Year 2023 Results
For the year, sales were
Sales for the quarter ended
Review of Segment Results and Business Trends
While demand across the majority of product categories and end uses remained positive in 2023, during the second half of the year we saw weaker demand for sales of virgin sulfuric acid into the production of nylon intermediates and for sales of polyethylene catalysts, resulting from weaker global demand fundamentals and the impact of destocking. Our contractual pass-through mechanisms and targeted price increases served to mitigate the adverse impacts of inflationary pressures in 2023, including higher costs for energy, logistics, labor and other raw materials.
Our regeneration services support the production of alkylate, a high value gasoline component critical for meeting stringent gasoline standards and for producing premium grade gasoline. Tightening gasoline standards and increasing demand for higher-octane premium fuels used in high compression, more fuel-efficient engines resulted in higher utilization for our customers' alkylation units.
Fourth quarter 2023 sales for
For the year, sales were
Advanced Materials & Catalysts
Our Advanced Silicas are critical catalyst components for the production of high-density polyethylene, a high-strength and high-stiffness plastic used in bottles, containers, and molded applications and linear low-density polyethylene used predominately for films. While we expect long-term demand for polyethylene films and packaging to remain positive, late in the second quarter of 2023 we saw evidence of softer global demand and lower operating rates for polyethylene producers, which resulted in lower sales of polyethylene catalysts during the second half of 2023. Through the Zeolyst Joint Venture, we also supply specialty catalysts to customers for use in the production of both traditional and sustainable fuels, petrochemicals, and emission control systems for both on-road and non-road diesel engines. While demand for traditional fuels has remained positive, demand for sustainable fuels has increased, supporting higher sales of catalysts used in sustainable fuel production.
During the fourth quarter of 2023, Advanced Silicas sales were
For the year, Advanced Silicas sales were
Cash Flows and Balance Sheet
Cash flows from operating activities was
2024 Financial Outlook
Full year 2024 guidance is as follows:
- Sales of
$715 million to$755 million - Sales of
$145 million to$165 million for proportionate 50% share of Zeolyst Joint Venture, which is excluded from GAAP Sales - Adjusted EBITDA1 of
$255 million to$275 million - Adjusted Free Cash Flow1 of
$85 million to$105 million - Capital expenditures of
$70 million to$80 million - Interest expense of
$45 million to$55 million - Depreciation & Amortization
Ecovyst -$85 million to$95 million - Zeolyst J.V. -
$12 million to$14 million
- Effective tax rate in the mid 20% range
"We believe that our regeneration services business will experience another solid year in 2024, which will be somewhat offset by a timing related off-cycle year for hydrocracking catalysts. We are also cautious about the continuing uncertain economic conditions moderating demand recovery for virgin sulfuric acid and polyethylene catalysts.
1In reliance upon the unreasonable efforts exemption provided under Item 10(e)(1)(i)(B) of Regulation S-K, the Company is not able to provide a reconciliation of its non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation such as certain non-cash, nonrecurring or other items that are included in net income and EBITDA as well as the related tax impacts of these items and asset dispositions / acquisitions and changes in foreign currency exchange rates that are included in cash flow, due to the uncertainty and variability of the nature and amount of these future charges and costs. Because this information is uncertain, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Stock Repurchase Authorization
In
In connection with a secondary offering of the Company's common stock in
In connection with a secondary offering in
During the third quarter of 2023, the Company repurchased 541,494 shares of its common stock on the open market at an average price of
Future repurchases may also be conducted through negotiated transactions with an equity sponsor, open market repurchases or other means, including through Rule 10b-18 trading plans or through the use of other techniques such as accelerated share repurchases. For possible future repurchases, the actual timing, number and nature of the shares repurchased will depend on a variety of factors, including stock price, trading volume and general business and market conditions The repurchase program does not obligate the Company to acquire any number of shares in any specific period, or at all, and the repurchase program may be amended, suspended or discontinued at any time at the Company's discretion. As of
Conference Call and Webcast Details
On
Conference Call: Investors may listen to the conference call live via telephone by dialing 1 (800) 267-6316 (domestic) or
1 (203) 518-9848 (international) and using the participant code ECVTQ423.
Webcast: An audio-only live webcast of the conference call and presentation materials can be accessed at https://investor.ecovyst.com. A replay of the conference call/webcast will be made available at https://investor.ecovyst.com/events-presentations.
Investor Contact:
(484) 617-1225
gene.shiels@ecovyst.com
About
We have two uniquely positioned specialty businesses:
Presentation of Non-GAAP Financial Measures
In addition to the results provided in accordance with
Zeolyst Joint Venture
The Company's zeolite catalysts product group operates through its Zeolyst Joint Venture, which is accounted for as an equity method investment in accordance with GAAP. The presentation of the Zeolyst Joint Venture's sales represents 50% of the sales of the Zeolyst Joint Venture. The Company does not record sales by the Zeolyst Joint Venture as revenue and such sales are not consolidated within the Company's results of operations. However, the Company's Adjusted EBITDA reflects the share of earnings of the Zeolyst Joint Venture that have been recorded as equity in net income from affiliated companies in the Company's consolidated statements of income for such periods and includes Zeolyst Joint Venture adjustments on a proportionate basis based on the Company's 50% ownership interest. Accordingly, the Company's Adjusted EBITDA margins are calculated including 50% of the sales of the Zeolyst Joint Venture for the relevant periods in the denominator.
Note on Forward-Looking Statements
Some of the information contained in this press release constitutes "forward-looking statements." Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "projects" and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Examples of forward-looking statements include, but are not limited to, statements regarding our future results of operations, financial condition, liquidity, prospects, growth, strategies, capital allocation program (including the stock repurchase program), product and service offerings, expected demand trends and our 2024 financial outlook. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, regional, national or global political, economic, business, competitive, market and regulatory conditions, including tariffs and trade disputes, currency exchange rates, the effects of inflation and other factors, including those described in the sections titled "Risk Factors" and "Management's Discussion & Analysis of Financial Condition and Results of Operations" in our filings with the
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CONSOLIDATED STATEMENTS OF INCOME |
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(in millions, except share and per share amounts) |
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Three months ended
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% |
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Years ended
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% |
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2023 |
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2022 |
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Change |
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2023 |
|
2022 |
|
Change |
|
|
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Sales |
|
$ 172.8 |
|
$ 182.8 |
|
(5.5) % |
|
$ 691.1 |
|
$ 820.2 |
|
(15.7) % |
Cost of goods sold |
|
125.5 |
|
133.3 |
|
(5.9) % |
|
493.2 |
|
595.5 |
|
(17.2) % |
Gross profit |
|
47.3 |
|
49.5 |
|
(4.4) % |
|
197.9 |
|
224.7 |
|
(11.9) % |
Selling, general and administrative expenses |
|
19.7 |
|
17.5 |
|
12.6 % |
|
79.2 |
|
85.3 |
|
(7.2) % |
Other operating expense, net |
|
4.8 |
|
9.9 |
|
(51.5) % |
|
22.0 |
|
35.0 |
|
(37.1) % |
Operating income |
|
22.8 |
|
22.1 |
|
3.2 % |
|
96.7 |
|
104.4 |
|
(7.4) % |
Equity in net (income) from affiliated companies |
|
(14.3) |
|
(10.3) |
|
38.8 % |
|
(30.6) |
|
(27.7) |
|
10.5 % |
Interest expense, net |
|
13.9 |
|
10.3 |
|
35.0 % |
|
44.7 |
|
37.2 |
|
20.2 % |
Other (income) expense, net |
|
— |
|
(2.3) |
|
(100.0) % |
|
0.6 |
|
0.2 |
|
200.0 % |
Income before income taxes and noncontrolling interest |
|
23.2 |
|
24.4 |
|
(4.9) % |
|
82.0 |
|
94.7 |
|
(13.4) % |
(Benefit) provision for income taxes |
|
(6.8) |
|
2.9 |
|
(334.5) % |
|
10.8 |
|
24.9 |
|
(56.6) % |
Effective tax rate |
|
(29.3) % |
|
11.9 % |
|
(346.6) % |
|
13.2 % |
|
26.3 % |
|
|
Net income from continuing operations |
|
30.0 |
|
21.5 |
|
39.5 % |
|
71.2 |
|
69.8 |
|
2.0 % |
Net income from discontinued operations, net of tax |
|
— |
|
3.9 |
|
(100.0) % |
|
— |
|
3.9 |
|
(100.0) % |
Net income |
|
$ 30.0 |
|
$ 25.4 |
|
18.1 % |
|
$ 71.2 |
|
$ 73.7 |
|
(3.4) % |
|
|
|
|
|
|
|
|
|
|
|
|
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Income from continuing operations attributable to |
|
30.0 |
|
21.5 |
|
|
|
71.2 |
|
69.8 |
|
|
Income from discontinued operations attributable to |
|
— |
|
3.9 |
|
|
|
— |
|
3.9 |
|
|
Net income |
|
30.0 |
|
25.4 |
|
|
|
71.2 |
|
73.7 |
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Earnings per share: |
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Basic income per share - continuing operations |
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$ 0.26 |
|
$ 0.17 |
|
|
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$ 0.60 |
|
$ 0.52 |
|
|
Diluted income per share - continuing operations |
|
$ 0.26 |
|
$ 0.17 |
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|
|
$ 0.60 |
|
$ 0.52 |
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Weighted average shares outstanding: |
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|
|
|
|
|
|
|
|
|
|
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Basic |
|
116,116,895 |
|
125,962,111 |
|
|
|
118,367,214 |
|
133,601,322 |
|
|
Diluted |
|
117,190,747 |
|
127,538,343 |
|
|
|
119,487,709 |
|
135,088,172 |
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CONSOLIDATED BALANCE SHEETS |
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(in millions, except share and per share amounts) |
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ASSETS |
|
|
|
Cash and cash equivalents |
$ 88.4 |
|
$ 110.9 |
Accounts receivables, net |
81.3 |
|
74.8 |
Inventories, net |
45.1 |
|
44.4 |
Derivative assets |
13.4 |
|
18.5 |
Prepaid and other current assets |
17.8 |
|
19.1 |
Total current assets |
246.0 |
|
267.7 |
Investments in affiliated companies |
440.2 |
|
436.0 |
Property, plant and equipment, net |
576.9 |
|
584.9 |
|
404.5 |
|
403.2 |
Other intangible assets, net |
116.6 |
|
129.9 |
Right-of-use lease assets |
24.3 |
|
28.3 |
Other long-term assets |
29.3 |
|
34.6 |
Total assets |
$ 1,837.8 |
|
$ 1,884.6 |
LIABILITIES |
|
|
|
Current maturities of long-term debt |
$ 9.0 |
|
$ 9.0 |
Accounts payable |
40.2 |
|
40.0 |
Operating lease liabilities—current |
8.2 |
|
8.2 |
Accrued liabilities |
61.7 |
|
72.2 |
Total current liabilities |
119.1 |
|
129.4 |
Long-term debt, excluding current portion |
858.9 |
|
865.9 |
Deferred income taxes |
115.8 |
|
136.2 |
Operating lease liabilities—noncurrent |
16.0 |
|
20.0 |
Other long-term liabilities |
22.5 |
|
25.8 |
Total liabilities |
1,132.3 |
|
1,177.3 |
Commitments and contingencies |
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EQUITY |
|
|
|
Common stock ( |
1.4 |
|
1.4 |
Preferred stock ( |
— |
|
— |
Additional paid-in capital |
1,102.6 |
|
1,091.5 |
Accumulated deficit |
(170.9) |
|
(242.0) |
|
(226.7) |
|
(149.6) |
Accumulated other comprehensive (income) loss |
(0.9) |
|
6.0 |
Total equity |
705.5 |
|
707.3 |
Total liabilities and equity |
$ 1,837.8 |
|
$ 1,884.6 |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Years ended |
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2023 |
|
2022 |
Cash flows from operating activities: |
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(in millions) |
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Net income |
|
$ 71.2 |
|
$ 73.7 |
Net income from discontinued operations |
|
— |
|
(3.9) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
Depreciation |
|
70.6 |
|
65.1 |
Amortization |
|
14.0 |
|
14.0 |
Amortization of deferred financing costs and original issue discount |
|
2.1 |
|
2.0 |
Foreign currency exchange (gain) loss |
|
(0.6) |
|
1.0 |
Deferred income tax provision (benefit) |
|
(17.1) |
|
1.7 |
Net loss on asset disposals |
|
4.1 |
|
3.6 |
Stock compensation |
|
16.0 |
|
20.6 |
Equity in net income from affiliated companies |
|
(30.6) |
|
(27.7) |
Dividends received from affiliated companies |
|
28.0 |
|
35.0 |
Other, net |
|
0.6 |
|
(2.7) |
Working capital changes that provided (used) cash, excluding the effect of acquisitions and dispositions: |
|
|
|
|
Receivables |
|
(6.1) |
|
5.5 |
Inventories |
|
(1.4) |
|
9.9 |
Prepaids and other current assets |
|
(1.0) |
|
— |
Accounts payable |
|
2.4 |
|
(10.1) |
Accrued liabilities |
|
(14.6) |
|
(7.4) |
Net cash provided by operating activities, continuing operations |
|
137.6 |
|
180.3 |
Net cash provided by operating activities, discontinued operations |
|
— |
|
6.3 |
Net cash provided by operating activities |
|
137.6 |
|
186.6 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property, plant and equipment |
|
(65.3) |
|
(58.9) |
Payments for business divestiture, net of cash |
|
— |
|
(3.7) |
Business combinations, net of cash acquired |
|
— |
|
(0.5) |
Other, net |
|
— |
|
0.1 |
Net cash used in investing activities, continuing operations |
|
(65.3) |
|
(63.0) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Draw down of revolving credit facilities |
|
14.5 |
|
— |
Repayments of revolving credit facilities |
|
(14.5) |
|
— |
Repayments of long-term debt |
|
(9.0) |
|
(9.0) |
Repurchases of common shares |
|
(78.7) |
|
(136.7) |
Tax withholdings on equity award vesting |
|
(3.4) |
|
(0.3) |
Repayments of finance lease obligations |
|
(2.8) |
|
(2.7) |
Other |
|
0.4 |
|
0.6 |
Net cash used in financing activities, continuing operations |
|
(93.5) |
|
(148.1) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(1.3) |
|
(5.5) |
Net change in cash, cash equivalents and restricted cash |
|
(22.5) |
|
(30.0) |
Cash, cash equivalents and restricted cash at beginning of period |
|
110.9 |
|
140.9 |
Cash, cash equivalents and restricted cash at end of period |
|
$ 88.4 |
|
$ 110.9 |
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|
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Appendix Table A-1: Reconciliation of Net Income to Adjusted EBITDA |
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Three months ended
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Years ended
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2023 |
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2022 |
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2023 |
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2022 |
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(in millions) |
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Reconciliation of net income to Adjusted EBITDA |
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|
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Net income from continuing operations |
|
$ 30.0 |
|
$ 21.5 |
|
$ 71.2 |
|
$ 69.8 |
(Benefit) provision for income taxes |
|
(6.8) |
|
2.9 |
|
10.8 |
|
24.9 |
Interest expense, net |
|
13.9 |
|
10.3 |
|
44.7 |
|
37.2 |
Depreciation and amortization |
|
22.1 |
|
20.4 |
|
84.6 |
|
79.2 |
EBITDA |
|
59.2 |
|
55.1 |
|
211.3 |
|
211.1 |
Joint venture depreciation, amortization and interest(a) |
|
3.3 |
|
4.0 |
|
13.4 |
|
16.0 |
Amortization of investment in affiliate step-up(b) |
|
1.6 |
|
1.6 |
|
6.4 |
|
6.4 |
Net loss on asset disposals(c) |
|
0.8 |
|
2.4 |
|
4.1 |
|
3.6 |
Foreign currency exchange (gain) loss(d) |
|
(0.9) |
|
(0.8) |
|
(1.3) |
|
1.4 |
LIFO expense (benefit)(e) |
|
1.0 |
|
(0.2) |
|
3.5 |
|
(0.2) |
Transaction and other related costs(f) |
|
0.2 |
|
0.1 |
|
3.0 |
|
7.0 |
Equity-based compensation |
|
3.4 |
|
3.2 |
|
16.0 |
|
20.6 |
Restructuring, integration and business optimization expenses(g) |
|
0.3 |
|
5.2 |
|
2.7 |
|
11.6 |
Other(h) |
|
0.9 |
|
(1.4) |
|
0.8 |
|
(0.7) |
Adjusted EBITDA |
|
$ 69.8 |
|
$ 69.2 |
|
$ 259.9 |
|
$ 276.8 |
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Descriptions to Ecovyst Non-GAAP Reconciliations
(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. |
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(b) |
Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of |
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(c) |
When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use. |
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(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 |
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(e) |
Represents non-cash adjustments to the Company's LIFO reserves for certain inventories in the |
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(f) |
Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations. |
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(g) |
Includes the impact of restructuring, integration and business optimization expenses which are incremental costs that are not representative of our ongoing business operations. |
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(h) |
Other consists of adjustments for items that are not core to our ongoing business operations. These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen. Also included in this amount are adjustments to eliminate the benefit realized in cost of goods sold of the allocation of a portion of the contract manufacturing payments under the five-year agreement with the buyer of the Performance Chemicals business to the financing obligation under the failed sale-leaseback. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions). |
Appendix Table A-2: Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS(1) |
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Three months ended |
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2023 |
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2022 |
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Pre-tax |
Tax |
After- |
Per share, |
Per share, |
|
Pre-tax |
Tax |
After- |
Per share, |
Per share, |
|
(in millions, except share and per share amounts) |
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Net income from continuing operations |
$ 23.2 |
$ (6.8) |
$ 30.0 |
$ 0.26 |
$ 0.26 |
|
$ 24.4 |
$ 2.9 |
$ 21.5 |
$ 0.17 |
$ 0.17 |
Amortization of investment in affiliate step-up(b) |
1.6 |
0.3 |
1.3 |
0.01 |
0.01 |
|
1.6 |
0.2 |
1.4 |
0.01 |
0.01 |
Net loss on asset disposals(c) |
0.8 |
0.1 |
0.7 |
0.01 |
0.01 |
|
2.4 |
0.5 |
1.9 |
0.02 |
0.02 |
Foreign currency exchange gain(d) |
(0.9) |
(0.2) |
(0.7) |
(0.01) |
(0.01) |
|
(0.8) |
(0.1) |
(0.7) |
(0.01) |
(0.01) |
LIFO expense (benefit)(e) |
1.0 |
0.2 |
0.8 |
0.01 |
0.01 |
|
(0.2) |
(0.1) |
(0.1) |
— |
— |
Transaction and other related costs(f) |
0.2 |
— |
0.2 |
— |
— |
|
0.1 |
(0.6) |
0.7 |
0.01 |
0.01 |
Equity-based compensation |
3.4 |
0.3 |
3.1 |
0.03 |
0.03 |
|
3.2 |
(0.7) |
3.9 |
0.03 |
0.03 |
Restructuring, integration and business optimization expenses(g) |
0.3 |
0.1 |
0.2 |
— |
— |
|
5.2 |
0.9 |
4.3 |
0.03 |
0.03 |
Other(h) |
0.9 |
0.2 |
0.7 |
— |
— |
|
(1.4) |
(0.3) |
(1.1) |
(0.01) |
(0.01) |
Adjusted Net Income, including Impact of valuation allowance release |
30.5 |
(5.8) |
36.3 |
0.31 |
0.31 |
|
34.5 |
2.7 |
31.8 |
0.25 |
0.25 |
Impact of valuation allowance release(2) |
— |
10.2 |
(10.2) |
(0.09) |
(0.09) |
|
— |
— |
— |
— |
— |
Adjusted Net Income(1) |
$ 30.5 |
$ 4.4 |
$ 26.1 |
$ 0.22 |
$ 0.22 |
|
$ 34.5 |
$ 2.7 |
$ 31.8 |
$ 0.25 |
$ 0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
116,116,895 |
117,190,747 |
|
|
|
|
125,962,111 |
127,538,343 |
|
|
||||||||||
|
|
||||||||||
|
Years ended |
||||||||||
|
2023 |
|
2022 |
||||||||
|
Pre-tax |
Tax |
After- |
Per share, |
Per share, |
|
Pre-tax |
Tax |
After- |
Per share, |
Per share, |
|
(in millions, except share and per share amounts) |
||||||||||
Net income from continuing operations |
$ 82.0 |
$ 10.8 |
$ 71.2 |
$ 0.60 |
$ 0.60 |
|
$ 94.7 |
$ 24.9 |
$ 69.8 |
$ 0.52 |
$ 0.52 |
Amortization of investment in affiliate step-up(b) |
6.4 |
1.6 |
4.8 |
0.04 |
0.04 |
|
6.4 |
1.5 |
4.9 |
0.04 |
0.04 |
Net loss on asset disposals(c) |
4.1 |
1.0 |
3.1 |
0.03 |
0.03 |
|
3.6 |
0.9 |
2.7 |
0.02 |
0.02 |
Foreign currency exchange (gain) loss(d) |
(1.3) |
(0.3) |
(1.0) |
(0.01) |
(0.01) |
|
1.4 |
0.4 |
1.0 |
0.01 |
0.01 |
LIFO expense (benefit)(e) |
3.5 |
0.9 |
2.6 |
0.02 |
0.02 |
|
(0.2) |
(0.1) |
(0.1) |
— |
— |
Transaction and other related costs(f) |
3.0 |
0.8 |
2.2 |
0.02 |
0.02 |
|
7.0 |
1.1 |
5.9 |
0.04 |
0.04 |
Equity-based compensation |
16.0 |
1.5 |
14.5 |
0.12 |
0.12 |
|
20.6 |
(0.1) |
20.7 |
0.15 |
0.15 |
Restructuring, integration and business optimization expenses(g) |
2.7 |
0.7 |
2.0 |
0.02 |
0.02 |
|
11.6 |
2.8 |
8.8 |
0.07 |
0.07 |
Other(h) |
0.8 |
0.2 |
0.6 |
0.01 |
— |
|
(0.7) |
(0.2) |
(0.5) |
— |
(0.01) |
Adjusted Net Income, including Impact of valuation allowance release |
117.2 |
17.2 |
100.0 |
0.85 |
0.84 |
|
144.4 |
31.2 |
113.2 |
0.85 |
0.84 |
Impact of valuation allowance release(2) |
— |
10.2 |
(10.2) |
(0.09) |
(0.09) |
|
— |
— |
— |
— |
— |
Adjusted Net Income(1) |
$ 117.2 |
$ 27.4 |
$ 89.8 |
$ 0.76 |
$ 0.75 |
|
$ 144.4 |
$ 31.2 |
$ 113.2 |
$ 0.85 |
$ 0.84 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
118,367,214 |
119,487,709 |
|
|
|
|
133,601,322 |
135,088,172 |
|
|
See Appendix Table A-1 for Descriptions to Ecovyst Non-GAAP Reconciliations in the table above. |
|
|
|
(1) |
We define adjusted net income as net income attributable to |
|
|
(2) |
Represents the tax impact of the state tax credit valuation allowance release. Item is not expected to be recurring. |
The adjustments to net income attributable to Ecovyst Inc. are shown net of each applicable statutory tax rates of 25.4% and 23.9% for the year ended
Appendix Table A-3: Sales and Adjusted EBITDA by Business Segment |
||||||||||||
|
||||||||||||
|
|
Three months ended
|
|
|
|
Years ended
|
|
|
||||
|
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
|
|
|
||||||||||
Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 141.4 |
|
$ 159.8 |
|
(11.5) % |
|
$ 584.8 |
|
$ 702.5 |
|
(16.8) % |
Advanced Silicas |
|
31.4 |
|
23.0 |
|
36.5 % |
|
106.3 |
|
117.7 |
|
(9.7) % |
Total sales |
|
$ 172.8 |
|
$ 182.8 |
|
(5.5) % |
|
$ 691.1 |
|
$ 820.2 |
|
(15.7) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
Zeolyst Joint Venture sales |
|
$ 52.8 |
|
$ 39.9 |
|
32.3 % |
|
$ 156.5 |
|
$ 132.6 |
|
18.0 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 48.4 |
|
$ 54.4 |
|
(11.0) % |
|
$ 200.0 |
|
$ 227.8 |
|
(12.2) % |
Advanced Materials & Catalysts |
|
27.2 |
|
20.3 |
|
34.0 % |
|
81.9 |
|
78.0 |
|
5.0 % |
Unallocated corporate expenses |
|
(5.8) |
|
(5.5) |
|
5.5 % |
|
(22.0) |
|
(29.0) |
|
(24.1) % |
Total Adjusted EBITDA |
|
$ 69.8 |
|
$ 69.2 |
|
0.9 % |
|
$ 259.9 |
|
$ 276.8 |
|
(6.1) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34.2 % |
|
34.0 % |
|
|
|
34.2 % |
|
32.4 % |
|
|
Advanced Materials & Catalysts(1) |
|
32.3 % |
|
32.3 % |
|
|
|
31.2 % |
|
31.2 % |
|
|
Total Adjusted EBITDA Margin(1) |
|
30.9 % |
|
31.1 % |
|
|
|
30.7 % |
|
29.0 % |
|
|
|
|
(1) |
Adjusted EBITDA margin calculation includes proportionate 50% share of sales from the Zeolyst Joint Venture. |
Appendix Table A-4: Adjusted Free Cash Flow |
||||
|
||||
|
|
Years ended
|
||
|
|
2023 |
|
2022 |
|
|
(in millions) |
||
Net cash provided by operating activities, continuing operations |
|
$ 137.6 |
|
$ 180.3 |
Net cash (used in) provided by operating activities, discontinued operations |
|
— |
|
6.3 |
Net cash provided by operating activities |
|
137.6 |
|
186.6 |
|
|
|
|
|
Less: |
|
|
|
|
Purchases of property, plant and equipment(1) |
|
(65.3) |
|
(58.9) |
|
|
|
|
|
Free cash flow |
|
72.3 |
|
127.7 |
|
|
|
|
|
Adjustments to free cash flow: |
|
|
|
|
Cash paid for costs related to segment disposals |
|
— |
|
18.1 |
|
|
|
|
|
Adjusted free cash flow(2) |
|
$ 72.3 |
|
$ 145.8 |
|
|
|
|
|
Net cash provided by investing activities(3) |
|
$ (65.3) |
|
$ (63.0) |
Net cash used in financing activities |
|
$ (93.5) |
|
$ (148.1) |
|
|
(1) |
Excludes the Company's proportionate 50% share of capital expenditures from the Zeolyst Joint Venture. |
|
|
(2) |
We define Adjusted free cash flow as net cash provided by operating activities less purchases of property, plant and equipment, Adjusted for cash flows that are unusual in nature and/or infrequent in occurrence that neither relate to our core business nor reflect the liquidity of our underlying business. Historically these adjustments include proceeds from the sale of assets, net interest proceeds on swaps designated as net investment hedges, the cash paid for segment disposals and cash paid for debt financing costs included in cash from operating activities. Adjusted free cash flow is a non-GAAP financial measure that we believe will enhance a prospective investor's understanding of our ability to generate additional cash from operations and is an important financial measure for use in evaluating our financial performance. Our presentation of Adjusted free cash flow is not intended to replace, and should not be considered superior to, the presentation of our net cash provided by operating activities determined in accordance with GAAP. Additionally, our definition of Adjusted free cash flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view Adjusted free cash flow as a measure that provides supplemental information to our consolidated statements of cash flows. You should not consider Adjusted free cash flow in isolation or as an alternative to the presentation of our financial results in accordance with GAAP. The presentation of Adjusted free cash flow may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. |
|
|
(3) |
Net cash used in investing activities includes purchases of property, plant and equipment, which is also included in our computation of Adjusted free cash flow. |
Appendix Table A-5: Net Debt Leverage Ratio |
|||
|
|||
|
|
||
|
2023 |
|
2022 |
|
(in millions, except ratios) |
||
Total debt |
$ 877.5 |
|
$ 886.5 |
Less: |
|
|
|
Cash and cash equivalents |
88.4 |
|
110.9 |
Net debt |
$ 789.1 |
|
$ 775.6 |
|
|
|
|
Trailing twelve months(1): |
|
|
|
Net Income |
71.2 |
|
69.8 |
Adjusted EBITDA(2) |
259.9 |
|
276.8 |
|
|
|
|
Net Debt to Net Income Ratio |
11.1 x |
|
11.1 x |
Net Debt Leverage Ratio |
3.0 x |
|
2.8 x |
|
|
|
|
(1) |
Calculated on a continuing operations basis. |
|
|
(2) |
Refer to Appendix Table A-1: Reconciliation of Net Income to Adjusted EBITDA for the reconciliation to the most comparable GAAP financial measure. |
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