Minerals Technologies Inc: Form 10-Q for the period ended Sep 28, 2025

Executive Summary

Our consolidated sales for the third quarter of 2025 were $532.4 million, an increase of 1% as compared with $524.7 million in the prior year. Income from operations was $70.9 million, as compared with income of $76.6 million in the prior year. Included in income from operations for the third quarter of 2025 and 2024 was $7.5 million and $2.6 million, respectively of litigation expenses incurred in connection with the bankruptcy of BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) ("Oldco") and lawsuits related to talc products sold by Oldco.

Net income in the third quarter of 2025 was $43.0 million, as compared to income of $46.7 million in the third quarter of 2024. Diluted earnings in the third quarter of 2025 was $1.37 per share, as compared with earnings of $1.45 per share in the third quarter of 2024.

Our balance sheet continues to be strong. The Company repurchased $17 million in shares in the third quarter of 2025 under our $200 million buyback program. Cash, cash equivalents and short-term investments were $328.3 million as of September 28, 2025 and the Company had more than $700 million of available liquidity, including cash on hand as well as availability under its revolving credit facility. We believe that these factors will allow us to meet our anticipated funding requirements.

Outlook

Beginning in the first quarter of 2025, the United States government announced additional tariffs on goods imported into the U.S. from numerous countries and multiple nations have responded with reciprocal tariffs and other actions. Certain of the U.S. government’s announcements have been followed by announcements of limited exemptions and temporary pauses, and the U.S. government stated that it is willing to negotiate with other countries regarding the tariffs, all of which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. While the Company generally manufactures products in the markets where they are sold, the imposition of tariffs as well as uncertainty about their scope and duration could negatively affect demand, result in an increase in some input costs and/or inflation, or otherwise adversely affect economic conditions. The Company continues to monitor the economic effects of such announcements and is implementing plans to mitigate their related impacts, but the effects associated with the tariffs remain uncertain.

The Company will continue to focus on innovation and new product development and other opportunities for sales growth in 2025 from its existing businesses, as follows:

Consumer & Specialties Segment

Increase our presence and market share in global pet litter products, including in emerging markets.

Deploy new products in pet care such as lightweight litter.

Increase our sales of calcium carbonate products by further penetration into filling and coating applications in the paper and packaging markets.

Promote the Company’s expertise in crystal engineering by developing crystal morphologies that help our customers achieve functional benefits.

Deploy new calcium carbonate products in paint, coating and packaging applications.

Continue developing products and processes for waste management and recycling opportunities to reduce the environmental impact for our customers by reducing energy consumption and improving the sustainability of their products.

Continue to develop innovative applications for our bleaching earth products for edible oil and renewable fuel industries.

Develop new mineral-based solutions for personal care applications.

Increase our presence and market share globally for retinol delivery technology for personal care applications.

Expand our bentonite product solutions for animal health applications.

Increase our presence and market share in fabric care, including in emerging markets.

Engineered Solutions Segment

Increase our presence and gain penetration of our bentonite-based foundry solutions in emerging markets.

Deploy value-added formulations of refractory materials that not only reduce costs but improve performance.

Deploy our laser measurement technologies into new applications.

Expand our refractory maintenance model to other steel makers globally.

Continue the development and market penetration of our FLUORO-SORB® products which address PFAS contamination in soil, groundwater, drinking water sources, landfill leachate and wastewater treatment facilities.

Pursue opportunities for the expanded use of our products in environmental, building and construction, infrastructure, and oil and gas drilling and water treatment globally.

Increase our presence and market share for geosynthetic clay liners globally.

All Segments

Further operational excellence principles into all aspects of the organization, including system infrastructure and lean principles.

Continue to explore selective acquisitions to fit our competencies in minerals and our core technologies.

However, there can be no assurance that we will achieve success in implementing any one or more of these opportunities.

Results of Operations

Three-month period ended September 28, 2025 as compared with three-month period ended September 29, 2024

Consolidated Income Statement Review

(in millions of dollars)

* Percentage not meaningful

Net Sales

(in millions of dollars)

Worldwide net sales increased 1% to $532.4 million in the third quarter from $524.7 million in the prior year.

Net sales in the United States increased to $273.3 million in the third quarter of 2025 from $268.3 million in the third quarter of 2024. International sales increased to $259.1 million from $256.4 million in the prior year.

Operating Costs and Expenses

Cost of goods sold was $395.4 million and represented 74.3% of sales for the three-month period ended September 28, 2025, as compared with $389.5 million and 74.2% of sales in the prior year. Production margin decreased from 25.8% of sales in the prior year to 25.7% of sales in the third quarter of 2025.

Marketing and administrative costs were $53.0 million and 10.0% of sales for the three-month period ended September 28, 2025, as compared to $50.1 million and 9.5% of sales in the prior year.

Research and development expenses were $5.6 million and represented 1.1% of sales for the three-month period ended September 28, 2025, as compared with $5.9 million and 1.1% of sales in the prior year.

The Company recorded litigation expenses in connection with Oldco's bankruptcy filing of $7.5 million and $2.6 million during the three-month periods ending September 28, 2025 and September 29, 2024, respectively.

Income from Operations

The Company recorded income from operations of $70.9 million and $76.6 million during the three-month periods ending September 28, 2025 and September 29, 2024, respectively. Income from operations includes litigation expenses in connection with Oldco’s bankruptcy filing and lawsuits related to talc products sold by Oldco of $7.5 million and $2.6 million during the three-month periods ended September 28, 2025 and September 29, 2024, respectively.

Other Non-Operating Deductions, net

In the third quarter of 2025, non-operating deductions were $14.3 million, as compared with $17.1 million in the prior year. Included in other non-operating deductions in the third quarter of 2025 was net interest expense of $13.8 million, as compared to $14.0 million in the third quarter of the prior year.

Provision for Taxes on Income

Provision for taxes on income was $13.5 million, as compared with $13.7 million in the prior year. The effective tax rate was 23.9%, as compared with 23.0% in the prior year.

Net Income Attributable to MTI Shareholders

Net income attributable to MTI shareholders was $43.0 million for the three-month period ended September 28, 2025, as compared with $46.7 million in the prior year.

Segment Review

The following discussions highlight the operating results for each of our two segments.

(in millions of dollars)

Net sales in the Consumer & Specialties segment was $277.4 million for the three-month period ended September 28, 2025, as compared with $280.3 million in the prior year. Household & Personal Care sales decreased 1% to $129.8 million, as compared with $130.9 million in the prior year. Sales in Specialty Additives decreased 1% to $147.6 million as compared with prior year.

Income from operations was $37.4 million, as compared to $41.7 million in the prior year due to higher operating costs primarily through unfavorable volume leverage and product mix.

(in millions of dollars)

Net sales in the Engineered Solutions segment increased 4% to $255.0 million from $244.4 million in the prior year. High-Temperature Technologies sales increased 2% to $178.9 million, as compared with $174.8 million in the prior year. Strong volume growth in Asia foundry and refractory equipment sales were partially offset by lower volumes in North America foundry business. Environmental & Infrastructure sales increased 9% to $76.1 million, as compared with $69.6 million in the prior year driven by an increase in offshore water filtration and services, as well as infrastructure drilling products.

Income from operations was $44.8 million and 17.6% of sales, as compared with $38.8 million and 15.9% of sales in the prior year.

Nine-month period ended September 28, 2025 as compared with nine-month period ended September 29, 2024

Consolidated Income (Loss) Statement Review

(in millions of dollars)

* Percentage not meaningful

Net Sales

(in millions of dollars)

27

Total net sales decreased 3% from the previous year to $1,553.1 million. Net sales in the United States decreased 1% to $817.6 million from $824.7 million in the prior year. International sales decreased by 5% to $735.5 million from $775.7 million in the prior year.

Operating Costs and Expenses

Cost of goods sold decreased 2% from the prior year and was 74.7% of sales, as compared with 74.1% in the prior year. Gross margin decreased to 25.3% of sales as compared with 25.9% of sales in the prior year.

Marketing and administrative costs were $155.8 million and 10.0% of sales for the nine-month period ended September 28, 2025, as compared to $156.4 million and 9.8% of sales in the prior year.

Research and development expenses were $17.1 million and represented 1.1% of sales for the nine-month period ended September 28, 2025, as compared with $17.3 million and 1.1% of sales in the prior year.

In the second quarter of 2024, the Company, through its subsidiary by Minerals Technologies Investments LLC, entered into a Debtor-in-Possession Credit Agreement with Oldco (the "DIP Credit Agreement") and recorded a $30 million provision for credit losses for the maximum principal amount under the DIP Credit Agreement.

During the nine-month period ended September 28, 2025, the Company recorded a provision for litigation reserve and credit losses of $215.0 million to establish a reserve for estimated costs to fund a trust to resolve all current and future talc-related claims, as well as fund the bankruptcy of Oldco and Barretts Ventures Texas LLC ("BVT"), and related litigation costs. Included in this provision is $30 million of additional debtor-in-possession financing to the debtors.

During the nine-month periods ended September 28, 2025 and September 29, 2024, the Company also recorded litigation expenses of $14.5 million and $8.9 million, respectively, in connection with Oldco’s bankruptcy filing and lawsuits related to talc products sold by Oldco.

In addition, during the nine-month period ended September 28, 2025, the Company recorded a $11.3 million restructuring and other items charge for the write-down of assets and severance and other costs, offset by a $5.6 million net gain on the final installment for the sale of refractories manufacturing assets in China.

Income (loss) from Operations

The Company recorded a loss from operations of $14.6 million for the nine-month period ended September 28, 2025, as compared to income of $202.4 million in the prior year. Loss from operations for the nine-months ended September 28, 2025 includes a provision for litigation reserve and credit losses of $215.0 million and a $11.3 million restructuring and other items charge for the write-down of assets and severance and other costs, offset by a $5.6 million net gain on the final installment for the sale of refractories manufacturing assets in China. Income from operations for the nine-months ended September 29, 2024 includes a $30 million charge related to a provision for credit losses in connection with the DIP Credit Agreement.

In addition, operating income (loss) during the nine-month periods ended September 28, 2025 and September 29, 2024 includes $14.5 million and $8.9 million, respectively, of litigation expenses in connection with Oldco’s bankruptcy filing and lawsuits related to talc products sold by Oldco.

Other Non-Operating Deductions, net

The Company recorded non-operating deductions of $46.0 million for the nine-month period ended September 28, 2025, as compared with $48.2 million in the prior year. Included in non-operating deductions for the nine-month periods ended September 28, 2025 and September 29, 2024 is $41.6 million and $43.8 million, respectively, of net interest expense.

Provision (Benefit) for Taxes on Income

Provision (benefit) for taxes was $(4.7) million, as compared to $43.2 million in the prior year. The effective tax rate was 7.8%, as compared to 28.0% in the prior year. The rate was lower primarily due to the provision for litigation reserve and credit losses recorded in the first quarter of 2025.

Net Income (Loss) Attributable to MTI Shareholders

Consolidated net loss was $55.6 million during the nine-month period ended September 28, 2025, as compared with net income of $113.1 million in the prior year.

Segment Review

The following discussions highlight the operating results for each of our two segments.

(in millions of dollars)

Net sales in the Consumer & Specialties segment decreased 4% to $823.4 million from $861.5 million in the prior year. Household & Personal Care sales decreased 4% to $380.3 million as compared to $396.1 million in the prior year driven by customer inventory destocking and inconsistent ordering patterns at the beginning of the year. Sales in Specialty Additives decreased 5% to $443.1 million as compared to $465.4 million in the prior year driven by weaker paper demand in North America and Europe.

Income from operations was $98.9 million and 12.0% of sales as compared to $127.6 million and 14.8% of sales in the prior year. Included in income from operations for the nine-month period ended September 28, 2025 are $5.8 million of restructuring and other items.

(in millions of dollars)

Net sales in the Engineered Solutions segment decreased to $729.7 million from $738.9 million in the prior year. High-Temperature Technologies’ sales decreased 2% to $526.7 million as compared to $536.8 million in the prior year. Environmental & Infrastructure sales increased slightly to $203.0 million from $202.1 million in the prior year.

Income from operations was $125.2 million and 17.2% of net sales as compared to $122.0 million and 16.5% of sales in the prior year. Included in income from operations for the nine-month period ended September 28, 2025 are $3.3 million of restructuring and other items, offset by a $5.6 million net gain on the final installment for the sale of refractories manufacturing assets in China.

Liquidity and Capital Resources

Cash flow provided by operations during the nine-month period ended September 28, 2025, was approximately $129.4 million. Cash flows from operations during the first nine months of 2025 were principally used to fund capital expenditures, repurchase shares, and to pay the Company’s dividend to common shareholders. The aggregate maturities of long-term debt are as follows: remainder of 2025 - $3.4 million; 2026 - $6.4 million; 2027 - $6.0 million; 2028 - $405.8 million; 2029 - $5.7 million; thereafter - $546.3 million.

On November 26, 2024 the Company entered into a Refinancing Facility Agreement and Incremental Facility Amendment (the “Amendment”) to amend the Company’s previous credit agreement (the “Previous Credit Agreement; the previous credit agreement, as amended by the Amendment, being the “Amended Credit Agreement”). The Amendment provides for, among other things, a new senior secured revolving credit facility with aggregate commitments of $400 million (the “Revolving Facility”), a portion of which may be used for the issuance of letters of credit and swingline loans, and a new senior secured term loan facility with aggregate commitments of $575 million (the “Term Loan Facility” and, together with the Revolving Facility, the “Senior Secured Credit Facilities”). The Revolving Facility and the Term Loan Facility replace the facilities under the Previous Credit Agreement, which provided for, among other things, a $550 million senior secured term loan facility and a $300 million senior secured revolving credit facility. The maturity date for loans and commitments under the Revolving Facility is November 26, 2029, and the maturity date for loans under the Term Loan Facility is November 26, 2031; provided that the maturity dates of the Revolving Facility and the Term Loan Facility will be adjusted to the date that is 91 days prior to the stated maturity date of the Company’s 5.0% Senior Notes due 2028 (the “Notes”) unless, prior to the date that is 91 days prior to the stated maturity date of the Notes, all amounts in excess of $50 million of the Notes have been either (a) refinanced with indebtedness permitted under the Amended Credit Agreement maturing later than 90 days after the scheduled maturity date of the Revolving Facility or of the Term Loan Facility, as applicable, or (b) repaid, discharged or repaid (other than with the proceeds of any indebtedness maturing earlier than 91 days after the scheduled maturity date of the Revolving Facility or of the Term Loan Facility, as applicable). Loans under the Term Loan Facility amortize at a rate equal to 1.00% per annum, payable in equal quarterly instalments, and were issued with original issue discount at 99.875% of par.

Loans under the Revolving Facility will bear interest at a rate equal to (a) for loans denominated in U.S. dollars, at the election of the Company, Term SOFR plus an applicable margin equal to 1.375% per annum or a base rate plus an applicable margin equal to 0.375% per annum, (b) for loans denominated in Euros, adjusted EURIBOR plus an applicable margin equal to 1.375% per annum and (c) for loans denominated in Pounds Sterling, SONIA plus an applicable margin equal to 1.375% per annum, subject in each case to (i) an increase of 37.5 basis points in the event that, and for so long as, the Net Leverage Ratio (as defined in the Amended Credit Agreement) is greater than or equal to 3.00 to 1.00 as of the last day of the preceding fiscal quarter, (ii) an increase of 12.5 basis points in the event that, and for so long as, the Net Leverage Ratio is less than 3.00 to 1.00 and greater than or equal to 2.00 to 1.00 as of the last day of the preceding fiscal quarter and (iii) a decrease of 12.5 basis points in the event that, and for so long as, the Net Leverage Ratio is less than 1.00 to 1.00 as of the last day of the preceding fiscal quarter. Loans under the Term Loan Facility will bear interest at a rate equal to, at the election of the Company, Term SOFR plus an applicable margin equal to 2.00% per annum or a base rate plus an applicable margin equal to 1.00% per annum. The Company will pay certain fees under the Amended Credit Agreement, including (a) a commitment fee of 0.175% per annum on the undrawn portion of the Revolving Facility (subject to a step-ups to 0.300% and 0.250% and a step-down to 0.150% at the same levels described above), (b) a fronting fee of 0.125% per annum on the average daily undrawn amount of, plus unreimbursed amounts in respect of disbursements under, letters of credit issued under the Revolving Facility and (c) customary annual administration fees. The obligations of the Company under the Senior Secured Credit Facilities are unconditionally guaranteed jointly and severally by, subject to certain exceptions, all material domestic subsidiaries of the Company (the “Guarantors”) and secured, subject to certain exceptions, by a security interest in substantially all of the tangible and intangible assets of the Company and the Guarantors.

As of September 28, 2025, there were $13.0 million in loans and $9.3 million in letters of credit outstanding under the Revolving Facility.

On June 30, 2020, the Company issued $400 million aggregate principal amount of Notes. The Notes were issued pursuant to an indenture, dated as of June 30, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Indenture”). The Notes bear an interest rate of 5.0% per annum payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2021. The Notes are unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly owned domestic restricted subsidiaries that is a borrower under or that guarantees the Company’s obligations under its Senior Secured Credit Facilities or that guarantees the Company’s or any of the Company’s wholly owned domestic subsidiaries’ long-term indebtedness in an aggregate amount in excess of $50 million.

The Company may redeem some, or all, of the Notes at any time and from time to time at the applicable redemption prices listed in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

If the Company experiences a change of control (as defined in the indenture), the Company is required to offer to repurchase the Notes at 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

The Amended Credit Agreement and the Indenture both contain certain customary affirmative and negative covenants that limit or restrict the ability of the Company and its restricted subsidiaries to enter into certain transactions or take certain actions, as well as customary events of default. In addition, the Amended Credit Agreement contains a financial covenant that requires the Company to maintain a maximum Net Leverage Ratio of 4.00 to 1.00 for each four fiscal quarter periods (subject to an increase to 5.00 to 1.00 for four quarters in connection with certain significant acquisitions). The Company is in compliance with all the covenants contained in the Amended Credit Agreement throughout the period covered by this report.

The Company has a committed loan facility in Japan. As of September 28, 2025, $0.7 million was outstanding under this loan facility. Principal will be repaid in accordance with the payment schedule ending in 2026. The Company repaid $0.2 million on this loan during the first nine months of 2025.

As part of the Concept Pet acquisition, the Company assumed $1.9 million in long-term debt, recorded at fair value, consisting of two terms loans, one that matures in 2025 and one that matures in 2027. Both loans have annual payments and carry a variable interest rate. The Company repaid $0.1 million on these loans during the first nine months of 2025.

As of September 28, 2025, the Company had $15.2 million in uncommitted short-term bank credit lines, of which $0.4 million were in use. The credit lines are primarily outside the U.S. and are generally one year in term at competitive market rates at large, well-established institutions. The Company typically uses its available credit lines to fund working capital requirements or local capital spending needs.

We anticipate that capital expenditures for 2025 should be approximately $100 million, principally related to opportunities to improve our operations and meet our strategic growth objectives. We expect to meet our other long-term financing requirements from internally generated funds and committed and uncommitted bank credit lines.

In the second quarter of 2023, the Company entered into a new floating to fixed interest rate swap for a notional amount of $150 million. The fair value of this instrument at September 28, 2025 is a liability of $0.1 million.

On October 16, 2024, the Company’s Board of Directors authorized the Company’s management to repurchase, at its discretion, up to $200 million of the Company’s shares. As of September 28, 2025, 816,990 shares have been repurchased under this program for $50.3 million, or an average price of approximately $61.56 per share.

The Company is required to make future payments under various contracts, including debt agreements and lease agreements. The Company also has commitments to fund its pension plans and provide payments for other post-retirement benefit plans. During the nine-month period ended September 28, 2025, there were no material changes in the Company’s contractual obligations.

The Company and certain of the Company’s subsidiaries are among numerous defendants in over eight hundred cases seeking damages for alleged exposure to asbestos-contaminated talc products sold by the Company’s subsidiary Oldco. The Company’s position is that these cases are meritless and all talc products sold by Oldco are safe. On October 2, 2023 (the “Petition Date”), notwithstanding the Company’s confidence in the safety of Oldco’s talc products, Oldco and Barretts Ventures Texas LLC (“BVT” and together with Oldco, the “Chapter 11 Debtors”) filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Chapter 11 Cases”) to address and comprehensively resolve Oldco’s liabilities associated with talc. Minerals Technologies Inc. and the Company’s other subsidiaries were not included in the Chapter 11 filing.

The Chapter 11 Debtors’ ultimate goal in the Chapter 11 Cases is to confirm a plan of reorganization under Section 524(g) of the U.S. Bankruptcy Code and utilize this provision of the Bankruptcy Code to establish a trust that will address all current and future talc-related claims. Discussions regarding the terms of a potential consensual plan of reorganization and the ultimate amount to be contributed to any trust are ongoing.

In the second quarter of 2024, Oldco sold its talc assets under section 363 of the U.S. Bankruptcy Code. In addition, in the second quarter of 2024, the Company entered into a Debtor-in-Possession Credit Agreement with Oldco (the “DIP Credit Agreement”) and recorded a provision for credit loss of $30 million for the maximum principal amount under such DIP Credit Agreement. In the second quarter of 2025, the Company amended the DIP Credit Agreement to increase the maximum principal amount available under the DIP Credit Agreement by $30 million. Proceeds of the sale of Oldco’s talc assets, as well as the funds drawn by Oldco under the DIP Credit Agreement, have been and will be used to fund the Chapter 11 Cases.

In the first quarter of 2025, the Company recorded a provision to establish a reserve of $215 million for estimated costs to fund a trust to resolve all current and future talc-related claims as well as fund the Chapter 11 Cases and related litigation costs (including the aforementioned $30 million increase to the maximum principal amount of the DIP Credit Agreement). The parties have not yet reached a final resolution of all matters in the Chapter 11 Cases, and the Company is unable to estimate the possible loss or range of loss beyond the amount accrued.

During the pendency of the Chapter 11 Cases, the Company anticipates that the Chapter 11 Debtors will benefit from the operation of the automatic stay, which stays ongoing litigation in connection with talc-related claims against Oldco. In addition, the Bankruptcy Court temporarily enjoined the filing or continued prosecution of all talc-related claims against the Chapter 11 Debtors’ non-debtor affiliates, subject to certain exceptions. Such exceptions consist of claims premised solely on alleged inadequacies in testing of talc sold by Oldco. The Company is vigorously opposing and defending against these claims. The Chapter 11 Debtors have been deconsolidated from the Company’s financial statements since the Petition Date.

Although the Chapter 11 Cases are progressing, it is not possible to predict how the District Court will rule on the pending motions, whether an appellate court will affirm or reverse the Bankruptcy Court order denying the Committee’s motion to dismiss, the form of any ultimate resolution or when an ultimate resolution might occur at this time. Accordingly, the Company is unable to estimate the possible loss or range of loss related to the amount that will be necessary to fully and finally resolve all of the Chapter 11 Debtors’ current and future talc-related claims in connection with a confirmed Chapter 11 plan of reorganization beyond the amount accrued. See Note 12 to the Condensed Consolidated Financial Statements included in this report for more information.

Cautionary Statement for “Safe Harbor” Purposes under the Private Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. This report contains statements that the Company believes may be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, particularly statements relating to the Company’s objectives, plans or goals, future actions, future performance or results of current and anticipated products, sales efforts, expenditures, and financial results. From time to time, the Company also provides forward-looking statements in other publicly-released materials, both written and oral. Forward-looking statements provide current expectations and forecasts of future events such as new products, revenues and financial performance, and are not limited to describing historical or current facts. They can be identified by the use of words such as “outlook,” “forecast,” “believes,” “expects,” “plans,” “intends,” “anticipates,” and other words and phrases of similar meaning.

Forward-looking statements are necessarily based on assumptions, estimates and limited information available at the time they are made. A broad variety of risks and uncertainties, both known and unknown, as well as the inaccuracy of assumptions and estimates, can affect the realization of the expectations or forecasts in these statements. Many of these risks and uncertainties are difficult to predict or are beyond the Company’s control. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially. Significant factors that could affect the expectations and forecasts include worldwide general economic, business, and industry conditions; the cyclicality of our customers’ businesses and their changing regional demands; our ability to compete in very competitive industries; consolidation in customer industries, principally paper, foundry and steel; our ability to renew or extend long term sales contracts for our satellite operations; our ability to generate cash to service our debt; our ability to comply with the covenants in the agreements governing our debt; our ability to effectively achieve and implement our growth initiatives or consummate the transactions described in the statements; our ability to successfully develop new products; our ability to defend our intellectual property; the increased risks of doing business abroad including with respect to changes in tariffs; the availability of raw materials and access to ore reserves at our mining operations, or increases in costs of raw materials, energy, or shipping; compliance with or changes to regulation in the areas of environmental, health and safety, and tax; risks and uncertainties related to the voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code filed by our subsidiaries BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) and Barretts Ventures Texas LLC; claims for legal, environmental and tax matters or product stewardship issues; operating risks and capacity limitations affecting our production facilities; seasonality of some of our businesses; cybersecurity and other threats relating to our information technology systems; and other risk factors set forth under “Item 1A — Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and in Exhibit 99 to this Quarterly Report on Form 10-Q.

The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances that arise after the date hereof. Investors should refer to the Company’s subsequent filings under the Securities Exchange Act of 1934 for further disclosures.

Recently Issued Accounting Standards

Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations.

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, that requires entities to disclose additional information about federal, state, and foreign income taxes primarily related to the income tax rate reconciliation and income taxes paid. The new standard also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The new standard is effective for periods beginning on or after December 15, 2024. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements but could result in disaggregation of the Company’s tax footnote.

Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, that requires entities to disclose additional information in the notes to the financial statements about prescribed categories underlying any relevant income statement expense caption. The new standard is effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements but will result in disaggregation of the Company’s income statement expenses.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates and assumptions, including those related to revenue recognition, valuation of long-lived assets, goodwill and other intangible assets, income taxes, including valuation allowances and pension plan assumptions. We base our estimates on historical experience and on other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that cannot readily be determined from other sources. There can be no assurance that actual results will not differ from those estimates.

There have been no material changes to the critical accounting estimates that our accounting policies require us to make in the preparation of our consolidated financial statements, as described in the 2024 Annual Report on Form 10-K.

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in market prices and foreign currency and interest rates. We are exposed to market risk because of changes in foreign currency exchange rates as measured against the U.S. dollar. We do not anticipate that near-term changes in exchange rates will have a material impact on our future earnings or cash flows. However, there can be no assurance that a sudden and significant decline in the value of foreign currencies would not have a material adverse effect on our financial condition and results of operations. A portion of our long-term bank debt bears interest at variable rates; therefore, our results of operations would be affected by interest rate changes to the extent of such outstanding bank debt. An immediate 10 percent change in interest rates would not have a material effect on our results of operations over the next fiscal year. A one-percent change in interest rates, inclusive of the impact of our interest rate derivatives, would result in $4.4 million in incremental interest charges on an annual basis.

We do not enter into derivatives or other financial instruments for trading or speculative purposes. When appropriate, we enter into derivative financial instruments, such as forward exchange contracts, hedges and interest rate swaps, to mitigate the impact of foreign exchange rate movements and interest rate movements on our operating results. The counterparties are major financial institutions. Such forward exchange contracts, hedges and interest rate swaps would not subject us to additional risk from exchange rate or interest rate movements because gains and losses on these contracts would offset losses and gains on the assets, liabilities, and transactions being hedged.

In the second quarter of 2023, the Company entered into a floating to fixed interest rate swap for a notional amount of $150 million. The fair value of this instrument at September 28, 2025 is a liability of $0.1 million.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, and under the supervision and with participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting during the quarter ended September 28, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

For a description of Risk Factors, see Exhibit 99 attached to this report. There have been no material changes to our risk factors from those disclosed in our 2024 Annual Report on Form 10-K.