Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Ascent Industries Reports Fourth Quarter and Full Year 2023 Results By: Ascent Industries Co. via Business Wire March 28, 2024 at 16:05 PM EDT Eliminated All Outstanding Debt with Cash Proceeds from the Sale of Specialty Pipe & Tube New Leadership Focused on Accelerating Profitable Growth and Maximizing Value Ascent Industries Co. (Nasdaq: ACNT) (“Ascent” or the “Company”), an industrials company focused on the production of specialty chemicals and industrial tubular products, is reporting its results for the fourth quarter and full year ended December 31, 2023. Fourth Quarter 2023 Summary1 (in millions, except per share and margin) Q4 2023 Q4 2022 Change Net Sales $41.2 $54.2 (23.9)% Gross Profit $(2.1) $4.9 (143.9)% Gross Profit Margin (5.2)% 9.0% (1,420)bps Net (Loss) Income $(7.5) $4.5 (267.4)% Diluted (Loss) Earnings per Share $(0.73) $0.43 (269.8)% Adjusted EBITDA $(5.9) $1.7 (460.5)% Adjusted EBITDA Margin (14.4)% 3.0% (1,740)bps Full Year 2023 Summary1 (in millions, except per share and margin) 2023 2022 Change Net Sales $193.2 $262.0 (26.3)% Gross Profit $1.5 $43.3 (96.5)% Gross Profit Margin 0.8% 16.5% (1,570)bps Net (Loss) Income $(34.2) $17.6 (294.3)% Diluted (Loss) Earnings per share $(3.37) $1.69 (299.4)% Adjusted EBITDA $(15.9) $25.6 (162.3)% Adjusted EBITDA Margin (8.2)% 9.8% (1,800)bps ____________________________ 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. On December 22, 2023, the Company closed on a transaction to sell substantially all of the assets of Specialty Pipe & Tube (“SPT”). As a result, financial results from Munhall & SPT have been categorized into discontinued operations. Management Commentary “The Ascent team made notable progress towards our long-term strategic goals in 2023, despite continued market headwinds,” said Ascent CEO Bryan Kitchen. “This progress was driven by meaningful initiatives to onboard new customers and unlock operational efficiencies that we expect to bear fruit next year. However, our momentum in the fourth quarter was not sufficient to fully mitigate the adverse effects of industry-wide destocking trends that impacted both business segments. Prior to year-end, Ascent closed on a sale of substantially all of the assets of Specialty Pipe and Tube, generating $55 million in an all-cash transaction. These proceeds were utilized to clear remaining debt, positioning the Company favorably as it entered 2024. “We moved into 2024 with a healthy financial position and a commitment to driving sustainable earnings-growth across the enterprise. This commitment is underscored by purposeful initiatives to recapitalize talent and capabilities, aimed to maximize the value derived from the unique strengths within our tubular segment while simultaneously investing in the growth potential of the specialty chemicals segment. We believe our newly-assembled management team has already begun to make progress towards our long-term goals focused on creating durable shareholder value.” Fourth Quarter 2023 Financial Results Net sales from continuing operations were $41.2 million compared to $54.2 million in the prior year period, primarily attributable to decreased end-market demand and de-stocking trends across both segments. Gross profit from continuing operations was $(2.1) million, or (5.2%) of net sales, compared to $4.9 million, or 9.0% of net sales, in the fourth quarter of 2022. The decrease was primarily attributable to elevated costs and unfavorable product mix. Net loss from continuing operations was $7.5 million, or $(0.73) diluted loss per share, compared to net income from continuing operations of $4.5 million, or $0.43 diluted earnings per share, in the fourth quarter of 2022. The decrease was primarily attributable to the aforementioned lower net sales, along with an increase in administrative expenses. Adjusted EBITDA was $(5.9) million compared to $1.7 million in the fourth quarter of 2022. Adjusted EBITDA margin was (14.4)% compared to 3.0% in the prior year period. The decrease was primarily attributable to the aforementioned lower net sales. Full Year 2023 Financial Results Net sales from continuing operations were $193.2 million compared to $262.0 million in 2022. The decrease was primarily attributable to decreases in volume throughout the year as a result of industry-wide de-stocking trends and challenging end market fundamentals. Gross profit from continuing operations was $1.5 million, or 0.8% of net sales, compared to $43.3 million or 16.5% of net sales in 2022. The decrease was primary attributable to the aforementioned decline in net sales across both segments, along with unfavorable product mix over the prior year. Net loss from continuing operations was $34.2 million, or $(3.37) diluted loss per share, compared to $17.6 million, or $1.69 diluted earnings per share in 2022. The decrease was primarily attributable to the aforementioned decline in net sales and gross margin. Adjusted EBITDA was $(15.9) million compared to $25.6 million in 2022. Adjusted EBITDA as a percentage of net sales was (8.2)% compared to 9.8% in the prior year. The decline is primarily attributable to lower operating margins across both segments compared to the prior year. Segment Results Ascent Chemicals – net sales in the fourth quarter of 2023 were $18.5 million compared to $23.5 million in the fourth quarter of 2022. Operating loss in the fourth quarter was $1.6 million compared to operating income of $0.9 million in the prior year period. Adjusted EBITDA in the fourth quarter was $(0.4) million compared to $2.0 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was (2.3)% compared to 8.6% in the fourth quarter of 2022. Net sales in 2023 were $83.6 million compared to $107.5 million in 2022. Operating loss in 2023 was $12.6 million compared to operating income of $7.0 million in the prior year. Adjusted EBITDA in 2023 was $3.4 million compared to $11.8 million in the prior year. As a percentage of segment net sales, adjusted EBITDA was 4.1% compared to 10.9% in 2022. Ascent Tubular – net sales from continuing operations in the fourth quarter of 2023 were $22.8 million compared to $30.7 million in the fourth quarter of 2022. Operating loss from continuing operations in the fourth quarter was $4.0 million compared to operating income from continuing operations of $1.2 million in the prior year period. Adjusted EBITDA from continuing operations in the fourth quarter was $(3.1) million compared to $2.1 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was (13.7)% compared to 6.9% in the fourth quarter of 2022. Net sales from continuing operations in 2023 was $109.5 million compared to $154.0 million in 2022. Operating loss from continuing operations in 2023 was $11.2 million compared to $22.2 million in the prior year. Adjusted EBITDA from continuing operations in 2023 was $(7.8) million compared to $25.7 million in the prior year. As a percentage of segment net sales, adjusted EBITDA was (7.1)% compared to 16.7% in 2022. Liquidity During the fourth quarter of 2023, Ascent announced the sale of substantially all the assets of Specialty Pipe & Tube for approximately $55 million in an all-cash transaction that closed on December 22, 2023. As a result of the sale, the Company paid off its remaining balance on the revolving credit facility in the fourth quarter of 2023. As of December 31, 2023, the Company did not have any outstanding debt on its balance sheet and had $61.8 million in availability under its revolving credit facility. For the year ended December 31, 2023, the Company repurchased 143,108 shares at an average cost of $8.97 per share for approximately $1.3 million. Conference Call Ascent will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2023. Ascent management will host the conference call, followed by a question and answer period. Date: Thursday, March 28, 2024 Time: 5:00 p.m. Eastern time Live Call Registration Link: Here Webcast Registration Link: Here To access the call by phone, please register via the live call registration link above or here and you will be provided with dial-in instructions and details. 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 via the webcast registration link above or 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 specialty chemicals and industrial tubular products. For more information about Ascent, please visit its website 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, 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, , shelf registration costs, loss on extinguishment of debt, earn-out adjustments, , 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) December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 1,851 $ 1,440 Accounts receivable, net of allowance for credit losses of $463 and $643, respectively 26,604 33,202 Inventories 52,306 67,671 Prepaid expenses and other current assets 4,879 7,770 Assets held for sale 2,912 380 Current assets of discontinued operations 861 59,912 Total current assets 89,413 170,375 Property, plant and equipment, net 29,755 35,534 Right-of-use assets, operating leases, net 27,784 29,142 Goodwill — 11,389 Intangible assets, net 8,496 10,001 Deferred income taxes 5,808 1,353 Deferred charges, net 104 203 Other non-current assets, net 1,935 1,862 Long-term assets of discontinued operations — 9,184 Total assets $ 163,295 $ 269,043 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 16,416 $ 14,114 Accrued expenses and other current liabilities 5,108 5,509 Current portion of note payable 360 387 Current portion of long-term debt — 2,464 Current portion of operating lease liabilities 1,140 1,015 Current portion of finance lease liabilities 292 280 Current liabilities of discontinued operations 1,473 9,709 Total current liabilities 24,789 33,478 Long-term debt — 69,085 Long-term portion of operating lease liabilities 29,729 30,869 Long-term portion of finance lease liabilities 1,307 1,242 Other long-term liabilities 60 68 Long-term liabilities of discontinued operations — 42 Total non-current liabilities 31,096 101,306 Total liabilities $ 55,885 $ 134,784 Commitments and contingencies Shareholders' equity: Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,094,821 shares issued and outstanding, respectively $ 11,085 $ 11,085 Capital in excess of par value 47,333 47,021 Retained earnings 58,517 85,146 116,935 143,252 Less: cost of common stock in treasury - 990,282 and 924,504 shares, respectively (9,525 ) (8,993 ) Total shareholders' equity 107,410 134,259 Total liabilities and shareholders' equity $ 163,295 $ 269,043 Note: The condensed consolidated balance sheets at December 31, 2023 and 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 December 31, Year Ended December 31, 2023 2022 2023 2022 Net sales Tubular Products $ 22,765 $ 30,697 $ 109,513 $ 154,040 Specialty Chemicals 18,451 23,473 83,616 107,542 All Other — 10 50 411 41,216 54,180 193,179 261,993 Operating income (loss) from continuing operations Tubular Products (3,995 ) 1,232 (11,210 ) 22,182 Specialty Chemicals (1,623 ) 860 (12,558 ) 6,971 All Other (116 ) (175 ) (801 ) (508 ) Corporate Unallocated corporate expenses (2,704 ) (2,761 ) (12,018 ) (12,997 ) Acquisition costs and other (569 ) (266 ) (843 ) (1,105 ) Total Corporate (3,273 ) (3,027 ) (12,861 ) (14,102 ) Operating (loss) income (9,007 ) (1,110 ) (37,430 ) 14,543 Interest expense 1,021 1,104 4,238 2,742 Other, net (249 ) (34 ) (593 ) (209 ) (Loss) income from continuing operations before income taxes (9,779 ) (2,180 ) (41,075 ) 12,010 Income tax benefit (2,244 ) (6,681 ) (6,924 ) (5,568 ) (Loss) income from continuing operations (7,535 ) 4,501 (34,151 ) 17,578 Income (loss) from discontinued operations, net of tax 18,674 (4,374 ) 7,522 4,488 Net income (loss) $ 11,139 $ 127 $ (26,629 ) $ 22,066 Net (loss) income per common share from continuing operations Basic $ (0.75 ) $ 0.44 $ (3.37 ) $ 1.72 Diluted $ (0.73 ) $ 0.43 $ (3.37 ) $ 1.69 Net income (loss) per common share from discontinued operations Basic $ 1.85 $ (0.43 ) $ 0.74 $ 0.44 Diluted $ 1.80 $ (0.42 ) $ 0.74 $ 0.43 Net income (loss) per common share Basic $ 1.10 $ 0.01 $ (2.63 ) $ 2.16 Diluted $ 1.07 $ 0.01 $ (2.63 ) $ 2.12 Average shares outstanding Basic 10,107 10,213 10,140 10,230 Diluted 10,374 10,416 10,140 10,410 Other data: Adjusted EBITDA1 $ (5,941 ) $ 1,648 $ (15,934 ) $ 25,590 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, 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, loss on extinguishment of debt, earn-out adjustments, 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 ($ in thousands) Year Ended December 31, 2023 2022 Operating activities Net (loss) income $ (26,629 ) $ 22,066 Net income from discontinued operations, net of tax 7,522 4,488 Net (loss) income from continuing operations (34,151 ) 17,578 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation expense 6,161 6,421 Amortization expense 1,505 1,853 Amortization of debt issuance costs 99 99 Goodwill impairment 11,389 — Deferred income taxes (6,924 ) (5,568 ) Payments of earn-out liabilities in excess of acquisition date fair value — (372 ) Provision for losses on accounts receivable (180 ) 478 Provision for losses on inventories 3,318 2,615 Loss (gain) on disposal of property, plant and equipment 246 (18 ) Non-cash lease expense 242 414 Issuance of treasury stock for director fees — 364 Stock-based compensation expense 1,023 1,355 Changes in operating assets and liabilities: Accounts receivable 6,778 (264 ) Inventories 12,245 (13,685 ) Other assets and liabilities 515 (211 ) Accounts payable 1,650 (6,269 ) Accounts payable - related parties — (2 ) Accrued expenses (401 ) (2,127 ) Accrued income taxes 3,129 (7,923 ) Net cash provided by (used in) operating activities - continuing operations 6,644 (5,262 ) Net cash provided by operating activities - discontinued operations 16,434 10,839 Net cash provided by operating activities 23,078 5,577 Investing activities Purchases of property, plant and equipment (2,885 ) (3,394 ) Proceeds from disposal of property, plant and equipment — 99 Net cash used in investing activities - continuing operations (2,885 ) (3,295 ) Net cash provided by (used in) investing activities - discontinued operations 53,386 (1,680 ) Net cash provided by (used in) investing activities 50,501 (4,975 ) Financing activities Borrowings from long-term debt 256,606 443,363 Proceeds from note payable 900 967 Proceeds from the exercise of stock options — 175 Payments on long-term debt (328,155 ) (442,206 ) Payments on note payable (928 ) (580 ) Principal payments on finance lease obligations (305 ) (266 ) Payments on earn-out liabilities — (484 ) Repurchase of common stock (1,287 ) (1,343 ) Net cash used in financing activities - continuing operations (73,169 ) (374 ) Net cash used in financing activities - discontinued operations — (808 ) Net cash used in financing activities (73,169 ) (1,182 ) Increase (decrease) in cash and cash equivalents 410 (580 ) Less: Cash and cash equivalents of discontinued operations — 4 Cash and cash equivalents, beginning of period 1,441 2,017 Cash and cash equivalents, end of period $ 1,851 $ 1,441 Ascent Industries Co. Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) ($ in thousands) Three Months Ended December 31, Year Ended December 31, ($ in thousands) 2023 2022 2023 2022 Consolidated Net (loss) income from continuing operations $ (7,535 ) $ 4,501 $ (34,151 ) $ 17,578 Adjustments: Interest expense 1,021 1,104 4,238 2,742 Income taxes (2,244 ) (6,681 ) (6,924 ) (5,568 ) Depreciation 1,527 1,579 6,161 6,421 Amortization 376 429 1,505 1,853 EBITDA (6,855 ) 932 (29,171 ) 23,026 Acquisition costs and other 579 266 856 1,104 Shelf registration costs — 12 — 12 Goodwill impairment — — 11,389 — Gain on lease modification — — — (2 ) Stock-based compensation 224 283 594 962 Non-cash lease expense 52 91 242 414 Retention expense 20 — 26 — Restructuring and severance costs 39 64 130 74 Adjusted EBITDA $ (5,941 ) $ 1,648 $ (15,934 ) $ 25,590 % sales (14.4 )% 3.0 % (8.2 )% 9.8 % Tubular Products Net (loss) income from continuing operations $ (3,995 ) $ 1,232 $ (11,210 ) $ 22,182 Adjustments: Depreciation expense 557 609 2,274 2,500 Amortization expense 217 238 871 951 EBITDA (3,221 ) 2,079 (8,065 ) 25,633 Stock-based compensation 74 11 58 46 Non-cash lease expense 25 — 118 — Retention expense 8 — 8 — Restructuring and severance costs — 20 84 20 Tubular Products Adjusted EBITDA $ (3,114 ) $ 2,110 $ (7,797 ) $ 25,699 % segment sales (13.7 )% 6.9 % (7.1 )% 16.7 % Specialty Chemicals Net (loss) income $ (1,644 ) $ 852 $ (12,619 ) $ 6,935 Adjustments: Interest expense 22 9 74 36 Depreciation expense 948 949 3,798 3,846 Amortization expense 158 191 634 903 EBITDA (516 ) 2,001 (8,113 ) 11,720 Acquisition costs and other 10 — 12 — Goodwill impairment — — 11,389 — Stock-based compensation 21 12 8 41 Non-cash lease expense 19 — 88 2 Restructuring and severance costs 40 8 40 8 Specialty Chemicals Adjusted EBITDA $ (426 ) $ 2,021 $ 3,424 $ 11,771 % segment sales (2.3 )% 8.6 % 4.1 % 10.9 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240328924168/en/Contacts Company Contact Ryan Kavalauskas 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 Fourth Quarter and Full Year 2023 Results By: Ascent Industries Co. via Business Wire March 28, 2024 at 16:05 PM EDT Eliminated All Outstanding Debt with Cash Proceeds from the Sale of Specialty Pipe & Tube New Leadership Focused on Accelerating Profitable Growth and Maximizing Value Ascent Industries Co. (Nasdaq: ACNT) (“Ascent” or the “Company”), an industrials company focused on the production of specialty chemicals and industrial tubular products, is reporting its results for the fourth quarter and full year ended December 31, 2023. Fourth Quarter 2023 Summary1 (in millions, except per share and margin) Q4 2023 Q4 2022 Change Net Sales $41.2 $54.2 (23.9)% Gross Profit $(2.1) $4.9 (143.9)% Gross Profit Margin (5.2)% 9.0% (1,420)bps Net (Loss) Income $(7.5) $4.5 (267.4)% Diluted (Loss) Earnings per Share $(0.73) $0.43 (269.8)% Adjusted EBITDA $(5.9) $1.7 (460.5)% Adjusted EBITDA Margin (14.4)% 3.0% (1,740)bps Full Year 2023 Summary1 (in millions, except per share and margin) 2023 2022 Change Net Sales $193.2 $262.0 (26.3)% Gross Profit $1.5 $43.3 (96.5)% Gross Profit Margin 0.8% 16.5% (1,570)bps Net (Loss) Income $(34.2) $17.6 (294.3)% Diluted (Loss) Earnings per share $(3.37) $1.69 (299.4)% Adjusted EBITDA $(15.9) $25.6 (162.3)% Adjusted EBITDA Margin (8.2)% 9.8% (1,800)bps ____________________________ 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. On December 22, 2023, the Company closed on a transaction to sell substantially all of the assets of Specialty Pipe & Tube (“SPT”). As a result, financial results from Munhall & SPT have been categorized into discontinued operations. Management Commentary “The Ascent team made notable progress towards our long-term strategic goals in 2023, despite continued market headwinds,” said Ascent CEO Bryan Kitchen. “This progress was driven by meaningful initiatives to onboard new customers and unlock operational efficiencies that we expect to bear fruit next year. However, our momentum in the fourth quarter was not sufficient to fully mitigate the adverse effects of industry-wide destocking trends that impacted both business segments. Prior to year-end, Ascent closed on a sale of substantially all of the assets of Specialty Pipe and Tube, generating $55 million in an all-cash transaction. These proceeds were utilized to clear remaining debt, positioning the Company favorably as it entered 2024. “We moved into 2024 with a healthy financial position and a commitment to driving sustainable earnings-growth across the enterprise. This commitment is underscored by purposeful initiatives to recapitalize talent and capabilities, aimed to maximize the value derived from the unique strengths within our tubular segment while simultaneously investing in the growth potential of the specialty chemicals segment. We believe our newly-assembled management team has already begun to make progress towards our long-term goals focused on creating durable shareholder value.” Fourth Quarter 2023 Financial Results Net sales from continuing operations were $41.2 million compared to $54.2 million in the prior year period, primarily attributable to decreased end-market demand and de-stocking trends across both segments. Gross profit from continuing operations was $(2.1) million, or (5.2%) of net sales, compared to $4.9 million, or 9.0% of net sales, in the fourth quarter of 2022. The decrease was primarily attributable to elevated costs and unfavorable product mix. Net loss from continuing operations was $7.5 million, or $(0.73) diluted loss per share, compared to net income from continuing operations of $4.5 million, or $0.43 diluted earnings per share, in the fourth quarter of 2022. The decrease was primarily attributable to the aforementioned lower net sales, along with an increase in administrative expenses. Adjusted EBITDA was $(5.9) million compared to $1.7 million in the fourth quarter of 2022. Adjusted EBITDA margin was (14.4)% compared to 3.0% in the prior year period. The decrease was primarily attributable to the aforementioned lower net sales. Full Year 2023 Financial Results Net sales from continuing operations were $193.2 million compared to $262.0 million in 2022. The decrease was primarily attributable to decreases in volume throughout the year as a result of industry-wide de-stocking trends and challenging end market fundamentals. Gross profit from continuing operations was $1.5 million, or 0.8% of net sales, compared to $43.3 million or 16.5% of net sales in 2022. The decrease was primary attributable to the aforementioned decline in net sales across both segments, along with unfavorable product mix over the prior year. Net loss from continuing operations was $34.2 million, or $(3.37) diluted loss per share, compared to $17.6 million, or $1.69 diluted earnings per share in 2022. The decrease was primarily attributable to the aforementioned decline in net sales and gross margin. Adjusted EBITDA was $(15.9) million compared to $25.6 million in 2022. Adjusted EBITDA as a percentage of net sales was (8.2)% compared to 9.8% in the prior year. The decline is primarily attributable to lower operating margins across both segments compared to the prior year. Segment Results Ascent Chemicals – net sales in the fourth quarter of 2023 were $18.5 million compared to $23.5 million in the fourth quarter of 2022. Operating loss in the fourth quarter was $1.6 million compared to operating income of $0.9 million in the prior year period. Adjusted EBITDA in the fourth quarter was $(0.4) million compared to $2.0 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was (2.3)% compared to 8.6% in the fourth quarter of 2022. Net sales in 2023 were $83.6 million compared to $107.5 million in 2022. Operating loss in 2023 was $12.6 million compared to operating income of $7.0 million in the prior year. Adjusted EBITDA in 2023 was $3.4 million compared to $11.8 million in the prior year. As a percentage of segment net sales, adjusted EBITDA was 4.1% compared to 10.9% in 2022. Ascent Tubular – net sales from continuing operations in the fourth quarter of 2023 were $22.8 million compared to $30.7 million in the fourth quarter of 2022. Operating loss from continuing operations in the fourth quarter was $4.0 million compared to operating income from continuing operations of $1.2 million in the prior year period. Adjusted EBITDA from continuing operations in the fourth quarter was $(3.1) million compared to $2.1 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was (13.7)% compared to 6.9% in the fourth quarter of 2022. Net sales from continuing operations in 2023 was $109.5 million compared to $154.0 million in 2022. Operating loss from continuing operations in 2023 was $11.2 million compared to $22.2 million in the prior year. Adjusted EBITDA from continuing operations in 2023 was $(7.8) million compared to $25.7 million in the prior year. As a percentage of segment net sales, adjusted EBITDA was (7.1)% compared to 16.7% in 2022. Liquidity During the fourth quarter of 2023, Ascent announced the sale of substantially all the assets of Specialty Pipe & Tube for approximately $55 million in an all-cash transaction that closed on December 22, 2023. As a result of the sale, the Company paid off its remaining balance on the revolving credit facility in the fourth quarter of 2023. As of December 31, 2023, the Company did not have any outstanding debt on its balance sheet and had $61.8 million in availability under its revolving credit facility. For the year ended December 31, 2023, the Company repurchased 143,108 shares at an average cost of $8.97 per share for approximately $1.3 million. Conference Call Ascent will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2023. Ascent management will host the conference call, followed by a question and answer period. Date: Thursday, March 28, 2024 Time: 5:00 p.m. Eastern time Live Call Registration Link: Here Webcast Registration Link: Here To access the call by phone, please register via the live call registration link above or here and you will be provided with dial-in instructions and details. 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 via the webcast registration link above or 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 specialty chemicals and industrial tubular products. For more information about Ascent, please visit its website 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, 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, , shelf registration costs, loss on extinguishment of debt, earn-out adjustments, , 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) December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 1,851 $ 1,440 Accounts receivable, net of allowance for credit losses of $463 and $643, respectively 26,604 33,202 Inventories 52,306 67,671 Prepaid expenses and other current assets 4,879 7,770 Assets held for sale 2,912 380 Current assets of discontinued operations 861 59,912 Total current assets 89,413 170,375 Property, plant and equipment, net 29,755 35,534 Right-of-use assets, operating leases, net 27,784 29,142 Goodwill — 11,389 Intangible assets, net 8,496 10,001 Deferred income taxes 5,808 1,353 Deferred charges, net 104 203 Other non-current assets, net 1,935 1,862 Long-term assets of discontinued operations — 9,184 Total assets $ 163,295 $ 269,043 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 16,416 $ 14,114 Accrued expenses and other current liabilities 5,108 5,509 Current portion of note payable 360 387 Current portion of long-term debt — 2,464 Current portion of operating lease liabilities 1,140 1,015 Current portion of finance lease liabilities 292 280 Current liabilities of discontinued operations 1,473 9,709 Total current liabilities 24,789 33,478 Long-term debt — 69,085 Long-term portion of operating lease liabilities 29,729 30,869 Long-term portion of finance lease liabilities 1,307 1,242 Other long-term liabilities 60 68 Long-term liabilities of discontinued operations — 42 Total non-current liabilities 31,096 101,306 Total liabilities $ 55,885 $ 134,784 Commitments and contingencies Shareholders' equity: Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,094,821 shares issued and outstanding, respectively $ 11,085 $ 11,085 Capital in excess of par value 47,333 47,021 Retained earnings 58,517 85,146 116,935 143,252 Less: cost of common stock in treasury - 990,282 and 924,504 shares, respectively (9,525 ) (8,993 ) Total shareholders' equity 107,410 134,259 Total liabilities and shareholders' equity $ 163,295 $ 269,043 Note: The condensed consolidated balance sheets at December 31, 2023 and 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 December 31, Year Ended December 31, 2023 2022 2023 2022 Net sales Tubular Products $ 22,765 $ 30,697 $ 109,513 $ 154,040 Specialty Chemicals 18,451 23,473 83,616 107,542 All Other — 10 50 411 41,216 54,180 193,179 261,993 Operating income (loss) from continuing operations Tubular Products (3,995 ) 1,232 (11,210 ) 22,182 Specialty Chemicals (1,623 ) 860 (12,558 ) 6,971 All Other (116 ) (175 ) (801 ) (508 ) Corporate Unallocated corporate expenses (2,704 ) (2,761 ) (12,018 ) (12,997 ) Acquisition costs and other (569 ) (266 ) (843 ) (1,105 ) Total Corporate (3,273 ) (3,027 ) (12,861 ) (14,102 ) Operating (loss) income (9,007 ) (1,110 ) (37,430 ) 14,543 Interest expense 1,021 1,104 4,238 2,742 Other, net (249 ) (34 ) (593 ) (209 ) (Loss) income from continuing operations before income taxes (9,779 ) (2,180 ) (41,075 ) 12,010 Income tax benefit (2,244 ) (6,681 ) (6,924 ) (5,568 ) (Loss) income from continuing operations (7,535 ) 4,501 (34,151 ) 17,578 Income (loss) from discontinued operations, net of tax 18,674 (4,374 ) 7,522 4,488 Net income (loss) $ 11,139 $ 127 $ (26,629 ) $ 22,066 Net (loss) income per common share from continuing operations Basic $ (0.75 ) $ 0.44 $ (3.37 ) $ 1.72 Diluted $ (0.73 ) $ 0.43 $ (3.37 ) $ 1.69 Net income (loss) per common share from discontinued operations Basic $ 1.85 $ (0.43 ) $ 0.74 $ 0.44 Diluted $ 1.80 $ (0.42 ) $ 0.74 $ 0.43 Net income (loss) per common share Basic $ 1.10 $ 0.01 $ (2.63 ) $ 2.16 Diluted $ 1.07 $ 0.01 $ (2.63 ) $ 2.12 Average shares outstanding Basic 10,107 10,213 10,140 10,230 Diluted 10,374 10,416 10,140 10,410 Other data: Adjusted EBITDA1 $ (5,941 ) $ 1,648 $ (15,934 ) $ 25,590 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, 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, loss on extinguishment of debt, earn-out adjustments, 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 ($ in thousands) Year Ended December 31, 2023 2022 Operating activities Net (loss) income $ (26,629 ) $ 22,066 Net income from discontinued operations, net of tax 7,522 4,488 Net (loss) income from continuing operations (34,151 ) 17,578 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation expense 6,161 6,421 Amortization expense 1,505 1,853 Amortization of debt issuance costs 99 99 Goodwill impairment 11,389 — Deferred income taxes (6,924 ) (5,568 ) Payments of earn-out liabilities in excess of acquisition date fair value — (372 ) Provision for losses on accounts receivable (180 ) 478 Provision for losses on inventories 3,318 2,615 Loss (gain) on disposal of property, plant and equipment 246 (18 ) Non-cash lease expense 242 414 Issuance of treasury stock for director fees — 364 Stock-based compensation expense 1,023 1,355 Changes in operating assets and liabilities: Accounts receivable 6,778 (264 ) Inventories 12,245 (13,685 ) Other assets and liabilities 515 (211 ) Accounts payable 1,650 (6,269 ) Accounts payable - related parties — (2 ) Accrued expenses (401 ) (2,127 ) Accrued income taxes 3,129 (7,923 ) Net cash provided by (used in) operating activities - continuing operations 6,644 (5,262 ) Net cash provided by operating activities - discontinued operations 16,434 10,839 Net cash provided by operating activities 23,078 5,577 Investing activities Purchases of property, plant and equipment (2,885 ) (3,394 ) Proceeds from disposal of property, plant and equipment — 99 Net cash used in investing activities - continuing operations (2,885 ) (3,295 ) Net cash provided by (used in) investing activities - discontinued operations 53,386 (1,680 ) Net cash provided by (used in) investing activities 50,501 (4,975 ) Financing activities Borrowings from long-term debt 256,606 443,363 Proceeds from note payable 900 967 Proceeds from the exercise of stock options — 175 Payments on long-term debt (328,155 ) (442,206 ) Payments on note payable (928 ) (580 ) Principal payments on finance lease obligations (305 ) (266 ) Payments on earn-out liabilities — (484 ) Repurchase of common stock (1,287 ) (1,343 ) Net cash used in financing activities - continuing operations (73,169 ) (374 ) Net cash used in financing activities - discontinued operations — (808 ) Net cash used in financing activities (73,169 ) (1,182 ) Increase (decrease) in cash and cash equivalents 410 (580 ) Less: Cash and cash equivalents of discontinued operations — 4 Cash and cash equivalents, beginning of period 1,441 2,017 Cash and cash equivalents, end of period $ 1,851 $ 1,441 Ascent Industries Co. Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) ($ in thousands) Three Months Ended December 31, Year Ended December 31, ($ in thousands) 2023 2022 2023 2022 Consolidated Net (loss) income from continuing operations $ (7,535 ) $ 4,501 $ (34,151 ) $ 17,578 Adjustments: Interest expense 1,021 1,104 4,238 2,742 Income taxes (2,244 ) (6,681 ) (6,924 ) (5,568 ) Depreciation 1,527 1,579 6,161 6,421 Amortization 376 429 1,505 1,853 EBITDA (6,855 ) 932 (29,171 ) 23,026 Acquisition costs and other 579 266 856 1,104 Shelf registration costs — 12 — 12 Goodwill impairment — — 11,389 — Gain on lease modification — — — (2 ) Stock-based compensation 224 283 594 962 Non-cash lease expense 52 91 242 414 Retention expense 20 — 26 — Restructuring and severance costs 39 64 130 74 Adjusted EBITDA $ (5,941 ) $ 1,648 $ (15,934 ) $ 25,590 % sales (14.4 )% 3.0 % (8.2 )% 9.8 % Tubular Products Net (loss) income from continuing operations $ (3,995 ) $ 1,232 $ (11,210 ) $ 22,182 Adjustments: Depreciation expense 557 609 2,274 2,500 Amortization expense 217 238 871 951 EBITDA (3,221 ) 2,079 (8,065 ) 25,633 Stock-based compensation 74 11 58 46 Non-cash lease expense 25 — 118 — Retention expense 8 — 8 — Restructuring and severance costs — 20 84 20 Tubular Products Adjusted EBITDA $ (3,114 ) $ 2,110 $ (7,797 ) $ 25,699 % segment sales (13.7 )% 6.9 % (7.1 )% 16.7 % Specialty Chemicals Net (loss) income $ (1,644 ) $ 852 $ (12,619 ) $ 6,935 Adjustments: Interest expense 22 9 74 36 Depreciation expense 948 949 3,798 3,846 Amortization expense 158 191 634 903 EBITDA (516 ) 2,001 (8,113 ) 11,720 Acquisition costs and other 10 — 12 — Goodwill impairment — — 11,389 — Stock-based compensation 21 12 8 41 Non-cash lease expense 19 — 88 2 Restructuring and severance costs 40 8 40 8 Specialty Chemicals Adjusted EBITDA $ (426 ) $ 2,021 $ 3,424 $ 11,771 % segment sales (2.3 )% 8.6 % 4.1 % 10.9 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240328924168/en/Contacts Company Contact Ryan Kavalauskas 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
Eliminated All Outstanding Debt with Cash Proceeds from the Sale of Specialty Pipe & Tube New Leadership Focused on Accelerating Profitable Growth and Maximizing Value
Ascent Industries Co. (Nasdaq: ACNT) (“Ascent” or the “Company”), an industrials company focused on the production of specialty chemicals and industrial tubular products, is reporting its results for the fourth quarter and full year ended December 31, 2023. Fourth Quarter 2023 Summary1 (in millions, except per share and margin) Q4 2023 Q4 2022 Change Net Sales $41.2 $54.2 (23.9)% Gross Profit $(2.1) $4.9 (143.9)% Gross Profit Margin (5.2)% 9.0% (1,420)bps Net (Loss) Income $(7.5) $4.5 (267.4)% Diluted (Loss) Earnings per Share $(0.73) $0.43 (269.8)% Adjusted EBITDA $(5.9) $1.7 (460.5)% Adjusted EBITDA Margin (14.4)% 3.0% (1,740)bps Full Year 2023 Summary1 (in millions, except per share and margin) 2023 2022 Change Net Sales $193.2 $262.0 (26.3)% Gross Profit $1.5 $43.3 (96.5)% Gross Profit Margin 0.8% 16.5% (1,570)bps Net (Loss) Income $(34.2) $17.6 (294.3)% Diluted (Loss) Earnings per share $(3.37) $1.69 (299.4)% Adjusted EBITDA $(15.9) $25.6 (162.3)% Adjusted EBITDA Margin (8.2)% 9.8% (1,800)bps ____________________________ 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. On December 22, 2023, the Company closed on a transaction to sell substantially all of the assets of Specialty Pipe & Tube (“SPT”). As a result, financial results from Munhall & SPT have been categorized into discontinued operations. Management Commentary “The Ascent team made notable progress towards our long-term strategic goals in 2023, despite continued market headwinds,” said Ascent CEO Bryan Kitchen. “This progress was driven by meaningful initiatives to onboard new customers and unlock operational efficiencies that we expect to bear fruit next year. However, our momentum in the fourth quarter was not sufficient to fully mitigate the adverse effects of industry-wide destocking trends that impacted both business segments. Prior to year-end, Ascent closed on a sale of substantially all of the assets of Specialty Pipe and Tube, generating $55 million in an all-cash transaction. These proceeds were utilized to clear remaining debt, positioning the Company favorably as it entered 2024. “We moved into 2024 with a healthy financial position and a commitment to driving sustainable earnings-growth across the enterprise. This commitment is underscored by purposeful initiatives to recapitalize talent and capabilities, aimed to maximize the value derived from the unique strengths within our tubular segment while simultaneously investing in the growth potential of the specialty chemicals segment. We believe our newly-assembled management team has already begun to make progress towards our long-term goals focused on creating durable shareholder value.” Fourth Quarter 2023 Financial Results Net sales from continuing operations were $41.2 million compared to $54.2 million in the prior year period, primarily attributable to decreased end-market demand and de-stocking trends across both segments. Gross profit from continuing operations was $(2.1) million, or (5.2%) of net sales, compared to $4.9 million, or 9.0% of net sales, in the fourth quarter of 2022. The decrease was primarily attributable to elevated costs and unfavorable product mix. Net loss from continuing operations was $7.5 million, or $(0.73) diluted loss per share, compared to net income from continuing operations of $4.5 million, or $0.43 diluted earnings per share, in the fourth quarter of 2022. The decrease was primarily attributable to the aforementioned lower net sales, along with an increase in administrative expenses. Adjusted EBITDA was $(5.9) million compared to $1.7 million in the fourth quarter of 2022. Adjusted EBITDA margin was (14.4)% compared to 3.0% in the prior year period. The decrease was primarily attributable to the aforementioned lower net sales. Full Year 2023 Financial Results Net sales from continuing operations were $193.2 million compared to $262.0 million in 2022. The decrease was primarily attributable to decreases in volume throughout the year as a result of industry-wide de-stocking trends and challenging end market fundamentals. Gross profit from continuing operations was $1.5 million, or 0.8% of net sales, compared to $43.3 million or 16.5% of net sales in 2022. The decrease was primary attributable to the aforementioned decline in net sales across both segments, along with unfavorable product mix over the prior year. Net loss from continuing operations was $34.2 million, or $(3.37) diluted loss per share, compared to $17.6 million, or $1.69 diluted earnings per share in 2022. The decrease was primarily attributable to the aforementioned decline in net sales and gross margin. Adjusted EBITDA was $(15.9) million compared to $25.6 million in 2022. Adjusted EBITDA as a percentage of net sales was (8.2)% compared to 9.8% in the prior year. The decline is primarily attributable to lower operating margins across both segments compared to the prior year. Segment Results Ascent Chemicals – net sales in the fourth quarter of 2023 were $18.5 million compared to $23.5 million in the fourth quarter of 2022. Operating loss in the fourth quarter was $1.6 million compared to operating income of $0.9 million in the prior year period. Adjusted EBITDA in the fourth quarter was $(0.4) million compared to $2.0 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was (2.3)% compared to 8.6% in the fourth quarter of 2022. Net sales in 2023 were $83.6 million compared to $107.5 million in 2022. Operating loss in 2023 was $12.6 million compared to operating income of $7.0 million in the prior year. Adjusted EBITDA in 2023 was $3.4 million compared to $11.8 million in the prior year. As a percentage of segment net sales, adjusted EBITDA was 4.1% compared to 10.9% in 2022. Ascent Tubular – net sales from continuing operations in the fourth quarter of 2023 were $22.8 million compared to $30.7 million in the fourth quarter of 2022. Operating loss from continuing operations in the fourth quarter was $4.0 million compared to operating income from continuing operations of $1.2 million in the prior year period. Adjusted EBITDA from continuing operations in the fourth quarter was $(3.1) million compared to $2.1 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA was (13.7)% compared to 6.9% in the fourth quarter of 2022. Net sales from continuing operations in 2023 was $109.5 million compared to $154.0 million in 2022. Operating loss from continuing operations in 2023 was $11.2 million compared to $22.2 million in the prior year. Adjusted EBITDA from continuing operations in 2023 was $(7.8) million compared to $25.7 million in the prior year. As a percentage of segment net sales, adjusted EBITDA was (7.1)% compared to 16.7% in 2022. Liquidity During the fourth quarter of 2023, Ascent announced the sale of substantially all the assets of Specialty Pipe & Tube for approximately $55 million in an all-cash transaction that closed on December 22, 2023. As a result of the sale, the Company paid off its remaining balance on the revolving credit facility in the fourth quarter of 2023. As of December 31, 2023, the Company did not have any outstanding debt on its balance sheet and had $61.8 million in availability under its revolving credit facility. For the year ended December 31, 2023, the Company repurchased 143,108 shares at an average cost of $8.97 per share for approximately $1.3 million. Conference Call Ascent will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2023. Ascent management will host the conference call, followed by a question and answer period. Date: Thursday, March 28, 2024 Time: 5:00 p.m. Eastern time Live Call Registration Link: Here Webcast Registration Link: Here To access the call by phone, please register via the live call registration link above or here and you will be provided with dial-in instructions and details. 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 via the webcast registration link above or 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 specialty chemicals and industrial tubular products. For more information about Ascent, please visit its website 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, 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, , shelf registration costs, loss on extinguishment of debt, earn-out adjustments, , 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) December 31, 2023 December 31, 2022 Assets Current assets: Cash and cash equivalents $ 1,851 $ 1,440 Accounts receivable, net of allowance for credit losses of $463 and $643, respectively 26,604 33,202 Inventories 52,306 67,671 Prepaid expenses and other current assets 4,879 7,770 Assets held for sale 2,912 380 Current assets of discontinued operations 861 59,912 Total current assets 89,413 170,375 Property, plant and equipment, net 29,755 35,534 Right-of-use assets, operating leases, net 27,784 29,142 Goodwill — 11,389 Intangible assets, net 8,496 10,001 Deferred income taxes 5,808 1,353 Deferred charges, net 104 203 Other non-current assets, net 1,935 1,862 Long-term assets of discontinued operations — 9,184 Total assets $ 163,295 $ 269,043 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 16,416 $ 14,114 Accrued expenses and other current liabilities 5,108 5,509 Current portion of note payable 360 387 Current portion of long-term debt — 2,464 Current portion of operating lease liabilities 1,140 1,015 Current portion of finance lease liabilities 292 280 Current liabilities of discontinued operations 1,473 9,709 Total current liabilities 24,789 33,478 Long-term debt — 69,085 Long-term portion of operating lease liabilities 29,729 30,869 Long-term portion of finance lease liabilities 1,307 1,242 Other long-term liabilities 60 68 Long-term liabilities of discontinued operations — 42 Total non-current liabilities 31,096 101,306 Total liabilities $ 55,885 $ 134,784 Commitments and contingencies Shareholders' equity: Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,094,821 shares issued and outstanding, respectively $ 11,085 $ 11,085 Capital in excess of par value 47,333 47,021 Retained earnings 58,517 85,146 116,935 143,252 Less: cost of common stock in treasury - 990,282 and 924,504 shares, respectively (9,525 ) (8,993 ) Total shareholders' equity 107,410 134,259 Total liabilities and shareholders' equity $ 163,295 $ 269,043 Note: The condensed consolidated balance sheets at December 31, 2023 and 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 December 31, Year Ended December 31, 2023 2022 2023 2022 Net sales Tubular Products $ 22,765 $ 30,697 $ 109,513 $ 154,040 Specialty Chemicals 18,451 23,473 83,616 107,542 All Other — 10 50 411 41,216 54,180 193,179 261,993 Operating income (loss) from continuing operations Tubular Products (3,995 ) 1,232 (11,210 ) 22,182 Specialty Chemicals (1,623 ) 860 (12,558 ) 6,971 All Other (116 ) (175 ) (801 ) (508 ) Corporate Unallocated corporate expenses (2,704 ) (2,761 ) (12,018 ) (12,997 ) Acquisition costs and other (569 ) (266 ) (843 ) (1,105 ) Total Corporate (3,273 ) (3,027 ) (12,861 ) (14,102 ) Operating (loss) income (9,007 ) (1,110 ) (37,430 ) 14,543 Interest expense 1,021 1,104 4,238 2,742 Other, net (249 ) (34 ) (593 ) (209 ) (Loss) income from continuing operations before income taxes (9,779 ) (2,180 ) (41,075 ) 12,010 Income tax benefit (2,244 ) (6,681 ) (6,924 ) (5,568 ) (Loss) income from continuing operations (7,535 ) 4,501 (34,151 ) 17,578 Income (loss) from discontinued operations, net of tax 18,674 (4,374 ) 7,522 4,488 Net income (loss) $ 11,139 $ 127 $ (26,629 ) $ 22,066 Net (loss) income per common share from continuing operations Basic $ (0.75 ) $ 0.44 $ (3.37 ) $ 1.72 Diluted $ (0.73 ) $ 0.43 $ (3.37 ) $ 1.69 Net income (loss) per common share from discontinued operations Basic $ 1.85 $ (0.43 ) $ 0.74 $ 0.44 Diluted $ 1.80 $ (0.42 ) $ 0.74 $ 0.43 Net income (loss) per common share Basic $ 1.10 $ 0.01 $ (2.63 ) $ 2.16 Diluted $ 1.07 $ 0.01 $ (2.63 ) $ 2.12 Average shares outstanding Basic 10,107 10,213 10,140 10,230 Diluted 10,374 10,416 10,140 10,410 Other data: Adjusted EBITDA1 $ (5,941 ) $ 1,648 $ (15,934 ) $ 25,590 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, 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, loss on extinguishment of debt, earn-out adjustments, 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 ($ in thousands) Year Ended December 31, 2023 2022 Operating activities Net (loss) income $ (26,629 ) $ 22,066 Net income from discontinued operations, net of tax 7,522 4,488 Net (loss) income from continuing operations (34,151 ) 17,578 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation expense 6,161 6,421 Amortization expense 1,505 1,853 Amortization of debt issuance costs 99 99 Goodwill impairment 11,389 — Deferred income taxes (6,924 ) (5,568 ) Payments of earn-out liabilities in excess of acquisition date fair value — (372 ) Provision for losses on accounts receivable (180 ) 478 Provision for losses on inventories 3,318 2,615 Loss (gain) on disposal of property, plant and equipment 246 (18 ) Non-cash lease expense 242 414 Issuance of treasury stock for director fees — 364 Stock-based compensation expense 1,023 1,355 Changes in operating assets and liabilities: Accounts receivable 6,778 (264 ) Inventories 12,245 (13,685 ) Other assets and liabilities 515 (211 ) Accounts payable 1,650 (6,269 ) Accounts payable - related parties — (2 ) Accrued expenses (401 ) (2,127 ) Accrued income taxes 3,129 (7,923 ) Net cash provided by (used in) operating activities - continuing operations 6,644 (5,262 ) Net cash provided by operating activities - discontinued operations 16,434 10,839 Net cash provided by operating activities 23,078 5,577 Investing activities Purchases of property, plant and equipment (2,885 ) (3,394 ) Proceeds from disposal of property, plant and equipment — 99 Net cash used in investing activities - continuing operations (2,885 ) (3,295 ) Net cash provided by (used in) investing activities - discontinued operations 53,386 (1,680 ) Net cash provided by (used in) investing activities 50,501 (4,975 ) Financing activities Borrowings from long-term debt 256,606 443,363 Proceeds from note payable 900 967 Proceeds from the exercise of stock options — 175 Payments on long-term debt (328,155 ) (442,206 ) Payments on note payable (928 ) (580 ) Principal payments on finance lease obligations (305 ) (266 ) Payments on earn-out liabilities — (484 ) Repurchase of common stock (1,287 ) (1,343 ) Net cash used in financing activities - continuing operations (73,169 ) (374 ) Net cash used in financing activities - discontinued operations — (808 ) Net cash used in financing activities (73,169 ) (1,182 ) Increase (decrease) in cash and cash equivalents 410 (580 ) Less: Cash and cash equivalents of discontinued operations — 4 Cash and cash equivalents, beginning of period 1,441 2,017 Cash and cash equivalents, end of period $ 1,851 $ 1,441 Ascent Industries Co. Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) ($ in thousands) Three Months Ended December 31, Year Ended December 31, ($ in thousands) 2023 2022 2023 2022 Consolidated Net (loss) income from continuing operations $ (7,535 ) $ 4,501 $ (34,151 ) $ 17,578 Adjustments: Interest expense 1,021 1,104 4,238 2,742 Income taxes (2,244 ) (6,681 ) (6,924 ) (5,568 ) Depreciation 1,527 1,579 6,161 6,421 Amortization 376 429 1,505 1,853 EBITDA (6,855 ) 932 (29,171 ) 23,026 Acquisition costs and other 579 266 856 1,104 Shelf registration costs — 12 — 12 Goodwill impairment — — 11,389 — Gain on lease modification — — — (2 ) Stock-based compensation 224 283 594 962 Non-cash lease expense 52 91 242 414 Retention expense 20 — 26 — Restructuring and severance costs 39 64 130 74 Adjusted EBITDA $ (5,941 ) $ 1,648 $ (15,934 ) $ 25,590 % sales (14.4 )% 3.0 % (8.2 )% 9.8 % Tubular Products Net (loss) income from continuing operations $ (3,995 ) $ 1,232 $ (11,210 ) $ 22,182 Adjustments: Depreciation expense 557 609 2,274 2,500 Amortization expense 217 238 871 951 EBITDA (3,221 ) 2,079 (8,065 ) 25,633 Stock-based compensation 74 11 58 46 Non-cash lease expense 25 — 118 — Retention expense 8 — 8 — Restructuring and severance costs — 20 84 20 Tubular Products Adjusted EBITDA $ (3,114 ) $ 2,110 $ (7,797 ) $ 25,699 % segment sales (13.7 )% 6.9 % (7.1 )% 16.7 % Specialty Chemicals Net (loss) income $ (1,644 ) $ 852 $ (12,619 ) $ 6,935 Adjustments: Interest expense 22 9 74 36 Depreciation expense 948 949 3,798 3,846 Amortization expense 158 191 634 903 EBITDA (516 ) 2,001 (8,113 ) 11,720 Acquisition costs and other 10 — 12 — Goodwill impairment — — 11,389 — Stock-based compensation 21 12 8 41 Non-cash lease expense 19 — 88 2 Restructuring and severance costs 40 8 40 8 Specialty Chemicals Adjusted EBITDA $ (426 ) $ 2,021 $ 3,424 $ 11,771 % segment sales (2.3 )% 8.6 % 4.1 % 10.9 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240328924168/en/
Company Contact Ryan Kavalauskas 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