Ascent Finishes the Year with Strong Earnings Growth, a Healthy Cash Balance, Debt Free, and Nearly $15 Million of Free Cash Flow Generated in 2024

Ascent Industries Co. (NASDAQ:ACNT) ("Ascent" or the "Company"), an industrial 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, 2024.

Fourth Quarter 2024 Summary¹
(in millions, except per share and margin)	Q4 2024	Q4 2023	Change
Net Sales	$40.7	$41.2	(1.3)%
Gross Profit	$7.3	$(2.1)	438.4%
Gross Profit Margin	17.9%	(5.2)%	2310 bps
Net Income (Loss)	$0.1	$(7.5)	101.1%
Diluted Earnings (Loss) per Share	$0.01	$(0.73)	101.4%
Adjusted EBITDA	$2.6	$(5.9)	143.2%
Adjusted EBITDA Margin	6.3%	(14.4)%	2070 bps

Full Year 2024 Summary¹
(in millions, except per share and margin)	2024	2023	Change
Net Sales	$177.9	$193.2	(7.9)%
Gross Profit	$22.1	$1.5	1349.3%
Gross Profit Margin	12.4%	0.8%	1160 bps
Net (Loss)	$(11.2)	$(34.2)	67.1%
Diluted (Loss) per share	$(1.11)	$(3.37)	67.1%
Adjusted EBITDA	$4.0	$(15.9)	125.2%
Adjusted EBITDA Margin	2.3%	(8.2)%	1050 bps

____________________________

¹ 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 SPT have been categorized into discontinued operations.

Management Commentary

"We closed out the year generating strong earnings growth and our fourth consecutive quarter of adjusted EBITDA margin expansion, primarily driven by the strategic self-improvement initiatives we implemented at the beginning of the year," said Ascent CEO Bryan Kitchen. "As we expected, sales volume and overall demand in the fourth quarter remained muted across both segments. However, through aggressive cost management, product line optimization, and better operational efficiencies, we were still able to expand our gross margin on a lower sales base and deliver an improved bottom line.

"Overall, we're proud of the transformation efforts we've implemented and executed throughout 2024. Through the intentional recapitalization of SG&A combined with stabilizing the operations of both segments, we have established a stronger foundation to build off of in 2025. We are entering the new year with positive momentum on our side as we are seeing more favorable post-election market dynamics and a growing pipeline of opportunities that we believe can deliver organic growth in the coming quarters. We remain on track towards our goal of delivering a more predictable, reliable, and profitable business model that creates durable value for our shareholders."

Fourth Quarter 2024 Financial Results

Net sales from continuing operations were $40.7 million compared to $41.2 million in the fourth quarter of 2023. The slight decline was a result of lower volume with higher pricing within the specialty chemicals segment, along with higher volume but lower pricing within the tubular products segment.

Gross profit from continuing operations increased 438% to $7.3 million, or 17.9% of net sales, compared to $(2.1) million, or (5.2)% of net sales, in the fourth quarter of 2023. The increase was primarily driven by continued cost management, improved strategic sourcing, and product line optimization.

Net income from continuing operations improved to $0.1 million, or $0.01 diluted earnings per share, compared to a net loss from continuing operations of $7.5 million, or $0.73 diluted loss per share, in the fourth quarter of 2023.

Adjusted EBITDA increased significantly to $2.6 million compared to $(5.9) million in the fourth quarter of 2023, with adjusted EBITDA margin increasing to 6.3% compared to (14.4)% in the prior year period. The improvement was primarily driven by the aforementioned cost and product mix optimization initiatives.

Full Year 2024 Financial Results

Net sales from continuing operations were $177.9 million compared to $193.2 million in 2023. The decrease was primarily attributable to soft demand dynamics throughout much of the year across both segments.

Gross profit from continuing operations improved significantly to $22.1 million, or 12.4% of net sales, compared to $1.5 million or 0.8% of net sales in 2023. The increase in gross profit was primarily driven by cost reduction measures for labor and materials combined with product line optimization, which the Company implemented throughout 2024.

Net loss from continuing operations was $11.2 million, or $1.11 diluted loss per share, compared to a net loss from continuing operations of $34.2 million, or $3.37 diluted loss per share, in 2023. During the year, the Company recorded a $6.2 million non-cash, one-time tax charge related to a valuation allowance against the Company's deferred tax assets.

Adjusted EBITDA increased significantly to $4.0 million compared to $(15.9) million in 2023. Adjusted EBITDA as a percentage of net sales was 2.3% compared to (8.2)% in the prior year. The increase is primarily attributable to continued gains in operational efficiencies and the aforementioned cost and product mix optimization initiatives.

Segment Results

Ascent Chemicals – net sales in the fourth quarter of 2024 were $18.1 million compared to $18.5 million in the fourth quarter of 2023. Operating income in the fourth quarter improved significantly to $1.8 million compared to an operating loss of $1.6 million in the prior year period. Adjusted EBITDA in the fourth quarter increased significantly to $3.4 million compared to $(0.4) million in the prior year period. As a percentage of segment net sales, adjusted EBITDA increased significantly to 18.7% compared to (2.3)% in the fourth quarter of 2023.

Net sales in 2024 were $80.8 million compared to $83.6 million in 2023. Operating income in 2024 increased significantly to $1.1 million compared to an operating loss of $12.6 million in the prior year. Adjusted EBITDA in 2024 increased 85% to $6.3 million compared to $3.4 million in the prior year. As a percentage of segment net sales, adjusted EBITDA increased 370 basis points to 7.8% compared to 4.1% in 2023.

Ascent Tubular – net sales from continuing operations in the fourth quarter of 2024 were $22.5 million compared to $22.8 million in the fourth quarter of 2023. Operating income from continuing operations in the fourth quarter increased significantly to $1.6 million compared to an operating loss from continuing operations of $4.0 million in the prior year period. Adjusted EBITDA from continuing operations in the fourth quarter increased significantly to $2.3 million compared to $(3.1) million in the prior year period. As a percentage of segment net sales, adjusted EBITDA increased significantly to 10.2% compared to (13.7)% in the fourth quarter of 2023.

Net sales from continuing operations in 2024 were $97.1 million compared to $109.5 million in 2023. Operating income from continuing operations in 2024 increased significantly to $2.6 million compared to an operating loss of $11.2 million in the prior year. Adjusted EBITDA from continuing operations in 2024 increased significantly to $5.7 million compared to $(7.8) million in the prior year. As a percentage of segment net sales, adjusted EBITDA increased significantly to 5.8% compared to (7.1)% in 2023.

Liquidity

As of December 31, 2024, the Company had $16.1 million in cash and cash equivalents, no debt outstanding under its revolving credit facilities and had $47.4 million in availability under its revolving credit facility.

For the year ended December 31, 2024, the Company repurchased 101,263 shares at an average cost of $10.21 per share for approximately $1.0 million.

Conference Call

Ascent will hold a conference call today at 5:00 p.m. Eastern time to discuss its financial results for the fourth quarter and full year ended December 31, 2024.

Ascent management will host the conference call, followed by a question and answer period.

Date: Tuesday, March 4, 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 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, retention costs and restructuring & severance costs from net income (loss).

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, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	16,108		$	1,851
Accounts receivable, net of allowance for credit losses of $345 and $463, respectively		23,880			26,604
Inventories		40,962			52,306
Prepaid expenses and other current assets		2,075			4,879
Assets held for sale		—			2,912
Current assets of discontinued operations		46			861
Total current assets		83,071			89,413
Property, plant and equipment, net		25,462			29,755
Right-of-use assets, operating leases, net		28,225			27,784
Intangible assets, net		7,009			8,496
Deferred income taxes		—			5,808
Deferred charges, net		309			104
Other non-current assets, net		3,174			1,935
Total assets	$	147,250		$	163,295

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	13,072		$	16,416
Accrued expenses and other current liabilities		5,042			5,046
Deferred revenue		1,360			62
Current portion of note payable		369			360
Current portion of operating lease liabilities		1,513			1,140
Current portion of finance lease liabilities		334			292
Current liabilities of discontinued operations		590			1,473
Total current liabilities		22,280			24,789
Long-term portion of operating lease liabilities		30,039			29,729
Long-term portion of finance lease liabilities		1,015			1,307
Deferred income taxes		320			—
Other long-term liabilities		51			60
Total non-current liabilities		31,425			31,096
Total liabilities	$	53,705		$	55,885

Commitments and contingencies

Shareholders' equity:
Common stock, par value $1 per share; 24,000,000 shares authorized; 11,085,103 and 10,072,590 shares issued and outstanding, respectively	$	11,085		$	11,085
Capital in excess of par value		47,339			47,333
Retained earnings		44,919			58,517
		103,343			116,935
Less: cost of common stock in treasury - 1,012,513 and 990,282 shares, respectively		(9,798	)		(9,525	)
Total shareholders' equity		93,545			107,410
Total liabilities and shareholders' equity	$	147,250		$	163,295

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 December 31,						Year Ended December 31,
		2024			2023			2024			2023
Net sales
Tubular Products	$	22,549		$	22,765		$	97,108		$	109,513
Specialty Chemicals		18,122			18,451			80,764			83,616
All Other		—			—			—			50
		40,671			41,216			177,872			193,179
Operating income (loss) from continuing operations
Tubular Products		1,610			(3,995	)		2,650			(11,210	)
Specialty Chemicals		1,791			(1,623	)		1,166			(12,558	)
All Other		(49	)		(116	)		(427	)		(801	)

Corporate
Unallocated corporate expenses		(3,297	)		(2,704	)		(8,367	)		(12,018	)
Acquisition costs and other		(132	)		(569	)		(185	)		(843	)
Gain on lease modification		—			—			67			—
Total Corporate		(3,429	)		(3,273	)		(8,485	)		(12,861	)
Operating loss		(77	)		(9,007	)		(5,096	)		(37,430	)
Interest expense, net		95			1,021			418			4,238
Other, net		(145	)		(249	)		(448	)		(593	)
Loss from continuing operations before income taxes		(27	)		(9,779	)		(5,066	)		(41,075	)
Income tax (benefit) provision		(111	)		(2,244	)		6,159			(6,924	)
Income (loss) from continuing operations		84			(7,535	)		(11,225	)		(34,151	)
(Loss) income from discontinued operations, net of tax		(1,111	)		18,674			(2,373	)		7,522
Net (loss) income	$	(1,027	)	$	11,139		$	(13,598	)	$	(26,629	)

Net income (loss) per common share from continuing operations
Basic	$	0.01		$	(0.75	)	$	(1.11	)	$	(3.37	)
Diluted	$	0.01		$	(0.73	)	$	(1.11	)	$	(3.37	)

Net (loss) income per common share from discontinued operations
Basic	$	(0.11	)	$	1.85		$	(0.23	)	$	0.74
Diluted	$	(0.11	)	$	1.80		$	(0.23	)	$	0.74

Net (loss) income per common share
Basic	$	(0.10	)	$	1.10		$	(1.34	)	$	(2.63	)
Diluted	$	(0.10	)	$	1.07		$	(1.34	)	$	(2.63	)

Average shares outstanding
Basic		10,090			10,107			10,106			10,140
Diluted		10,337			10,374			10,106			10,140

Other data:
Adjusted EBITDA¹	$	2,567		$	(5,941	)	$	4,013		$	(15,934	)

¹The 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 ($ in thousands)
	Year Ended December 31,
		2024			2023
Operating activities
Net loss	$	(13,598	)	$	(26,629	)
(Loss) income from discontinued operations, net of tax		(2,373	)		7,522
Net loss from continuing operations		(11,225	)		(34,151	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense		5,936			6,161
Amortization expense		1,488			1,505
Amortization of debt issuance costs		105			99
Goodwill impairment		—			11,389
Deferred income taxes		6,159			(6,924	)
Reduction of losses on accounts receivable		(118	)		(180	)
Loss on disposal of property, plant and equipment		517			246
Non-cash lease expense		198			242
Stock-based compensation expense		767			1,023
Changes in operating assets and liabilities:
Accounts receivable		2,842			6,778
Inventories		11,344			15,563
Other assets and liabilities		1,187			515
Accounts payable		(3,612	)		1,650
Accrued expenses		(66	)		(401	)
Accrued income taxes		1,485			3,129
Net cash provided by operating activities - continuing operations		17,007			6,644
Net cash (used in) provided by operating activities - discontinued operations		(2,326	)		16,434
Net cash provided by operating activities		14,681			23,078
Investing activities
Purchases of property, plant and equipment		(1,892	)		(2,885	)
Net cash used in investing activities - continuing operations		(1,892	)		(2,885	)
Net cash provided by investing activities - discontinued operations		2,797			53,386
Net cash provided by investing activities		905			50,501
Financing activities
Borrowings from credit facilities		197,898			256,606
Proceeds from note payable		914			900
Payments on credit facilities		(197,898	)		(328,155	)
Payments on note payable		(906	)		(928	)
Principal payments on finance lease obligations		(300	)		(305	)
Repurchase of common stock		(1,037	)		(1,287	)
Net cash used in financing activities		(1,329	)		(73,169	)
Increase in cash and cash equivalents		14,257			410
Cash and cash equivalents, beginning of period		1,851			1,441
Cash and cash equivalents, end of period	$	16,108		$	1,851

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)		2024			2023			2024			2023
Consolidated
Net income (loss) from continuing operations	$	84		$	(7,535	)	$	(11,225	)	$	(34,151	)
Adjustments:
Interest expense, net		95			1,021			418			4,238
Income taxes		(111	)		(2,244	)		6,159			(6,924	)
Depreciation		1,447			1,527			5,936			6,161
Amortization		372			376			1,487			1,505
EBITDA		1,887			(6,855	)		2,775			(29,171	)
Acquisition costs and other		608			579			692			856
Goodwill impairment		—			—			—			11,389
Gain on lease modification		—			—			(67	)		—
Stock-based compensation		45			224			204			594
Non-cash lease expense		27			52			198			242
Retention expense		—			20			3			26
Restructuring and severance costs		—			39			208			130
Adjusted EBITDA	$	2,567		$	(5,941	)	$	4,013		$	(15,934	)
% sales		6.3	%		(14.4	)%		2.3	%		(8.2	)%

Specialty Chemicals
Net income (loss)	$	1,775		$	(1,644	)	$	1,093		$	(12,619	)
Adjustments:
Interest expense		17			22			75			74
Depreciation expense		946			948			3,809			3,798
Amortization expense		174			158			695			634
EBITDA		2,912			(516	)		5,672			(8,113	)
Acquisition costs and other		477			10			477			12
Goodwill impairment		—			—			—			11,389
Stock-based compensation		—			21			7			8
Non-cash lease expense		9			19			66			88
Restructuring and severance costs		—			40			110			40
Specialty Chemicals Adjusted EBITDA	$	3,398		$	(426	)	$	6,332		$	3,424
% segment sales		18.7	%		(2.3	)%		7.8	%		4.1	%

Tubular Products
Net income (loss) from continuing operations	$	1,609		$	(3,995	)	$	2,649		$	(11,210	)
Adjustments:
Interest expense		1			—			1			—
Depreciation expense		485			557			2,052			2,274
Amortization expense		198			217			792			871
EBITDA		2,293			(3,221	)		5,494			(8,065	)
Acquisition costs and other		—			—			30			—
Stock-based compensation		—			74			10			58
Non-cash lease expense		13			25			88			118
Retention expense					8			—			8
Restructuring and severance costs		—			—			30			84
Tubular Products Adjusted EBITDA	$	2,306		$	(3,114	)	$	5,652		$	(7,797	)
% segment sales		10.2	%		(13.7	)%		5.8	%		(7.1	)%

View source version on businesswire.com: https://www.businesswire.com/news/home/20250304998451/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

Ascent Industries Reports Fourth Quarter and Full Year 2024 Results