Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Ascent Industries Reports Third Quarter 2023 Results By: Ascent Industries Co. via Business Wire November 08, 2023 at 16:05 PM EST Ascent Industries Co. (Nasdaq: ACNT) (“Ascent” or the “Company”), an industrials company focused on the production and distribution of industrial tubular products and specialty chemicals, is reporting its results for the third quarter ended September 30, 2023. Third Quarter 2023 Summary – Continuing Operations1 (in millions, expect per share and margin) Q3 2023 Q3 2022 Change Net Sales $56.1 $78.2 -28.3% Gross Profit $6.0 $14.1 -57.3% Gross Profit Margin 10.7% 18.0% -730bps Net Income (Loss) $(12.8) $3.1 -511.2% Diluted Earnings (Loss) per Share $(1.26) $0.30 -520.0% Adjusted EBITDA $0.9 $8.2 -88.5% Adjusted EBITDA Margin 1.7% 10.5% -880bps __________________________ 1 On June 2, 2023, the Board of Directors of Ascent made the decision to permanently cease operations at the Company’s welded pipe and tube facility located in Munhall, PA (“Munhall”) effective on August 31, 2023. As a result, financial results from Munhall have been categorized into discontinued operations. Management Commentary “After a challenging first half of the year, we were pleased to begin seeing signs of improvement within our operations during the third quarter,” said Chris Hutter, president and CEO of Ascent. “Challenging macro-economic volatility continues to play a factor in overall end market demand, which impacted sales volumes in both our segments during the quarter. Despite this, our sales teams remained diligent in their efforts to uncover demand, and we believe we are building a healthier backlog across the board. We were also proud to appoint Bryan Kitchen as the new president of Ascent Chemicals. In the few weeks that Bryan has been onboard, he has already made significant contributions to our chemicals segment, and we look forward to the success we believe he will bring. “While there is still much work to be done to return to acceptable levels of profitability, we do believe that we have turned the corner operationally and are continuing to make progress stabilizing the business. We remain determined to hit our long-term strategic goals and believe the operational moves we made in 2023 were necessary to achieve those goals. Although broader economic uncertainty continues to hamper sales volumes in both our segments, we believe that we have the right leadership in place to capitalize on our market position heading into 2024.” Third Quarter 2023 Financial Results Net sales from continuing operations were $56.1 million compared to $78.2 million in the prior year period. The decrease is primarily due to continued lower overall sales volumes and lower average selling prices within both the tubular products and specialty chemicals segments. Gross profit from continuing operations was $6.0 million, or 10.7% of net sales, compared to $14.1 million, or 18.0% of net sales, in the third quarter of 2022. The decrease is primarily attributable to the decline in net sales in addition to lower product margin. Net loss from continuing operations was $12.8 million, or $(1.26) diluted loss per share, compared to net income from continuing operations of $3.1 million, or $0.30 diluted earnings per share, in the third quarter of 2022. The decrease is primarily attributable to the $11.4 million goodwill impairment within the specialty chemicals segment, along with the aforementioned decline in gross profit. Adjusted EBITDA was $0.9 million compared to $8.2 million in the third quarter of 2022. Adjusted EBITDA margin was 1.7% compared to 10.5% in the prior year period. The decrease is primarily attributable to the Company’s aforementioned decline in net sales. Segment Results Ascent Tubular – net sales from continuing operations in the third quarter of 2023 were $36.1 million compared to $50.6 million in the third quarter of 2022. Operating income from continuing operations in the third quarter was $1.7 million compared to operating income from continuing operations of $7.6 million in the prior year period. Adjusted EBITDA from continuing operations in the third quarter was $2.6 million compared to $8.9 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was 7.3% compared to 17.6% in the third quarter of 2022. Ascent Chemicals – net sales in the third quarter of 2023 were $20.1 million compared to $27.3 million in the third quarter of 2022. Operating loss in the third quarter was $(11.5) million compared to operating income of $1.1 million in the prior year period. Adjusted EBITDA in the third quarter was $1.0 million compared to $2.7 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was 5.2% compared to 10.0% in the third quarter of 2022. Liquidity As of September 30, 2023, total debt was $53.0 million under the Company’s revolving credit facility, compared to $71.5 million in debt at December 31, 2022. As of September 30, 2023, the Company had $41.8 million of remaining available borrowing capacity under its revolving credit facility, compared to $37.6 million at December 31, 2022. During the third quarter of 2023, the Company repurchased 44,799 shares at an average cost of $8.87 per share for approximately $0.4 million, bringing total year-to-date repurchases for 2023 to 95,955 shares. The Company currently has 584,024 shares remaining under its share repurchase authorization. Conference Call Ascent will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the third quarter ended September 30, 2023. Ascent management will host the conference call, followed by a question and answer period. Date: Wednesday, November 8, 2023 Time: 5:00 p.m. Eastern time Live Call Registration Link: Here Webcast Registration Link: Here Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860. The conference call will also be broadcast live and available for replay here. The webcast will be archived for one year in the investor relations section of the Company’s website at www.ascentco.com. About Ascent Industries Co. Ascent Industries Co. (Nasdaq: ACNT) is a company that engages in a number of diverse business activities including the production of stainless steel, the master distribution of seamless carbon pipe and tube, and the production of specialty chemicals. For more information about Ascent, please visit its web site at www.ascentco.com. Forward-Looking Statements This press release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable federal securities laws. All statements that are not historical facts are forward-looking statements. Forward looking statements can be identified through the use of words such as "estimate," "project," "intend," "expect," "believe," "should," "anticipate," "hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar expressions. The forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements and to review the risks as set forth in more detail in Ascent Industries Co.’s Securities and Exchange Commission filings, including our Annual Report on Form 10-K, which filings are available from the SEC or on our website. Ascent Industries Co. assumes no obligation to update any forward-looking information included in this release. Non-GAAP Financial Information Financial statement information included in this earnings release includes non-GAAP (Generally Accepted Accounting Principles) measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP measures to GAAP measures. Adjusted EBITDA is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results to determine the value of a company. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, shelf registration costs, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs from net income. Management believes that these non-GAAP measures are useful because they are key measures used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions as well as allow readers to compare the financial results between periods. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. Ascent Industries Co. Condensed Consolidated Balance Sheets (in thousands, except par value and share data) (Unaudited) September 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 730 $ 1,440 Accounts receivable, net of allowance for credit losses of $1,105 and $762, respectively 32,910 37,062 Inventories 83,044 85,572 Prepaid expenses and other current assets 8,775 7,802 Assets held for sale 8,956 380 Current assets of discontinued operations 620 38,120 Total current assets 135,035 170,376 Property, plant and equipment, net 31,981 37,045 Right-of-use assets, operating leases, net 28,170 29,198 Goodwill — 11,389 Intangible assets, net 8,872 10,001 Deferred income taxes 9,217 1,353 Deferred charges, net 128 203 Other non-current assets, net 1,782 1,861 Long-term assets of discontinued operations 6 7,617 Total assets $ 215,191 $ 269,043 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 25,758 $ 19,623 Accrued expenses and other current liabilities 5,608 6,039 Current portion of note payable 630 387 Current portion of long-term debt 2,464 2,464 Current portion of operating lease liabilities 1,132 1,029 Current portion of finance lease liabilities 296 280 Current liabilities of discontinued operations 970 3,656 Total current liabilities 36,858 33,478 Long-term debt 50,543 69,085 Long-term portion of operating lease liabilities 30,051 30,911 Long-term portion of finance lease liabilities 1,378 1,242 Other long-term liabilities 59 68 Total non-current liabilities 82,031 101,306 Total liabilities $ 118,889 $ 134,784 Commitments and contingencies Shareholders' equity: Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,120,281 shares issued and outstanding, respectively $ 11,085 $ 11,085 Capital in excess of par value 47,189 47,021 Retained earnings 47,379 85,146 105,653 143,252 Less: cost of common stock in treasury - 964,822 and 924,504 shares, respectively (9,351 ) (8,993 ) Total shareholders' equity 96,302 134,259 Total liabilities and shareholders' equity $ 215,191 $ 269,043 Note: The condensed consolidated balance sheets at December 31, 2022 have been derived from the audited consolidated financial statements at that date. Ascent Industries Co. Condensed Consolidated Statements of Income (Loss) - Comparative Analysis (Unaudited) ($ in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales Tubular Products $ 36,061 $ 50,606 $ 118,983 $ 162,059 Specialty Chemicals 20,052 27,328 65,164 84,070 All Other — 287 50 401 56,113 78,221 184,197 246,530 Operating income (loss) from continuing operations Tubular Products 1,705 7,640 3,264 34,761 Specialty Chemicals (11,481 ) 1,097 (10,935 ) 6,111 All Other (132 ) (13 ) (684 ) (330 ) Corporate Unallocated corporate expenses (2,859 ) (3,890 ) (9,314 ) (10,241 ) Acquisition costs and other — (149 ) (274 ) (837 ) Total Corporate (2,859 ) (4,039 ) (9,588 ) (11,078 ) Operating income (loss) (12,767 ) 4,685 (17,943 ) 29,464 Interest expense 1,063 827 3,217 1,637 Other, net (97 ) (118 ) (344 ) (176 ) Income (loss) from continuing operations before income taxes (13,733 ) 3,976 (20,816 ) 28,003 Income tax provision (benefit) (964 ) 871 (2,350 ) 4,069 Income (loss) from continuing operations (12,769 ) 3,105 (18,466 ) 23,934 Loss from discontinued operations, net of tax (5,163 ) (2,481 ) (19,301 ) (1,993 ) Net income (loss) $ (17,932 ) $ 624 $ (37,767 ) $ 21,941 Net income (loss) per common share from continuing operations Basic $ (1.26 ) $ 0.30 $ (1.82 ) $ 2.34 Diluted $ (1.26 ) $ 0.30 $ (1.82 ) $ 2.30 Net loss per common share from discontinued operations Basic $ (0.51 ) $ (0.24 ) $ (1.90 ) $ (0.19 ) Diluted $ (0.51 ) $ (0.24 ) $ (1.90 ) $ (0.19 ) Net income (loss) per common share Basic $ (1.77 ) $ 0.06 $ (3.72 ) $ 2.14 Diluted $ (1.77 ) $ 0.06 $ (3.72 ) $ 2.11 Average shares outstanding Basic 10,135 10,253 10,151 10,235 Diluted 10,135 10,465 10,151 10,407 Other data: Adjusted EBITDA1 $ 944 $ 8,214 $ 778 $ 38,894 1 The term Adjusted EBITDA is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results to determine the value of a company. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs from net income. For a reconciliation of this non-GAAP measure to the most comparable GAAP equivalent, refer to the Reconciliation of Net Income (Loss) to Adjusted EBITDA. Ascent Industries Co. Consolidated Statements of Cash Flows (Unaudited) ($ in thousands) Nine Months Ended September 30, 2023 2022 Operating activities Net income (loss) $ (37,767 ) $ 21,941 Loss from discontinued operations, net of tax (19,301 ) (1,993 ) Net income (loss) from continuing operations (18,466 ) 23,934 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation expense 4,833 4,950 Amortization expense 1,128 2,440 Amortization of debt issuance costs 75 75 Goodwill impairment 11,389 — Deferred income taxes (7,864 ) (1,227 ) Payments of earn-out liabilities in excess of acquisition date fair value — (372 ) Provision for losses on accounts receivable 2,199 608 Provision for losses on inventories 343 1,372 Loss on disposal of property, plant and equipment 182 31 Non-cash lease expense 205 322 Issuance of treasury stock for director fees — 364 Stock-based compensation expense 718 951 Changes in operating assets and liabilities: Accounts receivable 3,809 (6,210 ) Inventories 526 (30,252 ) Other assets and liabilities 323 (515 ) Accounts payable 5,934 10,154 Accrued expenses (430 ) (1,508 ) Accrued income taxes (772 ) 555 Net cash provided by operating activities - continuing operations 4,132 5,672 Net cash provided by (used in) operating activities - discontinued operations 17,395 (4,679 ) Net cash provided by operating activities 21,527 993 Investing activities Purchases of property, plant and equipment (2,660 ) (2,875 ) Proceeds from disposal of property, plant and equipment — 5 Net cash used in investing activities - continuing operations (2,660 ) (2,870 ) Net cash used in investing activities - discontinued operations (145 ) (592 ) Net cash used in investing activities (2,805 ) (3,462 ) Financing activities Borrowings from long-term debt 201,588 352,513 Proceeds from note payable 900 967 Proceeds from the exercise of stock options — 175 Payments on long-term debt (220,130 ) (350,311 ) Payments on note payable (657 ) (387 ) Principal payments on finance lease obligations (231 ) (193 ) Payments on earn-out liabilities — (484 ) Repurchase of common stock (903 ) (492 ) Net cash provided by (used in) financing activities - continuing operations (19,433 ) 1,788 Net cash used in financing activities - discontinued operations — (808 ) Net cash used in financing activities (19,433 ) 980 Decrease in cash and cash equivalents (711 ) (1,489 ) Less: Cash and cash equivalents of discontinued operations 1 4 Cash and cash equivalents, beginning of period 1,440 2,017 Cash and cash equivalents, end of period $ 730 $ 532 Ascent Industries Co. Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) ($ in thousands) Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2023 2022 2023 2022 Consolidated Net income (loss) from continuing operations $ (12,769 ) $ 3,105 $ (18,466 ) $ 23,934 Adjustments: Interest expense 1,063 827 3,217 1,637 Income taxes (964 ) 871 (2,350 ) 4,069 Depreciation 1,590 1,748 4,833 4,950 Amortization 376 1,098 1,129 2,440 EBITDA (10,704 ) 7,649 (11,637 ) 37,030 Acquisition costs and other 42 149 323 836 Goodwill impairment 11,389 — 11,389 — Gain on lease modification — — — (2 ) Stock-based compensation 142 307 389 697 Non-cash lease expense 69 109 205 323 Retention expense 6 — 6 — Restructuring and severance costs — — 103 10 Adjusted EBITDA $ 944 $ 8,214 $ 778 $ 38,894 % sales 1.7 % 10.5 % 0.4 % 15.8 % Tubular Products Net income from continuing operations $ 1,705 $ 7,640 $ 3,265 $ 34,760 Adjustments: Depreciation expense 626 637 1,916 2,000 Amortization expense 217 576 653 1,728 EBITDA 2,548 8,853 5,834 38,488 Acquisition costs and other 42 — 46 — Stock-based compensation 11 34 2 53 Non-cash lease expense 36 — 109 (1 ) Restructuring and severance costs — — 97 — Tubular Products Adjusted EBITDA $ 2,637 $ 8,887 $ 6,088 $ 38,540 % segment sales 7.3 % 17.6 % 5.1 % 23.8 % Specialty Chemicals Net income (loss) $ (11,498 ) $ 1,088 $ (10,974 ) $ 6,083 Adjustments: Interest expense 21 9 52 28 Depreciation expense 942 1,097 2,850 2,897 Amortization expense 159 520 475 712 EBITDA (10,376 ) 2,714 (7,597 ) 9,720 Acquisition costs and other — — 2 — Goodwill impairment 11,389 — 11,389 — Stock-based compensation 3 12 (13 ) 29 Non-cash lease expense 23 — 69 1 Specialty Chemicals Adjusted EBITDA $ 1,039 $ 2,726 $ 3,850 $ 9,750 % segment sales 5.2 % 10.0 % 5.9 % 11.6 % View source version on businesswire.com: https://www.businesswire.com/news/home/20231108315671/en/Contacts Company Contact Bill Steckel Chief Financial Officer 1-630-884-9181 Investor Relations Cody Slach and Cody Cree Gateway Group, Inc. 1-949-574-3860 ACNT@gateway-grp.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Ascent Industries Reports Third Quarter 2023 Results By: Ascent Industries Co. via Business Wire November 08, 2023 at 16:05 PM EST Ascent Industries Co. (Nasdaq: ACNT) (“Ascent” or the “Company”), an industrials company focused on the production and distribution of industrial tubular products and specialty chemicals, is reporting its results for the third quarter ended September 30, 2023. Third Quarter 2023 Summary – Continuing Operations1 (in millions, expect per share and margin) Q3 2023 Q3 2022 Change Net Sales $56.1 $78.2 -28.3% Gross Profit $6.0 $14.1 -57.3% Gross Profit Margin 10.7% 18.0% -730bps Net Income (Loss) $(12.8) $3.1 -511.2% Diluted Earnings (Loss) per Share $(1.26) $0.30 -520.0% Adjusted EBITDA $0.9 $8.2 -88.5% Adjusted EBITDA Margin 1.7% 10.5% -880bps __________________________ 1 On June 2, 2023, the Board of Directors of Ascent made the decision to permanently cease operations at the Company’s welded pipe and tube facility located in Munhall, PA (“Munhall”) effective on August 31, 2023. As a result, financial results from Munhall have been categorized into discontinued operations. Management Commentary “After a challenging first half of the year, we were pleased to begin seeing signs of improvement within our operations during the third quarter,” said Chris Hutter, president and CEO of Ascent. “Challenging macro-economic volatility continues to play a factor in overall end market demand, which impacted sales volumes in both our segments during the quarter. Despite this, our sales teams remained diligent in their efforts to uncover demand, and we believe we are building a healthier backlog across the board. We were also proud to appoint Bryan Kitchen as the new president of Ascent Chemicals. In the few weeks that Bryan has been onboard, he has already made significant contributions to our chemicals segment, and we look forward to the success we believe he will bring. “While there is still much work to be done to return to acceptable levels of profitability, we do believe that we have turned the corner operationally and are continuing to make progress stabilizing the business. We remain determined to hit our long-term strategic goals and believe the operational moves we made in 2023 were necessary to achieve those goals. Although broader economic uncertainty continues to hamper sales volumes in both our segments, we believe that we have the right leadership in place to capitalize on our market position heading into 2024.” Third Quarter 2023 Financial Results Net sales from continuing operations were $56.1 million compared to $78.2 million in the prior year period. The decrease is primarily due to continued lower overall sales volumes and lower average selling prices within both the tubular products and specialty chemicals segments. Gross profit from continuing operations was $6.0 million, or 10.7% of net sales, compared to $14.1 million, or 18.0% of net sales, in the third quarter of 2022. The decrease is primarily attributable to the decline in net sales in addition to lower product margin. Net loss from continuing operations was $12.8 million, or $(1.26) diluted loss per share, compared to net income from continuing operations of $3.1 million, or $0.30 diluted earnings per share, in the third quarter of 2022. The decrease is primarily attributable to the $11.4 million goodwill impairment within the specialty chemicals segment, along with the aforementioned decline in gross profit. Adjusted EBITDA was $0.9 million compared to $8.2 million in the third quarter of 2022. Adjusted EBITDA margin was 1.7% compared to 10.5% in the prior year period. The decrease is primarily attributable to the Company’s aforementioned decline in net sales. Segment Results Ascent Tubular – net sales from continuing operations in the third quarter of 2023 were $36.1 million compared to $50.6 million in the third quarter of 2022. Operating income from continuing operations in the third quarter was $1.7 million compared to operating income from continuing operations of $7.6 million in the prior year period. Adjusted EBITDA from continuing operations in the third quarter was $2.6 million compared to $8.9 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was 7.3% compared to 17.6% in the third quarter of 2022. Ascent Chemicals – net sales in the third quarter of 2023 were $20.1 million compared to $27.3 million in the third quarter of 2022. Operating loss in the third quarter was $(11.5) million compared to operating income of $1.1 million in the prior year period. Adjusted EBITDA in the third quarter was $1.0 million compared to $2.7 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was 5.2% compared to 10.0% in the third quarter of 2022. Liquidity As of September 30, 2023, total debt was $53.0 million under the Company’s revolving credit facility, compared to $71.5 million in debt at December 31, 2022. As of September 30, 2023, the Company had $41.8 million of remaining available borrowing capacity under its revolving credit facility, compared to $37.6 million at December 31, 2022. During the third quarter of 2023, the Company repurchased 44,799 shares at an average cost of $8.87 per share for approximately $0.4 million, bringing total year-to-date repurchases for 2023 to 95,955 shares. The Company currently has 584,024 shares remaining under its share repurchase authorization. Conference Call Ascent will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the third quarter ended September 30, 2023. Ascent management will host the conference call, followed by a question and answer period. Date: Wednesday, November 8, 2023 Time: 5:00 p.m. Eastern time Live Call Registration Link: Here Webcast Registration Link: Here Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860. The conference call will also be broadcast live and available for replay here. The webcast will be archived for one year in the investor relations section of the Company’s website at www.ascentco.com. About Ascent Industries Co. Ascent Industries Co. (Nasdaq: ACNT) is a company that engages in a number of diverse business activities including the production of stainless steel, the master distribution of seamless carbon pipe and tube, and the production of specialty chemicals. For more information about Ascent, please visit its web site at www.ascentco.com. Forward-Looking Statements This press release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable federal securities laws. All statements that are not historical facts are forward-looking statements. Forward looking statements can be identified through the use of words such as "estimate," "project," "intend," "expect," "believe," "should," "anticipate," "hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar expressions. The forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements and to review the risks as set forth in more detail in Ascent Industries Co.’s Securities and Exchange Commission filings, including our Annual Report on Form 10-K, which filings are available from the SEC or on our website. Ascent Industries Co. assumes no obligation to update any forward-looking information included in this release. Non-GAAP Financial Information Financial statement information included in this earnings release includes non-GAAP (Generally Accepted Accounting Principles) measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP measures to GAAP measures. Adjusted EBITDA is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results to determine the value of a company. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, shelf registration costs, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs from net income. Management believes that these non-GAAP measures are useful because they are key measures used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions as well as allow readers to compare the financial results between periods. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. Ascent Industries Co. Condensed Consolidated Balance Sheets (in thousands, except par value and share data) (Unaudited) September 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 730 $ 1,440 Accounts receivable, net of allowance for credit losses of $1,105 and $762, respectively 32,910 37,062 Inventories 83,044 85,572 Prepaid expenses and other current assets 8,775 7,802 Assets held for sale 8,956 380 Current assets of discontinued operations 620 38,120 Total current assets 135,035 170,376 Property, plant and equipment, net 31,981 37,045 Right-of-use assets, operating leases, net 28,170 29,198 Goodwill — 11,389 Intangible assets, net 8,872 10,001 Deferred income taxes 9,217 1,353 Deferred charges, net 128 203 Other non-current assets, net 1,782 1,861 Long-term assets of discontinued operations 6 7,617 Total assets $ 215,191 $ 269,043 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 25,758 $ 19,623 Accrued expenses and other current liabilities 5,608 6,039 Current portion of note payable 630 387 Current portion of long-term debt 2,464 2,464 Current portion of operating lease liabilities 1,132 1,029 Current portion of finance lease liabilities 296 280 Current liabilities of discontinued operations 970 3,656 Total current liabilities 36,858 33,478 Long-term debt 50,543 69,085 Long-term portion of operating lease liabilities 30,051 30,911 Long-term portion of finance lease liabilities 1,378 1,242 Other long-term liabilities 59 68 Total non-current liabilities 82,031 101,306 Total liabilities $ 118,889 $ 134,784 Commitments and contingencies Shareholders' equity: Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,120,281 shares issued and outstanding, respectively $ 11,085 $ 11,085 Capital in excess of par value 47,189 47,021 Retained earnings 47,379 85,146 105,653 143,252 Less: cost of common stock in treasury - 964,822 and 924,504 shares, respectively (9,351 ) (8,993 ) Total shareholders' equity 96,302 134,259 Total liabilities and shareholders' equity $ 215,191 $ 269,043 Note: The condensed consolidated balance sheets at December 31, 2022 have been derived from the audited consolidated financial statements at that date. Ascent Industries Co. Condensed Consolidated Statements of Income (Loss) - Comparative Analysis (Unaudited) ($ in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales Tubular Products $ 36,061 $ 50,606 $ 118,983 $ 162,059 Specialty Chemicals 20,052 27,328 65,164 84,070 All Other — 287 50 401 56,113 78,221 184,197 246,530 Operating income (loss) from continuing operations Tubular Products 1,705 7,640 3,264 34,761 Specialty Chemicals (11,481 ) 1,097 (10,935 ) 6,111 All Other (132 ) (13 ) (684 ) (330 ) Corporate Unallocated corporate expenses (2,859 ) (3,890 ) (9,314 ) (10,241 ) Acquisition costs and other — (149 ) (274 ) (837 ) Total Corporate (2,859 ) (4,039 ) (9,588 ) (11,078 ) Operating income (loss) (12,767 ) 4,685 (17,943 ) 29,464 Interest expense 1,063 827 3,217 1,637 Other, net (97 ) (118 ) (344 ) (176 ) Income (loss) from continuing operations before income taxes (13,733 ) 3,976 (20,816 ) 28,003 Income tax provision (benefit) (964 ) 871 (2,350 ) 4,069 Income (loss) from continuing operations (12,769 ) 3,105 (18,466 ) 23,934 Loss from discontinued operations, net of tax (5,163 ) (2,481 ) (19,301 ) (1,993 ) Net income (loss) $ (17,932 ) $ 624 $ (37,767 ) $ 21,941 Net income (loss) per common share from continuing operations Basic $ (1.26 ) $ 0.30 $ (1.82 ) $ 2.34 Diluted $ (1.26 ) $ 0.30 $ (1.82 ) $ 2.30 Net loss per common share from discontinued operations Basic $ (0.51 ) $ (0.24 ) $ (1.90 ) $ (0.19 ) Diluted $ (0.51 ) $ (0.24 ) $ (1.90 ) $ (0.19 ) Net income (loss) per common share Basic $ (1.77 ) $ 0.06 $ (3.72 ) $ 2.14 Diluted $ (1.77 ) $ 0.06 $ (3.72 ) $ 2.11 Average shares outstanding Basic 10,135 10,253 10,151 10,235 Diluted 10,135 10,465 10,151 10,407 Other data: Adjusted EBITDA1 $ 944 $ 8,214 $ 778 $ 38,894 1 The term Adjusted EBITDA is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results to determine the value of a company. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs from net income. For a reconciliation of this non-GAAP measure to the most comparable GAAP equivalent, refer to the Reconciliation of Net Income (Loss) to Adjusted EBITDA. Ascent Industries Co. Consolidated Statements of Cash Flows (Unaudited) ($ in thousands) Nine Months Ended September 30, 2023 2022 Operating activities Net income (loss) $ (37,767 ) $ 21,941 Loss from discontinued operations, net of tax (19,301 ) (1,993 ) Net income (loss) from continuing operations (18,466 ) 23,934 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation expense 4,833 4,950 Amortization expense 1,128 2,440 Amortization of debt issuance costs 75 75 Goodwill impairment 11,389 — Deferred income taxes (7,864 ) (1,227 ) Payments of earn-out liabilities in excess of acquisition date fair value — (372 ) Provision for losses on accounts receivable 2,199 608 Provision for losses on inventories 343 1,372 Loss on disposal of property, plant and equipment 182 31 Non-cash lease expense 205 322 Issuance of treasury stock for director fees — 364 Stock-based compensation expense 718 951 Changes in operating assets and liabilities: Accounts receivable 3,809 (6,210 ) Inventories 526 (30,252 ) Other assets and liabilities 323 (515 ) Accounts payable 5,934 10,154 Accrued expenses (430 ) (1,508 ) Accrued income taxes (772 ) 555 Net cash provided by operating activities - continuing operations 4,132 5,672 Net cash provided by (used in) operating activities - discontinued operations 17,395 (4,679 ) Net cash provided by operating activities 21,527 993 Investing activities Purchases of property, plant and equipment (2,660 ) (2,875 ) Proceeds from disposal of property, plant and equipment — 5 Net cash used in investing activities - continuing operations (2,660 ) (2,870 ) Net cash used in investing activities - discontinued operations (145 ) (592 ) Net cash used in investing activities (2,805 ) (3,462 ) Financing activities Borrowings from long-term debt 201,588 352,513 Proceeds from note payable 900 967 Proceeds from the exercise of stock options — 175 Payments on long-term debt (220,130 ) (350,311 ) Payments on note payable (657 ) (387 ) Principal payments on finance lease obligations (231 ) (193 ) Payments on earn-out liabilities — (484 ) Repurchase of common stock (903 ) (492 ) Net cash provided by (used in) financing activities - continuing operations (19,433 ) 1,788 Net cash used in financing activities - discontinued operations — (808 ) Net cash used in financing activities (19,433 ) 980 Decrease in cash and cash equivalents (711 ) (1,489 ) Less: Cash and cash equivalents of discontinued operations 1 4 Cash and cash equivalents, beginning of period 1,440 2,017 Cash and cash equivalents, end of period $ 730 $ 532 Ascent Industries Co. Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) ($ in thousands) Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2023 2022 2023 2022 Consolidated Net income (loss) from continuing operations $ (12,769 ) $ 3,105 $ (18,466 ) $ 23,934 Adjustments: Interest expense 1,063 827 3,217 1,637 Income taxes (964 ) 871 (2,350 ) 4,069 Depreciation 1,590 1,748 4,833 4,950 Amortization 376 1,098 1,129 2,440 EBITDA (10,704 ) 7,649 (11,637 ) 37,030 Acquisition costs and other 42 149 323 836 Goodwill impairment 11,389 — 11,389 — Gain on lease modification — — — (2 ) Stock-based compensation 142 307 389 697 Non-cash lease expense 69 109 205 323 Retention expense 6 — 6 — Restructuring and severance costs — — 103 10 Adjusted EBITDA $ 944 $ 8,214 $ 778 $ 38,894 % sales 1.7 % 10.5 % 0.4 % 15.8 % Tubular Products Net income from continuing operations $ 1,705 $ 7,640 $ 3,265 $ 34,760 Adjustments: Depreciation expense 626 637 1,916 2,000 Amortization expense 217 576 653 1,728 EBITDA 2,548 8,853 5,834 38,488 Acquisition costs and other 42 — 46 — Stock-based compensation 11 34 2 53 Non-cash lease expense 36 — 109 (1 ) Restructuring and severance costs — — 97 — Tubular Products Adjusted EBITDA $ 2,637 $ 8,887 $ 6,088 $ 38,540 % segment sales 7.3 % 17.6 % 5.1 % 23.8 % Specialty Chemicals Net income (loss) $ (11,498 ) $ 1,088 $ (10,974 ) $ 6,083 Adjustments: Interest expense 21 9 52 28 Depreciation expense 942 1,097 2,850 2,897 Amortization expense 159 520 475 712 EBITDA (10,376 ) 2,714 (7,597 ) 9,720 Acquisition costs and other — — 2 — Goodwill impairment 11,389 — 11,389 — Stock-based compensation 3 12 (13 ) 29 Non-cash lease expense 23 — 69 1 Specialty Chemicals Adjusted EBITDA $ 1,039 $ 2,726 $ 3,850 $ 9,750 % segment sales 5.2 % 10.0 % 5.9 % 11.6 % View source version on businesswire.com: https://www.businesswire.com/news/home/20231108315671/en/Contacts Company Contact Bill Steckel Chief Financial Officer 1-630-884-9181 Investor Relations Cody Slach and Cody Cree Gateway Group, Inc. 1-949-574-3860 ACNT@gateway-grp.com
Ascent Industries Co. (Nasdaq: ACNT) (“Ascent” or the “Company”), an industrials company focused on the production and distribution of industrial tubular products and specialty chemicals, is reporting its results for the third quarter ended September 30, 2023. Third Quarter 2023 Summary – Continuing Operations1 (in millions, expect per share and margin) Q3 2023 Q3 2022 Change Net Sales $56.1 $78.2 -28.3% Gross Profit $6.0 $14.1 -57.3% Gross Profit Margin 10.7% 18.0% -730bps Net Income (Loss) $(12.8) $3.1 -511.2% Diluted Earnings (Loss) per Share $(1.26) $0.30 -520.0% Adjusted EBITDA $0.9 $8.2 -88.5% Adjusted EBITDA Margin 1.7% 10.5% -880bps __________________________ 1 On June 2, 2023, the Board of Directors of Ascent made the decision to permanently cease operations at the Company’s welded pipe and tube facility located in Munhall, PA (“Munhall”) effective on August 31, 2023. As a result, financial results from Munhall have been categorized into discontinued operations. Management Commentary “After a challenging first half of the year, we were pleased to begin seeing signs of improvement within our operations during the third quarter,” said Chris Hutter, president and CEO of Ascent. “Challenging macro-economic volatility continues to play a factor in overall end market demand, which impacted sales volumes in both our segments during the quarter. Despite this, our sales teams remained diligent in their efforts to uncover demand, and we believe we are building a healthier backlog across the board. We were also proud to appoint Bryan Kitchen as the new president of Ascent Chemicals. In the few weeks that Bryan has been onboard, he has already made significant contributions to our chemicals segment, and we look forward to the success we believe he will bring. “While there is still much work to be done to return to acceptable levels of profitability, we do believe that we have turned the corner operationally and are continuing to make progress stabilizing the business. We remain determined to hit our long-term strategic goals and believe the operational moves we made in 2023 were necessary to achieve those goals. Although broader economic uncertainty continues to hamper sales volumes in both our segments, we believe that we have the right leadership in place to capitalize on our market position heading into 2024.” Third Quarter 2023 Financial Results Net sales from continuing operations were $56.1 million compared to $78.2 million in the prior year period. The decrease is primarily due to continued lower overall sales volumes and lower average selling prices within both the tubular products and specialty chemicals segments. Gross profit from continuing operations was $6.0 million, or 10.7% of net sales, compared to $14.1 million, or 18.0% of net sales, in the third quarter of 2022. The decrease is primarily attributable to the decline in net sales in addition to lower product margin. Net loss from continuing operations was $12.8 million, or $(1.26) diluted loss per share, compared to net income from continuing operations of $3.1 million, or $0.30 diluted earnings per share, in the third quarter of 2022. The decrease is primarily attributable to the $11.4 million goodwill impairment within the specialty chemicals segment, along with the aforementioned decline in gross profit. Adjusted EBITDA was $0.9 million compared to $8.2 million in the third quarter of 2022. Adjusted EBITDA margin was 1.7% compared to 10.5% in the prior year period. The decrease is primarily attributable to the Company’s aforementioned decline in net sales. Segment Results Ascent Tubular – net sales from continuing operations in the third quarter of 2023 were $36.1 million compared to $50.6 million in the third quarter of 2022. Operating income from continuing operations in the third quarter was $1.7 million compared to operating income from continuing operations of $7.6 million in the prior year period. Adjusted EBITDA from continuing operations in the third quarter was $2.6 million compared to $8.9 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was 7.3% compared to 17.6% in the third quarter of 2022. Ascent Chemicals – net sales in the third quarter of 2023 were $20.1 million compared to $27.3 million in the third quarter of 2022. Operating loss in the third quarter was $(11.5) million compared to operating income of $1.1 million in the prior year period. Adjusted EBITDA in the third quarter was $1.0 million compared to $2.7 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was 5.2% compared to 10.0% in the third quarter of 2022. Liquidity As of September 30, 2023, total debt was $53.0 million under the Company’s revolving credit facility, compared to $71.5 million in debt at December 31, 2022. As of September 30, 2023, the Company had $41.8 million of remaining available borrowing capacity under its revolving credit facility, compared to $37.6 million at December 31, 2022. During the third quarter of 2023, the Company repurchased 44,799 shares at an average cost of $8.87 per share for approximately $0.4 million, bringing total year-to-date repurchases for 2023 to 95,955 shares. The Company currently has 584,024 shares remaining under its share repurchase authorization. Conference Call Ascent will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the third quarter ended September 30, 2023. Ascent management will host the conference call, followed by a question and answer period. Date: Wednesday, November 8, 2023 Time: 5:00 p.m. Eastern time Live Call Registration Link: Here Webcast Registration Link: Here Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860. The conference call will also be broadcast live and available for replay here. The webcast will be archived for one year in the investor relations section of the Company’s website at www.ascentco.com. About Ascent Industries Co. Ascent Industries Co. (Nasdaq: ACNT) is a company that engages in a number of diverse business activities including the production of stainless steel, the master distribution of seamless carbon pipe and tube, and the production of specialty chemicals. For more information about Ascent, please visit its web site at www.ascentco.com. Forward-Looking Statements This press release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable federal securities laws. All statements that are not historical facts are forward-looking statements. Forward looking statements can be identified through the use of words such as "estimate," "project," "intend," "expect," "believe," "should," "anticipate," "hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar expressions. The forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements and to review the risks as set forth in more detail in Ascent Industries Co.’s Securities and Exchange Commission filings, including our Annual Report on Form 10-K, which filings are available from the SEC or on our website. Ascent Industries Co. assumes no obligation to update any forward-looking information included in this release. Non-GAAP Financial Information Financial statement information included in this earnings release includes non-GAAP (Generally Accepted Accounting Principles) measures and should be read along with the accompanying tables which provide a reconciliation of non-GAAP measures to GAAP measures. Adjusted EBITDA is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results to determine the value of a company. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, shelf registration costs, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs from net income. Management believes that these non-GAAP measures are useful because they are key measures used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions as well as allow readers to compare the financial results between periods. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. Ascent Industries Co. Condensed Consolidated Balance Sheets (in thousands, except par value and share data) (Unaudited) September 30, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 730 $ 1,440 Accounts receivable, net of allowance for credit losses of $1,105 and $762, respectively 32,910 37,062 Inventories 83,044 85,572 Prepaid expenses and other current assets 8,775 7,802 Assets held for sale 8,956 380 Current assets of discontinued operations 620 38,120 Total current assets 135,035 170,376 Property, plant and equipment, net 31,981 37,045 Right-of-use assets, operating leases, net 28,170 29,198 Goodwill — 11,389 Intangible assets, net 8,872 10,001 Deferred income taxes 9,217 1,353 Deferred charges, net 128 203 Other non-current assets, net 1,782 1,861 Long-term assets of discontinued operations 6 7,617 Total assets $ 215,191 $ 269,043 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 25,758 $ 19,623 Accrued expenses and other current liabilities 5,608 6,039 Current portion of note payable 630 387 Current portion of long-term debt 2,464 2,464 Current portion of operating lease liabilities 1,132 1,029 Current portion of finance lease liabilities 296 280 Current liabilities of discontinued operations 970 3,656 Total current liabilities 36,858 33,478 Long-term debt 50,543 69,085 Long-term portion of operating lease liabilities 30,051 30,911 Long-term portion of finance lease liabilities 1,378 1,242 Other long-term liabilities 59 68 Total non-current liabilities 82,031 101,306 Total liabilities $ 118,889 $ 134,784 Commitments and contingencies Shareholders' equity: Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,120,281 shares issued and outstanding, respectively $ 11,085 $ 11,085 Capital in excess of par value 47,189 47,021 Retained earnings 47,379 85,146 105,653 143,252 Less: cost of common stock in treasury - 964,822 and 924,504 shares, respectively (9,351 ) (8,993 ) Total shareholders' equity 96,302 134,259 Total liabilities and shareholders' equity $ 215,191 $ 269,043 Note: The condensed consolidated balance sheets at December 31, 2022 have been derived from the audited consolidated financial statements at that date. Ascent Industries Co. Condensed Consolidated Statements of Income (Loss) - Comparative Analysis (Unaudited) ($ in thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net sales Tubular Products $ 36,061 $ 50,606 $ 118,983 $ 162,059 Specialty Chemicals 20,052 27,328 65,164 84,070 All Other — 287 50 401 56,113 78,221 184,197 246,530 Operating income (loss) from continuing operations Tubular Products 1,705 7,640 3,264 34,761 Specialty Chemicals (11,481 ) 1,097 (10,935 ) 6,111 All Other (132 ) (13 ) (684 ) (330 ) Corporate Unallocated corporate expenses (2,859 ) (3,890 ) (9,314 ) (10,241 ) Acquisition costs and other — (149 ) (274 ) (837 ) Total Corporate (2,859 ) (4,039 ) (9,588 ) (11,078 ) Operating income (loss) (12,767 ) 4,685 (17,943 ) 29,464 Interest expense 1,063 827 3,217 1,637 Other, net (97 ) (118 ) (344 ) (176 ) Income (loss) from continuing operations before income taxes (13,733 ) 3,976 (20,816 ) 28,003 Income tax provision (benefit) (964 ) 871 (2,350 ) 4,069 Income (loss) from continuing operations (12,769 ) 3,105 (18,466 ) 23,934 Loss from discontinued operations, net of tax (5,163 ) (2,481 ) (19,301 ) (1,993 ) Net income (loss) $ (17,932 ) $ 624 $ (37,767 ) $ 21,941 Net income (loss) per common share from continuing operations Basic $ (1.26 ) $ 0.30 $ (1.82 ) $ 2.34 Diluted $ (1.26 ) $ 0.30 $ (1.82 ) $ 2.30 Net loss per common share from discontinued operations Basic $ (0.51 ) $ (0.24 ) $ (1.90 ) $ (0.19 ) Diluted $ (0.51 ) $ (0.24 ) $ (1.90 ) $ (0.19 ) Net income (loss) per common share Basic $ (1.77 ) $ 0.06 $ (3.72 ) $ 2.14 Diluted $ (1.77 ) $ 0.06 $ (3.72 ) $ 2.11 Average shares outstanding Basic 10,135 10,253 10,151 10,235 Diluted 10,135 10,465 10,151 10,407 Other data: Adjusted EBITDA1 $ 944 $ 8,214 $ 778 $ 38,894 1 The term Adjusted EBITDA is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results to determine the value of a company. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs from net income. For a reconciliation of this non-GAAP measure to the most comparable GAAP equivalent, refer to the Reconciliation of Net Income (Loss) to Adjusted EBITDA. Ascent Industries Co. Consolidated Statements of Cash Flows (Unaudited) ($ in thousands) Nine Months Ended September 30, 2023 2022 Operating activities Net income (loss) $ (37,767 ) $ 21,941 Loss from discontinued operations, net of tax (19,301 ) (1,993 ) Net income (loss) from continuing operations (18,466 ) 23,934 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation expense 4,833 4,950 Amortization expense 1,128 2,440 Amortization of debt issuance costs 75 75 Goodwill impairment 11,389 — Deferred income taxes (7,864 ) (1,227 ) Payments of earn-out liabilities in excess of acquisition date fair value — (372 ) Provision for losses on accounts receivable 2,199 608 Provision for losses on inventories 343 1,372 Loss on disposal of property, plant and equipment 182 31 Non-cash lease expense 205 322 Issuance of treasury stock for director fees — 364 Stock-based compensation expense 718 951 Changes in operating assets and liabilities: Accounts receivable 3,809 (6,210 ) Inventories 526 (30,252 ) Other assets and liabilities 323 (515 ) Accounts payable 5,934 10,154 Accrued expenses (430 ) (1,508 ) Accrued income taxes (772 ) 555 Net cash provided by operating activities - continuing operations 4,132 5,672 Net cash provided by (used in) operating activities - discontinued operations 17,395 (4,679 ) Net cash provided by operating activities 21,527 993 Investing activities Purchases of property, plant and equipment (2,660 ) (2,875 ) Proceeds from disposal of property, plant and equipment — 5 Net cash used in investing activities - continuing operations (2,660 ) (2,870 ) Net cash used in investing activities - discontinued operations (145 ) (592 ) Net cash used in investing activities (2,805 ) (3,462 ) Financing activities Borrowings from long-term debt 201,588 352,513 Proceeds from note payable 900 967 Proceeds from the exercise of stock options — 175 Payments on long-term debt (220,130 ) (350,311 ) Payments on note payable (657 ) (387 ) Principal payments on finance lease obligations (231 ) (193 ) Payments on earn-out liabilities — (484 ) Repurchase of common stock (903 ) (492 ) Net cash provided by (used in) financing activities - continuing operations (19,433 ) 1,788 Net cash used in financing activities - discontinued operations — (808 ) Net cash used in financing activities (19,433 ) 980 Decrease in cash and cash equivalents (711 ) (1,489 ) Less: Cash and cash equivalents of discontinued operations 1 4 Cash and cash equivalents, beginning of period 1,440 2,017 Cash and cash equivalents, end of period $ 730 $ 532 Ascent Industries Co. Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) ($ in thousands) Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands) 2023 2022 2023 2022 Consolidated Net income (loss) from continuing operations $ (12,769 ) $ 3,105 $ (18,466 ) $ 23,934 Adjustments: Interest expense 1,063 827 3,217 1,637 Income taxes (964 ) 871 (2,350 ) 4,069 Depreciation 1,590 1,748 4,833 4,950 Amortization 376 1,098 1,129 2,440 EBITDA (10,704 ) 7,649 (11,637 ) 37,030 Acquisition costs and other 42 149 323 836 Goodwill impairment 11,389 — 11,389 — Gain on lease modification — — — (2 ) Stock-based compensation 142 307 389 697 Non-cash lease expense 69 109 205 323 Retention expense 6 — 6 — Restructuring and severance costs — — 103 10 Adjusted EBITDA $ 944 $ 8,214 $ 778 $ 38,894 % sales 1.7 % 10.5 % 0.4 % 15.8 % Tubular Products Net income from continuing operations $ 1,705 $ 7,640 $ 3,265 $ 34,760 Adjustments: Depreciation expense 626 637 1,916 2,000 Amortization expense 217 576 653 1,728 EBITDA 2,548 8,853 5,834 38,488 Acquisition costs and other 42 — 46 — Stock-based compensation 11 34 2 53 Non-cash lease expense 36 — 109 (1 ) Restructuring and severance costs — — 97 — Tubular Products Adjusted EBITDA $ 2,637 $ 8,887 $ 6,088 $ 38,540 % segment sales 7.3 % 17.6 % 5.1 % 23.8 % Specialty Chemicals Net income (loss) $ (11,498 ) $ 1,088 $ (10,974 ) $ 6,083 Adjustments: Interest expense 21 9 52 28 Depreciation expense 942 1,097 2,850 2,897 Amortization expense 159 520 475 712 EBITDA (10,376 ) 2,714 (7,597 ) 9,720 Acquisition costs and other — — 2 — Goodwill impairment 11,389 — 11,389 — Stock-based compensation 3 12 (13 ) 29 Non-cash lease expense 23 — 69 1 Specialty Chemicals Adjusted EBITDA $ 1,039 $ 2,726 $ 3,850 $ 9,750 % segment sales 5.2 % 10.0 % 5.9 % 11.6 % View source version on businesswire.com: https://www.businesswire.com/news/home/20231108315671/en/
Company Contact Bill Steckel Chief Financial Officer 1-630-884-9181 Investor Relations Cody Slach and Cody Cree Gateway Group, Inc. 1-949-574-3860 ACNT@gateway-grp.com