Company Announcements

¹

Sales outlook for 2025 assumes higher average sulfur prices compared to 2024 and higher projected pass-through of sulfur costs of approximately $35 million.

²

In reliance upon the unreasonable efforts exemption provided under Item 10(e)(1)(i)(B) of Regulation S-K, the Company is not able to provide a reconciliation of its non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation such as certain non-cash, nonrecurring or other items that are included in net income and net cash provided by operating activities as well as the related tax impacts of these items and asset dispositions / acquisitions and changes in foreign currency exchange rates that are included in cash flow, due to the uncertainty and variability of the nature and amount of these future charges and costs. Because this information is uncertain, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.

ECOVYST INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(in millions, except share and per share amounts)

Three months ended

December 31,

%

Years ended

December 31,

%

2024

2023

Change

2024

2023

Change

Sales

$   182.0

$   172.8

5.3 %

$   704.5

$   691.1

1.9 %

Cost of goods sold

128.1

125.5

2.1 %

503.0

493.2

2.0 %

Gross profit

53.9

47.3

14.0 %

201.5

197.9

1.8 %

Selling, general and administrative expenses

19.6

19.7

(0.5) %

83.9

79.2

5.9 %

Other operating expense, net

9.7

4.8

102.1 %

19.6

22.0

(10.9) %

Operating income

24.6

22.8

7.9 %

98.0

96.7

1.3 %

Equity in net (income) from affiliated companies

(12.6)

(14.3)

(11.9) %

(15.1)

(30.6)

(50.7) %

Impairment of investment in affiliated companies

65.0

—

NM

65.0

—

NM

Interest expense, net

11.8

13.9

(15.1) %

49.4

44.7

10.5 %

Debt extinguishment costs

—

—

— %

4.6

—

NM

Other (income) expense, net

(1.9)

—

NM

(0.8)

0.6

(233.3) %

(Loss) income before income taxes

(37.7)

23.2

(262.5) %

(5.1)

82.0

(106.2) %

(Benefit) provision for income taxes

(7.2)

(6.8)

5.9 %

1.6

10.8

(85.2) %

Effective tax rate

19.1 %

(29.3) %

(32.5) %

13.2 %

Net (loss) income

$   (30.5)

$     30.0

(201.7) %

$     (6.7)

$     71.2

(109.4) %

Earnings per share:

Basic (loss) earnings per share

$   (0.26)

$     0.26

$   (0.06)

$     0.60

Diluted (loss) earnings per share

$   (0.26)

$     0.26

$   (0.06)

$     0.60

Weighted average shares outstanding:

Basic

116,518,933

116,116,895

116,719,437

118,367,214

Diluted

116,518,933

117,190,747

116,719,437

119,487,709

ECOVYST INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

December 31,

2024

2023

ASSETS

Cash and cash equivalents

$             146.0

$               88.4

Accounts receivable, net

77.9

81.3

Inventories, net

57.1

45.1

Derivative assets

6.5

13.4

Prepaid and other current assets

16.1

17.8

Total current assets

303.6

246.0

Investments in affiliated companies

349.3

440.2

Property, plant and equipment, net

569.3

576.9

Goodwill

404.1

404.5

Other intangible assets, net

98.4

116.6

Right-of-use lease assets

33.6

24.3

Other long-term assets

44.0

29.3

Total assets

$          1,802.3

$          1,837.8

LIABILITIES

Current maturities of long-term debt

$                 8.7

$                 9.0

Accounts payable

43.9

40.2

Operating lease liabilities—current

9.3

8.2

Accrued liabilities

53.2

61.7

Total current liabilities

115.1

119.1

Long-term debt, excluding current portion

852.1

858.9

Deferred income taxes

105.4

115.8

Operating lease liabilities—noncurrent

24.2

16.0

Other long-term liabilities

5.0

22.5

Total liabilities

1,101.8

1,132.3

Commitments and contingencies

EQUITY

Common stock ($0.01 par); authorized shares 450,000,000; issued shares 140,872,846 and 140,774,045
on December 31, 2024 and 2023, respectively; outstanding shares 116,534,803 and 116,116,895 on
December 31, 2024 and 2023, respectively

1.4

1.4

Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on
December 31, 2024 and 2023, respectively

—

—

Additional paid-in capital

1,106.8

1,102.6

Accumulated deficit

(177.5)

(170.9)

Treasury stock, at cost; shares 24,338,043 and 24,627,150 on December 31, 2024 and 2023, respectively

(222.8)

(226.7)

Accumulated other comprehensive loss

(7.4)

(0.9)

Total equity

700.5

705.5

Total liabilities and equity

$          1,802.3

$          1,837.8

ECOVYST INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31,

2024

2023

Cash flows from operating activities:

(in millions)

Net (loss) income

$               (6.7)

$               71.2

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation

75.3

70.6

Amortization

14.1

14.0

Intangible asset impairment charge

3.9

—

Amortization of deferred financing costs and original issue discount

1.7

2.1

Debt extinguishment costs

0.1

—

Foreign currency exchange loss (gain)

0.3

(0.6)

Deferred income tax benefit

(7.9)

(17.1)

Net loss on asset disposals

2.4

4.1

Stock compensation

14.0

16.0

Equity in net (income) from affiliated companies

(15.1)

(30.6)

Dividends received from affiliated companies

38.0

28.0

Impairment of investment in affiliated companies

65.0

—

Other, net

(14.3)

0.6

Working capital changes that provided (used) cash:

Receivables

3.1

(6.1)

Inventories

(11.2)

(1.4)

Prepaids and other current assets

3.4

(1.0)

Accounts payable

2.4

2.4

Accrued liabilities

(18.6)

(14.6)

Net cash provided by operating activities

149.9

137.6

Cash flows from investing activities:

Purchases of property, plant and equipment

(69.0)

(65.3)

Investment in non-marketable equity securities

(4.5)

—

Net cash used in investing activities

(73.5)

(65.3)

Cash flows from financing activities:

Draw down of revolving credit facilities

—

14.5

Repayments of revolving credit facilities

—

(14.5)

Issuance of long-term debt, net of original issue discount and financing fees

870.8

—

Repayments of long-term debt

(879.7)

(9.0)

Repurchases of common shares

(5.0)

(78.7)

Tax withholdings on equity award vesting

(1.2)

(3.4)

Repayments of financing obligation

(3.0)

(2.8)

Other, net

0.2

0.4

Net cash used in financing activities

(17.9)

(93.5)

Effect of exchange rate changes on cash and cash equivalents

(0.9)

(1.3)

Net change in cash and cash equivalents

57.6

(22.5)

Cash and cash equivalents at beginning of period

88.4

110.9

Cash and cash equivalents at end of period

$             146.0

$               88.4

Appendix Table A-1: Reconciliation of Net (Loss) Income to Adjusted EBITDA

Three months ended

December 31,

Years ended

December 31,

2024

2023

2024

2023

(in millions)

Reconciliation of net (loss) income to Adjusted EBITDA

Net (loss) income

$         (30.5)

$           30.0

$           (6.7)

$           71.2

(Benefit) provision for income taxes

(7.2)

(6.8)

1.6

10.8

Interest expense, net

11.8

13.9

49.4

44.7

Depreciation and amortization

22.6

22.1

89.4

84.6

EBITDA

(3.3)

59.2

133.7

211.3

Joint venture depreciation, amortization and interest^(a)

3.2

3.3

13.3

13.4

Amortization of investment in affiliate step-up^(b)

0.6

1.6

3.8

6.4

Impairment of investment in affiliated companies^(c)

65.0

—

65.0

—

Intangible asset impairment charge

3.9

—

3.9

—

Debt extinguishment costs

—

—

4.6

—

Net loss on asset disposals^(d)

1.6

0.8

2.4

4.1

Foreign currency exchange gain^(e)

(0.3)

(0.9)

(0.2)

(1.3)

LIFO expense (benefit)^(f)

1.0

1.0

(2.2)

3.5

Transaction and other related costs^(g)

0.2

0.2

0.4

3.0

Equity-based compensation

3.5

3.4

14.0

16.0

Restructuring, integration and business optimization expenses^(h)

0.1

0.3

1.0

2.7

Other⁽ⁱ⁾

0.4

0.9

(1.5)

0.8

Adjusted EBITDA

$           75.9

$           69.8

$         238.2

$         259.9

Descriptions to Ecovyst Non-GAAP Reconciliations

^(a) 

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

^(b) 

Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016. We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of the Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with intangible assets, including customer relationships and technical know-how.

^(c) 

Represents fair value impairments associated with the equity affiliate investment in the Zeolyst Joint Venture. During the year ended December 31, 2024, we recognized an impairment charge on our investment in the Zeolyst Joint Venture to reduce the carrying value of our investment to its estimated fair value. This impairment was a partial reduction to the goodwill and trade name components of the purchase accounting fair value adjustments recorded as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016.

^(d) 

When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use.

^(e) 

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

^(f) 

Represents non-cash adjustments to the Company's LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, effectively reflecting the results as if these inventories were valued using the FIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.

^(g) 

Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations.

^(h)

Includes the impact of restructuring, integration and business optimization expenses, which are incremental costs that are not representative of our ongoing business operations.

⁽ⁱ⁾ 

Other consists of adjustments for items that are not core to our ongoing business operations. These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen. Also included in this amount are adjustments to eliminate the benefit realized in cost of goods sold of the allocation of a portion of the contract manufacturing payments under the five-year agreement with the buyer of the Performance Chemicals business to the financing obligation under the failed sale-leaseback. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions).

Appendix Table A-2: Reconciliation of Net (Loss) Income and EPS to Adjusted Net Income and Adjusted EPS⁽¹⁾

Three months ended December 31,

2024

2023

Pre-tax

Tax
expense
(benefit)

After-
tax

Per share,
basic

Per share,
diluted

Pre-tax

Tax
expense
(benefit)

After-
tax

Per share,
basic

Per share,
diluted

(in millions, except share and per share amounts)

Net (loss) income

$  (37.7)

$    (7.2)

$  (30.5)

$       (0.26)

$       (0.26)

$   23.2

$    (6.8)

$    30.0

$         0.26

$         0.26

Amortization of investment in affiliate step-up^(b)

0.6

0.1

0.5

—

—

1.6

0.3

1.3

0.01

0.01

Impairment of investment in affiliated companies^(c)

65.0

0.5

64.5

0.55

0.55

—

—

—

—

—

Intangible asset impairment charge

3.9

1.0

2.9

0.02

0.02

—

—

—

—

—

Net loss on asset disposals^(d)

1.6

0.5

1.1

0.01

0.01

0.8

0.1

0.7

0.01

0.01

Foreign currency exchange gain^(e)

(0.3)

(0.1)

(0.2)

—

—

(0.9)

(0.2)

(0.7)

(0.01)

(0.01)

LIFO expense^(f)

1.0

0.2

0.8

0.01

0.01

1.0

0.2

0.8

0.01

0.01

Transaction and other related costs^(g)

0.2

—

0.2

—

—

0.2

—

0.2

—

—

Equity-based compensation

3.5

0.8

2.7

0.02

0.02

3.4

0.3

3.1

0.03

0.03

Restructuring, integration and business optimization expenses^(h)

0.1

—

0.1

—

—

0.3

0.1

0.2

—

—

Other⁽ⁱ⁾

0.4

0.1

0.3

0.01

0.01

0.9

0.2

0.7

—

—

Adjusted Net Income, including impact of valuation allowance release

and changes in uncertain tax positions release

38.3

(4.1)

42.4

0.36

0.36

30.5

(5.8)

36.3

0.31

0.31

Impact of valuation allowance release⁽²⁾

—

—

—

—

—

—

10.2

(10.2)

(0.09)

(0.09)

Changes in uncertain tax positions release⁽³⁾

—

9.4

(9.4)

(0.08)

(0.08)

—

—

—

—

—

Adjusted Net Income⁽¹⁾

$   38.3

$      5.3

$    33.0

$         0.28

$         0.28

$   30.5

$      4.4

$    26.1

$         0.22

$         0.22

Weighted average shares outstanding

116,518,933

117,515,453

116,116,895

117,190,747

Years ended December 31,

2024

2023

Pre-tax

Tax
expense
(benefit)

After-
tax

Per share,
basic

Per share,
diluted

Pre-tax

Tax
expense
(benefit)

After-
tax

Per share,
basic

Per share,
diluted

(in millions, except share and per share amounts)

Net (loss) income

$    (5.1)

$      1.6

$    (6.7)

$       (0.06)

$       (0.06)

$   82.0

$    10.8

$    71.2

$         0.60

$         0.60

Amortization of investment in affiliate step-up^(b)

3.8

1.0

2.8

0.02

0.02

6.4

1.6

4.8

0.04

0.04

Impairment of investment in affiliated companies^(c)

65.0

0.5

64.5

0.55

0.55

—

—

—

—

—

Intangible asset impairment charge

3.9

1.0

2.9

0.02

0.02

—

—

—

—

—

Debt extinguishment costs

4.6

1.2

3.4

0.03

0.03

—

—

—

—

—

Net loss on asset disposals^(d)

2.4

0.6

1.8

0.02

0.01

4.1

1.0

3.1

0.03

0.03

Foreign currency exchange gain^(e)

(0.2)

(0.1)

(0.1)

—

—

(1.3)

(0.3)

(1.0)

(0.01)

(0.01)

LIFO (benefit) expense^(f)

(2.2)

(0.6)

(1.6)

(0.01)

(0.01)

3.5

0.9

2.6

0.02

0.02

Transaction and other related costs^(g)

0.4

0.1

0.3

—

—

3.0

0.8

2.2

0.02

0.02

Equity-based compensation

14.0

3.0

11.0

0.09

0.09

16.0

1.5

14.5

0.12

0.12

Restructuring, integration and business optimization expenses^(h)

1.0

0.3

0.7

0.01

0.01

2.7

0.7

2.0

0.02

0.02

Other⁽ⁱ⁾

(1.5)

(0.5)

(1.0)

—

—

0.8

0.2

0.6

0.01

—

Adjusted Net Income, including impact of valuation allowance release

and changes in uncertain tax positions release

86.1

8.1

78.0

0.67

0.66

117.2

17.2

100.0

0.85

0.84

Impact of valuation allowance release⁽²⁾

—

—

—

—

—

—

10.2

(10.2)

(0.09)

(0.09)

Changes in uncertain tax positions release⁽³⁾

—

9.4

(9.4)

(0.08)

(0.08)

—

—

—

—

—

Adjusted Net Income⁽¹⁾

$   86.1

$    17.5

$    68.6

$         0.59

$         0.58

$  117.2

$    27.4

$    89.8

$         0.76

$         0.75

Weighted average shares outstanding

116,719,437

117,447,438

118,367,214

119,487,709

See Appendix Table A-1 for Descriptions to Ecovyst Non-GAAP Reconciliations in the table above.

⁽¹⁾   

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

⁽²⁾   

Represents the tax impact of the state tax credit valuation allowance release. Item is not expected to be recurring.

⁽³⁾   

Represents the tax impact of previously net unrecognized tax benefits, excluding interest and penalties, primarily due to the expiration of statutes of limitations.

Appendix Table A-3: Sales and Adjusted EBITDA by Business Segment

Three months ended

December 31,

Years ended

December 31,

2024

2023

% Change

2024

2023

% Change

Sales:

Ecoservices

$   148.9

$   141.4

5.3 %

$   598.3

$   584.8

2.3 %

Advanced Materials & Catalysts⁽¹⁾

33.1

31.4

5.4 %

106.2

106.3

(0.1) %

Total sales

$   182.0

$   172.8

5.3 %

$   704.5

$   691.1

1.9 %

Zeolyst Joint Venture sales

$      33.1

$      52.8

(37.3) %

$   116.5

$   156.5

(25.6) %

Adjusted EBITDA:

Ecoservices

$      54.0

$      48.4

11.6 %

$   200.3

$   200.0

0.2 %

Advanced Materials & Catalysts

27.9

27.2

2.6 %

64.7

81.9

(21.0) %

Unallocated corporate expenses

(6.0)

(5.8)

3.4 %

(26.8)

(22.0)

21.8 %

Total Adjusted EBITDA

$      75.9

$      69.8

8.7 %

$   238.2

$   259.9

(8.3) %

Adjusted EBITDA Margin:

Ecoservices

36.3 %

34.2 %

33.5 %

34.2 %

Advanced Materials & Catalysts⁽²⁾

42.1 %

32.3 %

29.1 %

31.2 %

Total Adjusted EBITDA Margin⁽²⁾

35.3 %

30.9 %

29.0 %

30.7 %

⁽¹⁾         

Represents GAAP sales for the Advanced Silicas business; Excludes our proportionate 50% share of sales from the Zeolyst Joint Venture.

⁽²⁾         

Adjusted EBITDA Margin calculation reflects our proportionate 50% share of sales from the Zeolyst Joint Venture.

Appendix Table A-4: Adjusted Free Cash Flow

Years ended December 31,

2024

2023

(in millions)

Net cash provided by operating activities

$      149.9

$      137.6

Less:

Purchases of property, plant and equipment⁽¹⁾

(69.0)

(65.3)

Free Cash Flow⁽²⁾

$         80.9

$         72.3

Adjustments to Free Cash Flow:

Cash paid for debt financing costs included in cash from operating activities

4.6

—

Adjusted Free Cash Flow⁽²⁾

$         85.5

$         72.3

Net cash used in investing activities⁽³⁾  

$       (73.5)

$       (65.3)

Net cash used in financing activities

$       (17.9)

$       (93.5)

⁽¹⁾

Excludes the Company's proportionate 50% share of capital expenditures from the Zeolyst Joint Venture.

⁽²⁾ 

We define Adjusted Free Cash Flow as net cash provided by operating activities less purchases of property, plant and equipment, adjusted for cash flows that are unusual in nature and/or infrequent in occurrence that neither relate to our core business nor reflect the liquidity of our underlying business. Historically these adjustments include proceeds from the sale of assets, net interest proceeds on swaps designated as net investment hedges, the cash paid for segment disposals and cash paid for debt financing costs included in cash from operating activities. Adjusted Free Cash Flow is a non-GAAP financial measure that we believe will enhance a prospective investor's understanding of our ability to generate additional cash from operations, and is an important financial measure for use in evaluating our financial performance. Our presentation of Adjusted Free Cash Flow is not intended to replace, and should not be considered superior to, the presentation of our net cash provided by operating activities determined in accordance with GAAP. Additionally, our definition of Adjusted Free Cash Flow is limited, in that it does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, we believe it is important to view Adjusted Free Cash Flow as a measure that provides supplemental information to our consolidated statements of cash flows. You should not consider Adjusted Free Cash Flow in isolation or as an alternative to the presentation of our financial results in accordance with GAAP. The presentation of Adjusted Free Cash Flow may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures.

⁽³⁾ 

Net cash used in investing activities includes purchases of property, plant and equipment, which is also included in our computation of Adjusted Free Cash Flow.

Appendix Table A-5: Net Debt Leverage Ratio

December 31,

2024

2023

(in millions, except ratios)

Total debt

$             870.8

$             877.5

Less:

Cash and cash equivalents

146.0

88.4

Net debt

$             724.8

$             789.1

Net (loss) income

$                (6.7)

$                71.2

Adjusted EBITDA⁽¹⁾

$             238.2

$             259.9

Net Debt to Net Income Ratio

NM

                  11.1x

Net Debt Leverage Ratio

                    3.0x

                    3.0x

⁽¹⁾   

Refer to Appendix Table A-1: Reconciliation of Net Income to Adjusted EBITDA for the reconciliation to the most comparable GAAP financial measure.