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 first quarter ended March 31, 2025.
First Quarter 2025 Summary1 |
|||
(in millions, except per share and margin) |
Q1 2025 |
Q1 2024 |
Change |
Net Sales |
$24.7 |
$28.0 |
(11.8)% |
Gross Profit |
$4.8 |
$2.3 |
108.7% |
Gross Profit Margin |
19.4% |
8.2% |
1120bps |
Net Loss |
($1.0) |
$(5.5) |
(81.8)% |
Diluted Loss per Share |
($0.10) |
$(0.37) |
(73.0)% |
Adjusted EBITDA |
$0.8 |
$(2.7) |
+$3.5M |
Adjusted EBITDA Margin |
3.4% |
(9.6)% |
1300bps |
| ____________________________ |
1 On April 4, 2025, the Company closed on a transaction to sell substantially all of the assets of Bristol Metals, LLC ("BRISMET"). As a result, financial results from BRISMET have been categorized into discontinued operations. |
Management Commentary
"In Q1 2025, we built on our 2024 self‑help initiatives to double gross profit to $4.8 million and expand gross margin by 1,120 basis points to 19.4%, even as net sales held at $24.7 million," said Ascent CEO Bryan Kitchen. Despite muted demand, our disciplined focus on product-mix optimization, cost management and operational rigor drove Specialty Chemicals Adjusted EBITDA to $2.0 million from a $0.3 million loss and lifted Tubular Products Adjusted EBITDA to $1.3 million, pushing margins toward 20%.
"As we shift from stabilization to growth mode, our team's disciplined execution is already creating a robust pipeline of high-quality, organic growth opportunities. Although post‑election dynamics can provide additional tailwinds, it's our strengthened foundation, clear strategy, disciplined operating model and exceptional talent that will carry Ascent toward a predictable, reliable, and profitable business model delivering durable value for our shareholders.."
First Quarter 2025 Financial Results
Net sales from continuing operations were $24.7 million compared to $28.0 million in the first quarter of 2024. The decline was a result of lower volume within both segments partially offset by increased pricing with specialty chemicals.
Gross profit from continuing operations increased 108.7% to $4.8 million, or 19.4% of net sales, compared to $2.3 million, or 8.2% of net sales, in the first quarter of 2024. The increase was primarily driven by continued cost management, improved strategic sourcing, and continued product line optimization.
Net loss from continuing operations improved to ($1.0) million, or ($0.10) diluted loss per share compared to a net loss from continuing operations of ($5.5) million, or ($0.37) diluted loss per share, in the first quarter of 2024.
Adjusted EBITDA increased to $0.8 million compared to $(2.7) million in the first quarter of 2024, with adjusted EBITDA margin increasing to 3.4% compared to (9.6)% in the prior year period. The improvement was primarily driven by the aforementioned cost and product mix optimization initiatives.
Segment Results
Ascent Chemicals – net sales totaled $17.8 million, compared to $20.3 million in Q1 2024, reflecting a 12.3% decrease. This was the anticipated result of a purposeful shift in product mix that began in 2024, which focused on building a more rateable, predictable and profitable book of business. While this shift led to a decrease in volume, it was offset by higher average selling prices, driving improved profitability in line with our long-term margin enhancement goals. Operating income in the first quarter improved significantly to $0.8 million compared to an operating loss of ($1.4) million in the prior year period. Adjusted EBITDA in the first quarter increased significantly to $2.0 million compared to $(0.3) million in the prior year period. As a percentage of segment net sales, adjusted EBITDA increased significantly to 11.0% compared to (1.4)% in the first quarter of 2024.
Ascent Tubular – net sales from continuing operations in the first quarter of 2025 were $6.9 million compared to $7.7 million in the first quarter of 2024. Operating income from continuing operations in the first quarter increased significantly to $1.0 million compared to an operating loss from continuing operations of ($0.1) million in the prior year period, reflecting reductions in material and labor costs. Adjusted EBITDA from continuing operations in the first quarter increased significantly to $1.3 million compared to $0.3 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA increased significantly to 19.0% compared to 3.5% in the first quarter of 2024.
On April 4, 2025, the Company closed on the sale of substantially all of the assets of Bristol Metals, LLC. ("BRISMET") for a transaction price of $45 million in cash, subject to working capital and other closing adjustments. The sale of BRISMET leaves ASTI as the only remaining asset in the Tubular segment of Ascent.
Liquidity
As of March 31, 2025, the Company had $14.3 million in cash and cash equivalents, no debt outstanding under its revolving credit facilities and had $53.3 million in availability under its revolving credit facility. On April 4, 2025, the Company entered into an amended credit facility associated with the BRISMET transaction reducing its maximum revolving loan commitment. As of April 4, 2025, the Company had $18.8 million of remaining availability under it credit facility.
For the quarter ended March 31, 2025, the Company repurchased 16,822 shares at an average cost of $12.73 per share for approximately $0.2 million.
Conference Call
Ascent will hold a conference call today at 5:00 p.m. Eastern time to discuss its financial results for the first quarter ended March 31, 2025.
Ascent management will host the conference call, followed by a question-and-answer period.
Date: Monday, May 12, 2025
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 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 the production of specialty chemicals and stainless steel 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, 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) |
|
|
||||
|
March 31,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
14,272 |
|
|
$ |
16,098 |
|
Accounts receivable, net of allowance for credit losses of $1,169 and $427, respectively |
|
17,200 |
|
|
|
14,447 |
|
Inventories |
|
10,681 |
|
|
|
9,529 |
|
Prepaid expenses and other current assets |
|
1,975 |
|
|
|
1,453 |
|
Current assets of discontinued operations |
|
45,524 |
|
|
|
41,544 |
|
Total current assets |
|
89,652 |
|
|
|
83,071 |
|
Property, plant and equipment, net |
|
19,213 |
|
|
|
19,802 |
|
Right-of-use assets, operating leases, net |
|
27,813 |
|
|
|
28,225 |
|
Intangible assets, net |
|
6,678 |
|
|
|
7,009 |
|
Deferred charges, net |
|
297 |
|
|
|
309 |
|
Other non-current assets, net |
|
860 |
|
|
|
855 |
|
Long-term assets of discontinued operations |
|
8,029 |
|
|
|
7,979 |
|
Total assets |
$ |
152,542 |
|
|
$ |
147,250 |
|
|
|
|
|
||||
Liabilities and Shareholders' Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
8,989 |
|
|
$ |
7,290 |
|
Accrued expenses and other current liabilities |
|
6,344 |
|
|
|
3,828 |
|
Current portion of note payable |
|
97 |
|
|
|
369 |
|
Current portion of operating lease liabilities |
|
1,566 |
|
|
|
1,513 |
|
Current portion of finance lease liabilities |
|
330 |
|
|
|
334 |
|
Current liabilities of discontinued operations |
|
13,047 |
|
|
|
8,946 |
|
Total current liabilities |
|
30,373 |
|
|
|
22,280 |
|
Long-term portion of operating lease liabilities |
|
29,638 |
|
|
|
30,039 |
|
Long-term portion of finance lease liabilities |
|
939 |
|
|
|
1,015 |
|
Deferred income taxes |
|
386 |
|
|
|
320 |
|
Other long-term liabilities |
|
50 |
|
|
|
51 |
|
Total non-current liabilities |
|
31,013 |
|
|
|
31,425 |
|
Total liabilities |
$ |
61,386 |
|
|
$ |
53,705 |
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
||||
|
|
|
|
||||
Shareholders' equity: |
|
|
|
||||
Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,068,406 shares issued and outstanding, respectively |
$ |
11,085 |
|
|
$ |
11,085 |
|
Capital in excess of par value |
|
47,335 |
|
|
|
47,339 |
|
Retained earnings |
|
42,626 |
|
|
|
44,919 |
|
|
|
101,046 |
|
|
|
103,343 |
|
Less: cost of common stock in treasury - 1,016,697 and 1,012,513 shares, respectively |
|
(9,890 |
) |
|
|
(9,798 |
) |
Total shareholders' equity |
|
91,156 |
|
|
|
93,545 |
|
Total liabilities and shareholders' equity |
$ |
152,542 |
|
|
$ |
147,250 |
|
Note: The condensed consolidated balance sheets at December 31, 2024 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 March 31, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Net sales |
|
|
|
||||
Tubular Products |
$ |
6,897 |
|
|
$ |
7,656 |
|
Specialty Chemicals |
|
17,835 |
|
|
|
20,296 |
|
|
|
24,732 |
|
|
|
27,952 |
|
Operating income (loss) from continuing operations |
|
|
|||||
Tubular Products |
|
1,004 |
|
|
|
(54 |
) |
Specialty Chemicals |
|
754 |
|
|
|
(1,439 |
) |
All Other |
|
(795 |
) |
|
|
(160 |
) |
|
|
|
|
||||
Corporate |
|
|
|
||||
Unallocated corporate expenses |
|
(1,995 |
) |
|
|
(2,690 |
) |
Acquisition costs and other |
|
(3 |
) |
|
|
— |
|
Total Corporate |
|
(1,998 |
) |
|
|
(2,690 |
) |
Operating loss |
|
(1,035 |
) |
|
|
(4,343 |
) |
Interest expense, net |
|
115 |
|
|
|
127 |
|
Other, net |
|
(148 |
) |
|
|
(119 |
) |
Loss from continuing operations before income taxes |
|
(1,002 |
) |
|
|
(4,351 |
) |
Income tax benefit |
|
— |
|
|
|
(585 |
) |
Loss from continuing operations |
|
(1,002 |
) |
|
|
(3,766 |
) |
Loss from discontinued operations, net of tax |
|
(1,291 |
) |
|
|
(1,727 |
) |
Net loss |
$ |
(2,293 |
) |
|
$ |
(5,493 |
) |
|
|
|
|
||||
Net loss per common share from continuing operations |
|
|
|
||||
Basic |
$ |
(0.10 |
) |
|
$ |
(0.37 |
) |
Diluted |
$ |
(0.10 |
) |
|
$ |
(0.37 |
) |
|
|
|
|
||||
Net loss per common share from discontinued operations |
|
|
|
||||
Basic |
$ |
(0.13 |
) |
|
$ |
(0.17 |
) |
Diluted |
$ |
(0.13 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
||||
Net loss income per common share |
|
|
|
||||
Basic |
$ |
(0.23 |
) |
|
$ |
(0.54 |
) |
Diluted |
$ |
(0.23 |
) |
|
$ |
(0.54 |
) |
|
|
|
|
||||
Average shares outstanding |
|
|
|
||||
Basic |
|
10,076 |
|
|
|
10,094 |
|
Diluted |
|
10,076 |
|
|
|
10,094 |
|
|
|
|
|
||||
Other data: |
|
|
|
||||
Adjusted EBITDA1 |
$ |
844 |
|
|
$ |
(2,674 |
) |
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, 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) |
|||||||
|
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2025 |
|
|
|
2024 |
|
Operating activities |
|
|
|
||||
Net loss |
$ |
(2,293 |
) |
|
$ |
(5,493 |
) |
Loss from discontinued operations, net of tax |
|
(1,291 |
) |
|
|
(1,727 |
) |
Net loss from continuing operations |
|
(1,002 |
) |
|
|
(3,766 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation expense |
|
1,099 |
|
|
|
1,087 |
|
Amortization expense |
|
331 |
|
|
|
367 |
|
Amortization of debt issuance costs |
|
28 |
|
|
|
25 |
|
Deferred income taxes |
|
— |
|
|
|
(585 |
) |
(Reduction of) provision for losses on accounts receivable |
|
(384 |
) |
|
|
275 |
|
Non-cash lease expense |
|
29 |
|
|
|
40 |
|
Stock-based compensation expense |
|
118 |
|
|
|
204 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(2,369 |
) |
|
|
(1,964 |
) |
Inventories |
|
(1,151 |
) |
|
|
3,828 |
|
Other assets and liabilities |
|
(346 |
) |
|
|
(78 |
) |
Accounts payable |
|
1,495 |
|
|
|
1,193 |
|
Accrued expenses |
|
1,941 |
|
|
|
(121 |
) |
Accrued income taxes |
|
(51 |
) |
|
|
79 |
|
Net cash (used in) provided by operating activities - continuing operations |
|
(262 |
) |
|
|
584 |
|
Net cash used in operating activities - discontinued operations |
|
(438 |
) |
|
|
(321 |
) |
Net cash (used in) provided by operating activities |
|
(700 |
) |
|
|
263 |
|
Investing activities |
|
|
|
||||
Purchases of property, plant and equipment |
|
(322 |
) |
|
|
(238 |
) |
Net cash used in investing activities - continuing operations |
|
(322 |
) |
|
|
(238 |
) |
Net cash used in investing activities - discontinued operations |
|
(248 |
) |
|
|
(67 |
) |
Net cash used in investing activities |
|
(570 |
) |
|
|
(305 |
) |
Financing activities |
|
|
|
||||
Borrowings from credit facilities |
|
44,571 |
|
|
|
50,950 |
|
Payments on credit facilities |
|
(44,571 |
) |
|
|
(50,950 |
) |
Payments on note payable |
|
(271 |
) |
|
|
(271 |
) |
Principal payments on finance lease obligations |
|
(80 |
) |
|
|
(75 |
) |
Repurchase of common stock |
|
(215 |
) |
|
|
(163 |
) |
Net cash used in financing activities - continuing operations |
|
(566 |
) |
|
|
(509 |
) |
Net cash used in financing activities - discontinued operations |
|
— |
|
|
|
(1 |
) |
Net cash used in financing activities |
|
(566 |
) |
|
|
(510 |
) |
Decrease in cash and cash equivalents |
|
(1,836 |
) |
|
|
(552 |
) |
Less: Cash and cash equivalents of discontinued operations |
|
— |
|
|
|
10 |
|
Cash and cash equivalents, beginning of period |
|
16,108 |
|
|
|
1,841 |
|
Cash and cash equivalents, end of period |
$ |
14,272 |
|
|
$ |
1,299 |
|
Ascent Industries Co. |
|||||||
Non-GAAP Financial Measures Reconciliation |
|||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) |
|||||||
($ in thousands) |
|||||||
|
|||||||
|
Three Months Ended March 31, |
||||||
($ in thousands) |
|
2025 |
|
|
|
2024 |
|
Consolidated |
|
|
|
||||
Net loss from continuing operations |
$ |
(1,002 |
) |
|
$ |
(3,766 |
) |
Adjustments: |
|
|
|
||||
Interest expense, net |
|
115 |
|
|
|
127 |
|
Income taxes |
|
— |
|
|
|
(585 |
) |
Depreciation |
|
1,099 |
|
|
|
1,084 |
|
Amortization |
|
331 |
|
|
|
367 |
|
EBITDA |
|
543 |
|
|
|
(2,773 |
) |
Acquisition costs and other |
|
237 |
|
|
|
— |
|
Stock-based compensation |
|
35 |
|
|
|
55 |
|
Non-cash lease expense |
|
29 |
|
|
|
41 |
|
Retention expense |
|
— |
|
|
|
3 |
|
Adjusted EBITDA |
$ |
844 |
|
|
$ |
(2,674 |
) |
% sales |
|
3.4 |
% |
|
|
(9.6 |
)% |
Specialty Chemicals |
|
|
|
||||
Net income (loss) |
$ |
738 |
|
|
$ |
(1,458 |
) |
Adjustments: |
|
|
|
||||
Interest expense, net |
|
16 |
|
|
|
19 |
|
Depreciation |
|
962 |
|
|
|
954 |
|
Amortization |
|
153 |
|
|
|
169 |
|
EBITDA |
|
1,869 |
|
|
|
(316 |
) |
Acquisition costs and other |
|
92 |
|
|
|
— |
|
Stock-based compensation |
|
— |
|
|
|
7 |
|
Non-cash lease expense |
|
9 |
|
|
|
19 |
|
Specialty Chemicals Adjusted EBITDA |
$ |
1,970 |
|
|
$ |
(290 |
) |
% segment sales |
|
11.0 |
% |
|
|
(1.4 |
)% |
|
|
|
|
||||
Tubular Products |
|
|
|
||||
Net income (loss) from continuing operations |
$ |
1,004 |
|
|
$ |
(54 |
) |
Adjustments: |
|
|
|
||||
Interest expense, net |
|
1 |
|
|
|
— |
|
Depreciation |
|
121 |
|
|
|
109 |
|
Amortization |
|
178 |
|
|
|
198 |
|
EBITDA |
|
1,304 |
|
|
|
253 |
|
Stock-based compensation |
|
— |
|
|
|
5 |
|
Non-cash lease expense |
|
5 |
|
|
|
10 |
|
Tubular Products Adjusted EBITDA |
$ |
1,309 |
|
|
$ |
268 |
|
% segment sales |
|
19.0 |
% |
|
|
3.5 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250512905208/en/
Company Contact
Ryan Kavalauskas
Chief Financial Officer
1-630-884-9181
Investor Relations
Ralf Esper
Gateway Group, Inc.
1-949-574-3860
[email protected]