SEC Form 10-Q filed by Ecovyst Inc.

5/2/25 4:00:47 PM ET

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ecvt-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38221

Ecovyst Inc.

Delaware

81-3406833

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

600 Lee Road, Suite 200

Wayne, Pennsylvania

19087

(Address of principal executive offices)

(Zip Code)

(484)

617-1200

(Registrant’s telephone number, including area code)

300 Lindenwood Drive, Malvern, Pennsylvania

(Former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common stock, par value $0.01 per share

ECVT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding as of April 25, 2025 was 117,400,510.


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of (Loss) Income	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income	5
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 5.	Other Information	42
Item 6.	Exhibits	43

	SIGNATURES	44


	Three months ended March 31,
	2025		2024
Sales	$	162,197	$	160,537
Cost of goods sold	136,582		121,314
Gross profit	25,615		39,223
Selling, general and administrative expenses	21,345		21,604
Other operating expense, net	5,182		3,666
Operating (loss) income	(912)		13,953
Equity in net (income) from affiliated companies	(8,916)		(2,072)
Interest expense, net	11,010		13,409
Debt modification and extinguishment costs	960		—
Other expense, net	183		216
(Loss) income before income taxes	(4,149)		2,400
(Benefit) provision for income taxes	(552)		1,179
Net (loss) income	$	(3,597)	$	1,221

Net (loss) income per share:
Basic (loss) income per share	$	(0.03)	$	0.01
Diluted (loss) income per share	$	(0.03)	$	0.01

Weighted average shares outstanding:
Basic	117,264,124		116,955,043
Diluted	117,264,124		117,451,149


	March 31, 2025		December 31, 2024
ASSETS
Cash and cash equivalents	$	127,478	$	146,013
Accounts receivable, net	76,940		77,937
Inventories, net	58,788		57,126
Derivative assets	5,109		6,532
Prepaid and other current assets	23,648		16,106
Total current assets	291,963		303,714
Investments in affiliated companies	350,511		349,308
Property, plant and equipment, net	571,051		569,275
Goodwill	404,910		404,102
Other intangible assets, net	95,243		98,413
Right-of-use lease assets	33,570		33,558
Other long-term assets	39,674		43,951
Total assets	$	1,786,922	$	1,802,321
LIABILITIES
Current maturities of long-term debt	$	8,730	$	8,730
Accounts payable	34,527		43,928
Operating lease liabilities—current	8,753		9,267
Accrued liabilities	52,023		53,201
Total current liabilities	104,033		115,126
Long-term debt, excluding current portion	850,261		852,099
Deferred income taxes	104,743		105,395
Operating lease liabilities—noncurrent	24,689		24,189
Other long-term liabilities	4,512		5,052
Total liabilities	1,088,238		1,101,861
Commitments and contingencies (Note 14)
EQUITY
Common stock ($0.01 par); authorized shares 450,000,000; issued shares 140,872,846 and 140,872,846 on March 31, 2025 and December 31, 2024, respectively; outstanding shares 117,385,510 and 116,534,803 on March 31, 2025 and December 31, 2024, respectively	1,409		1,409
Preferred stock ($0.01 par); authorized shares 50,000,000; no shares issued or outstanding on March 31, 2025 and December 31, 2024	—		—
Additional paid-in capital	1,100,345		1,106,792
Accumulated deficit	(181,105)		(177,508)
Treasury stock, at cost; shares 23,487,336 and 24,338,043 on March 31, 2025 and December 31, 2024, respectively	(214,784)		(222,826)
Accumulated other comprehensive loss	(7,181)		(7,407)
Total equity	698,684		700,460
Total liabilities and equity	$	1,786,922	$	1,802,321


	Common stock		Additional paid-in capital		Accumulated deficit		Treasury stock, at cost		Accumulated other comprehensive loss		Total
Balance, December 31, 2024	$	1,409	$	1,106,792	$	(177,508)	$	(222,826)	$	(7,407)	$	700,460
Net loss	—		—		(3,597)		—		—		(3,597)
Other comprehensive income	—		—		—		—		226		226

Tax withholdings on equity award vesting	—		—		—		(1,477)		—		(1,477)
Stock compensation expense	—		3,072		—		—		—		3,072
Shares issued under equity incentive plan, net of forfeitures	—		(9,519)		—		9,519		—		—
Balance, March 31, 2025	$	1,409	$	1,100,345	$	(181,105)	$	(214,784)	$	(7,181)	$	698,684
















	Common stock		Additional paid-in capital		Accumulated deficit		Treasury stock, at cost		Accumulated other comprehensive (loss) income		Total
Balance, December 31, 2023	$	1,407	$	1,102,581	$	(170,856)	$	(226,710)	$	(958)	$	705,464
Net income	—		—		1,221		—		—		1,221
Other comprehensive income	—		—		—		—		2,174		2,174

Tax withholdings on equity award vesting	—		—		—		(1,218)		—		(1,218)
Stock compensation expense	—		3,674		—		—		—		3,674
Shares issued under equity incentive plan, net of forfeitures	2		(9,290)		—		9,329		—		41
Balance, March 31, 2024	$	1,409	$	1,096,965	$	(169,635)	$	(218,599)	$	1,216	$	711,356


Key End Uses			Key Products
Clean fuels, emission control & other			• Refining hydrocracking catalysts
			• Emission control catalysts
			• Catalyst supports used in production of sustainable fuels such as renewable diesel
			• Catalysts used in production of sustainable aviation fuels
			• Catalyst activation
			• Aluminum sulfate solution
			• Ammonium bisulfite solution
Polyethylene, polymers & engineered plastics			• Catalysts and catalyst supports for high-density polyethylene and chemicals synthesis
			• Antiblock for film packaging
			• Catalysts for advanced recycling
Regeneration and treatment services			• Sulfuric acid regeneration services
			• Hazardous waste treatment services
Industrial, mining & automotive			• Virgin sulfuric acid for mining
			• Virgin sulfuric acid derivatives for industrial production
			• Virgin sulfuric acid derivatives for nylon production


	Three months ended March 31, 2025
	Ecoservices		Advanced Materials & Catalysts(2)		Total
Clean fuels, emission control & other	$	7,983	$	—	$	7,983
Polyethylene, polymers & engineered plastics	—		19,088		19,088
Regeneration and treatment services(1)	79,247		—		79,247
Industrial, mining & automotive	55,879		—		55,879
Total segment sales	$	143,109	$	19,088	$	162,197

	Three months ended March 31, 2024
	Ecoservices		Advanced Materials & Catalysts(2)		Total
Clean fuels, emission control & other	$	7,389	$	—	$	7,389
Polyethylene, polymers & engineered plastics	—		18,935		18,935
Regeneration and treatment services(1)	83,319		—		83,319
Industrial, mining & automotive	50,894		—		50,894
Total segment sales	$	141,602	$	18,935	$	160,537


	March 31, 2025		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative assets:
Interest rate caps (Note 11)	$	7,094	$	—	$	7,094	$	—
Derivative liabilities:
Interest rate caps (Note 11)	$	1,169	$	—	$	1,169	$	—













	Three months ended March 31,
	2025						2024
	Pre-tax amount		Tax benefit/ (expense)		After-tax amount		Pre-tax amount		Tax benefit/ (expense)		After-tax amount
Defined benefit and other postretirement plans:
Net loss	$	(1)	$	—	$	(1)	$	(1)	$	—	$	(1)
Net prior service cost	—		—		—		(7)		2		(5)
Benefit plans, net	(1)		—		(1)		(8)		2		(6)
Net (loss) gain from hedging activities	(5,738)		1,434		(4,304)		5,152		(1,288)		3,864
Foreign currency translation	4,531		—		4,531		(1,684)		—		(1,684)
Other comprehensive income	$	(1,208)	$	1,434	$	226	$	3,460	$	(1,286)	$	2,174


	Defined benefit and other postretirement plans		Net gain (loss) from hedging activities		Foreign currency translation		Total
December 31, 2024	$	1,467	$	9,902	$	(18,776)	$	(7,407)
Other comprehensive (loss) income before reclassifications	—		(2,699)		4,531		1,832
Amounts reclassified from AOCI(1)	(1)		(1,605)		—		(1,606)
Net current period other comprehensive (loss) income	(1)		(4,304)		4,531		226
March 31, 2025	$	1,466	$	5,598	$	(14,245)	$	(7,181)

December 31, 2023	$	612	$	12,546	$	(14,116)	$	(958)
Other comprehensive income (loss) before reclassifications	—		7,356		(1,684)		5,672
Amounts reclassified from AOCI(1)	(6)		(3,492)		—		(3,498)
Net current period other comprehensive (loss) income	(6)		3,864		(1,684)		2,174
March 31, 2024	$	606	$	16,410	$	(15,800)	$	1,216


Details about AOCI Components		Amounts reclassified from AOCI(1)				Affected line item where income is presented
	Three months ended March 31,
		2025		2024
Amortization of defined benefit and other postretirement items:
Net loss		$	1	$	1	Other (expense) income(2)
Net prior service cost		—		7		Other (expense) income(2)
		1		8		Total before tax
		—		(2)		Tax benefit (expense)
		$	1	$	6	Net of tax

Gains and losses on cash flow hedges:
Interest rate caps		$	2,140	$	4,656	Interest expense
		(535)		(1,164)		Tax expense
		$	1,605	$	3,492	Net of tax

Total reclassifications for the period		$	1,606	$	3,498	Net of tax


	March 31, 2025		December 31, 2024
Finished products and work in process	$	54,964	$	54,124
Raw materials	3,824		3,002
Total inventories, net	$	58,788	$	57,126

Valued at lower of cost or market:
LIFO basis	$	35,235	$	31,650
Valued at lower of cost and net realizable value:
FIFO or average cost basis	23,553		25,476
Total inventories, net	$	58,788	$	57,126


Financial instrument	Number of instruments	In effect as of March 31, 2025	Current notional amount of instruments in effect		Annuitized premium of instruments in effect		Cap rate in effect for all agreements at March 31, 2025
Interest rate caps	4	3	$	625,000	$	35,285	1.00	%


	Ecoservices		Advanced Materials & Catalysts		Total
Balance as of December 31, 2024	$	326,589	$	77,513	$	404,102


Foreign exchange impact	—		808		808
Balance as of March 31, 2025	$	326,589	$	78,321	$	404,910


	March 31, 2025		December 31, 2024
2025 Term Loan Facility	$	868,636	$	870,817
ABL Facility	—		—
Total debt	868,636		870,817
Original issue discount	(6,968)		(7,201)
Deferred financing costs	(2,677)		(2,787)
Total debt, net of original issue discount and deferred financing costs	858,991		860,829
Less: current portion	(8,730)		(8,730)
Total long-term debt, excluding current portion	$	850,261	$	852,099


	Balance sheet location	March 31, 2025		December 31, 2024
Derivative assets
Derivatives designated as cash flow hedges:
Interest rate caps	Prepaid and other current assets	$	5,109	$	6,532
Interest rate caps	Other long-term assets	1,985		5,968
Total derivative assets		$	7,094	$	12,500

Derivative liabilities
Derivatives designated as cash flow hedges:
Interest rate caps	Accrued liabilities	$	498	$	235
Interest rate caps	Other long-term liabilities	671		475
Total derivative liabilities		$	1,169	$	710


		Amount of (loss) gain recognized in OCI
	Three months ended March 31,
		2025		2024
Interest rate caps		$	(3,598)	$	9,808

		Amount of (loss) gain reclassified from AOCI
	Three months ended March 31,
		2025		2024
Interest rate caps		$	(2,140)	$	(4,656)

		Amount of loss reclassified into income
	Three months ended March 31,
		2025		2024
Interest rate caps		$	2,140	$	4,656


Expected dividend yield	—	%
Risk-free interest rate	4.19	%
Expected volatility	40.39	%
Expected term (in years)	2.90


	Restricted Stock Units			Performance Stock Units
	Number of units	Weighted average grant date fair value (per share)		Number of units		Weighted average grant date fair value (per share)
Nonvested as of December 31, 2024	1,977,373	$	9.37	1,353,409	(1)	$	11.10
Granted	967,683	$	7.79	504,931		$	9.30
Vested	(1,040,153)	$	9.53	—		$	—
Forfeited	(48,303)	$	9.52	(163,819)		$	9.18
Nonvested as of March 31, 2025	1,856,600	$	8.46	1,694,521	(1)	$	10.75


	Three months ended March 31,						Change
	2025			2024			$		%
	(in millions, except percentages)
Sales	$	162.2		$	160.5		$	1.7	1.1	%
Cost of goods sold	136.6			121.3			15.3		12.6	%
Gross profit	25.6			39.2			(13.6)		(34.7)	%
Gross profit margin	15.8		%	24.4		%
Selling, general and administrative expenses	21.3			21.6			(0.3)		(1.4)	%
Other operating expense, net	5.2			3.7			1.5		40.5	%
Operating (loss) income	(0.9)			13.9			(14.8)		(106.5)	%
Operating (loss) income margin	(0.6)		%	8.7		%
Equity in net (income) from affiliated companies	(8.9)			(2.1)			(6.8)		323.8	%
Interest expense, net	11.0			13.4			(2.4)		(17.9)	%
Debt modification and extinguishment costs	1.0			—			1.0		NM
Other expense, net	0.2			0.2			—		—	%
(Loss) income before income taxes	(4.2)			2.4			(6.6)		(275.0)	%
(Benefit) provision for income taxes	(0.6)			1.2			(1.8)		(150.0)	%
Effective tax rate	13.3		%	49.1		%
Net (loss) income	$	(3.6)		$	1.2		$	(4.8)	NM


	March 31, 2025		December 31, 2024
	(in millions)
2025 Term Loan Facility	$	868.6	$	870.8
ABL Facility	—		—
Total debt	868.6		870.8
Original issue discount	(7.0)		(7.2)
Deferred financing costs	(2.7)		(2.8)
Total debt, net of original issue discount and deferred financing costs	858.9		860.8
Less: current portion	(8.7)		(8.7)
Total long-term debt, excluding current portion	$	850.2	$	852.1


Exhibit No.			Description
10.1			Third Amendment Agreement, dated as of January 30, 2025, by and among the Borrowers, Ecovyst Midco II Inc., UBS AG, Stamford Branch, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 31, 2025).
10.2			Fifth Amendment Agreement, dated as of April 10, 2025 to the ABL Credit Agreement, dated as of May 4, 2016, by and among Ecovyst Catalyst Technologies LLC, Ecovyst Catalyst Technologies UK Limited, Ecovyst Midco II Inc., the guarantors party thereto, the replacement lenders party thereto and Citibank, N.A., as administrative agent and collateral agent.
31.1			Certification of Chief Executive Officer of Ecovyst Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of Chief Financial Officer of Ecovyst Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1			Certification of Chief Executive Officer of Ecovyst Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2			Certification of Chief Financial Officer of Ecovyst Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101			The following materials from the Quarterly Report on Form 10-Q of Ecovyst Inc. for the quarter ended March 31, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Statements of (Loss) Income, (ii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information, tagged as blocks of text and including detailed tags
104			The cover page from the Quarterly Report on Form 10-Q of Ecovyst Inc. for the quarter ended March 31, 2025, formatted in Inline XBRL and included as Exhibit 101


			Ecovyst Inc.

Date:	May 2, 2025	By:	/s/ MICHAEL FEEHAN
			Michael Feehan
			Vice President and Chief Financial Officer
			(Duly Authorized Officer and Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Ecovyst Inc.

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