# Cabot Corp: Form 10-Q for the period ended Jun 30, 2025

- Company: [Cabot Corp](/companies/cbt.md) (CIK 16040)
- Form: 10-Q
- Filed: 2025-08-05
- Accepted by EDGAR: Aug 5, 2025, 15:41 ET
- Period: 2025-06-30
- Accession: 0000950170-25-102921
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/16040/000095017025102921/cbt-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/16040/000095017025102921/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $923.0m | us-gaap:Revenues |
| Revenue | 9 months, 2024-10-01 to 2025-06-30 | $2.81bn | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $679.0m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-10-01 to 2025-06-30 | $2.09bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $244.0m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-10-01 to 2025-06-30 | $720.0m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $15.0m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2024-10-01 to 2025-06-30 | $44.0m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $62.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-10-01 to 2025-06-30 | $192.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $167.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-10-01 to 2025-06-30 | $484.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $19.0m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2024-10-01 to 2025-06-30 | $56.0m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $43.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-10-01 to 2025-06-30 | $133.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $101.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-10-01 to 2025-06-30 | $288.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $1.86 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-10-01 to 2025-06-30 | $5.22 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $1.87 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-10-01 to 2025-06-30 | $5.27 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 53,800,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-10-01 to 2025-06-30 | 54,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-10-01 to 2025-06-30 | $446.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-10-01 to 2025-06-30 | $210.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2024-10-01 to 2025-06-30 | $71.0m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 9 months, 2024-10-01 to 2025-06-30 | $129.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-06-30 | $239.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $1.57bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $3.84bn | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $740.0m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2025-06-30 | $1.10bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-06-30 | $10.0m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2025-06-30 | $100.0m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-06-30 | $1.54bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 38,441 characters.

### Recently Issued Accounting Pronouncements

Refer to the discussion under the heading “Recent Accounting Pronouncements” in Note B of our Notes to the Consolidated Financial Statements.

### Results of Operations

The Company has two reportable segments: Reinforcement Materials and Performance Chemicals. Cabot is also organized for operational purposes into three geographic regions: the Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific. The discussion of our results of operations for the periods presented reflects these structures.

Our analysis of our financial condition and operating results should be read with our consolidated financial statements and accompanying notes.

### Definition of Terms and Non-GAAP Financial Measures

When discussing our results of operations, we use several terms as described below.

The term “product mix” refers to the mix of types and grades of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business and/or segment.

Our discussion under the heading “(Provision) Benefit for Income Taxes and Reconciliation of Effective Tax Rate to Operating Tax Rate” includes a discussion and reconciliation of our “effective tax rate” and our “operating tax rate” for the periods presented, as well as management’s projection of our operating tax rate range for the full fiscal year. Our operating tax rate is a non-GAAP financial measure and should not be considered as an alternative to our effective tax rate, the most comparable GAAP financial measure. The operating tax rate is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis, the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvestment assertions. Our definition of the operating tax rate may not be comparable to the definition used by other companies. Management believes that this non-GAAP financial measure is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.

Our discussion under the heading “Third Quarter of Fiscal 2025 versus Third Quarter of Fiscal 2024—By Business Segment” includes a discussion of Total segment EBIT, which is a non-GAAP financial measure defined as Income (loss) from operations before income taxes and equity in earnings from affiliated companies less certain items and other unallocated items. Our Chief Operating Decision Maker, who is our President and Chief Executive Officer, uses segment EBIT to evaluate the operating results of each segment and to allocate resources to the segments. We believe Total segment EBIT, which reflects the sum of EBIT from our reportable segments, provides useful supplemental information for our investors as it is an important indicator of our operational strength and performance, allows investors to see our results through the eyes of management, and provides context for our discussion of individual business segment performance. Total segment EBIT should not be considered an alternative for Income (loss) from operations before income taxes and equity in earnings of affiliated companies, which is the most directly comparable U.S. GAAP financial measure. A reconciliation of Total segment EBIT to Income (loss) from operations before income taxes and equity in earnings of affiliated companies is provided under the heading “Third quarter of Fiscal 2025 versus Third quarter of Fiscal 2024—By Business Segment”. Investors should consider the limitations associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another.

In calculating Total segment EBIT, we exclude from our Income (loss) from operations before income taxes and equity in earnings of affiliated companies (i) items of expense and income that management does not consider representative of our fundamental on-going segment results, which we refer to as “certain items”, and (ii) items that, because they are not controlled by the business segments and primarily benefit corporate objectives, are not allocated to our business segments, such as interest expense and other corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to special projects and initiatives, which we refer to as “other unallocated items”. Management believes excluding the items identified as certain items facilitates operating performance comparisons from period to period by eliminating differences that would not otherwise be apparent on a GAAP basis and also facilitates an evaluation of our operating performance without the impact of these costs or benefits. The items of income and expense that we have excluded from

Total segment EBIT, as applicable, but that are included in our GAAP Income (loss) from operations before income taxes and equity in earnings of affiliated companies, as applicable, are described below.

- Argentina controlled currency devaluation loss related to the foreign exchange loss from government-controlled currency devaluations on our net monetary assets denominated in the Argentine peso and investment losses related to the utilization of government bond programs established for the settlement of certain foreign payables.
- Global restructuring activities, which include costs or benefits associated with cost reduction initiatives or plant closures and are primarily related to (i) employee termination costs, (ii) asset impairment charges associated with restructuring actions, (iii) costs to close facilities, including environmental costs and contract termination penalties, and (iv) gains realized on the sale of land or equipment associated with restructured plants or locations.
- Legal and environmental matters and reserves, which consist of costs or benefits for matters typically related to former businesses or that are otherwise incurred outside of the ordinary course of business.
- Acquisition and integration-related charges, which include transaction costs, redundant costs incurred during the period of integration, and costs associated with transitioning certain management and business processes to Cabot’s processes.
- Asset impairment charges, which primarily include charges associated with an impairment of goodwill, other long-lived assets or assets held for sale.
- Gains (losses) on sale of a business.
- Employee benefit plan settlements, which consist of either charges or benefits associated with the termination of a pension plan or the transfer of a pension plan to a multi-employer plan.

### Overview

During the third quarter of fiscal 2025, Income (loss) before income taxes and equity in earnings of affiliated companies decreased as compared to the third quarter of fiscal 2024. The decrease was primarily due to lower segment EBIT in Reinforcement Materials, partially offset by lower Unallocated corporate costs and higher segment EBIT in Performance Chemicals.

### Third quarter of Fiscal 2025 versus Third quarter of Fiscal 2024—Consolidated

#### Net Sales and Other Operating Revenues and Gross Profit

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net sales and other operating revenues | $923 | $1,016 | $2,814 | $2,993 |
| Gross profit | $244 | $256 | $720 | $720 |

For the three and nine months ended June 30, 2025, Net sales and other operating revenue decreased by $93 million and $179 million, respectively, compared to the same periods of fiscal 2024.

The decrease in Net sales and other operating revenues in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 was driven by lower volumes in both our Reinforcement Materials and Performance Chemicals segments ($66 million combined) and less favorable pricing and product mix in Reinforcement Materials ($27 million). The lower volumes in both Reinforcement Materials and Performance Chemicals were primarily due to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment. The less favorable pricing and product mix in Reinforcement Materials was driven by lower raw material costs which, in certain instances, are passed through to our customers through formulas and other market-based adjustments.

The decrease in Net sales and other operating revenues in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024 was driven by lower volumes in Reinforcement Materials ($94 million), less favorable pricing and product mix in both our Reinforcement Materials and Performance Chemicals segments ($92 million combined), and the unfavorable impact from foreign currency translation in Reinforcement Materials ($23 million), partially offset by higher volumes in Performance Chemicals ($35 million). The lower volumes in Reinforcement Materials were primarily due to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment. The less favorable pricing and product mix was driven by lower raw material costs which, in certain instances, are passed through to our customers through formulas and other market-based adjustments. The higher volumes in Performance Chemicals were primarily in our Fumed Metal Oxides, Inkjet Colorants and Battery Materials product lines from higher demand.

For the three and nine months ended June 30, 2025, gross profit decreased by $12 million and remained flat, respectively, compared to the same periods of fiscal 2024.

The decrease in Gross profit in the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024 was driven primarily by lower volumes in both our Reinforcement Materials and Performance Chemical segments ($25 million combined) which were partially offset by higher gross profit per ton in both our Reinforcement Materials and Performance Chemicals segments ($9 million combined). The lower volumes in both our Reinforcement Materials and Performance Chemicals segments were primarily due to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment. The higher gross profit per ton in both our Reinforcement Materials and Performance Chemicals segments was primarily driven by optimization actions and lower spending from cost management efforts.

#### Selling and Administrative Expenses

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Selling and administrative expenses | $62 | $68 | $192 | $210 |

Selling and administrative expenses decreased by $6 million and $18 million for the three and nine months ended June 30, 2025, respectively, compared to the same periods of fiscal 2024, primarily from cost management efforts.

#### Research and Technical Expenses

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Research and technical expenses | $15 | $16 | $44 | $46 |

Research and technical expenses decreased by $1 million in the third quarter of fiscal 2025 and decreased by $2 million for the nine months ended June 30, 2025, respectively, compared to the same periods of fiscal 2024.

#### Interest and Dividend Income, Interest Expense and Other Income (Expense)

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Interest and dividend income | $7 | $8 | $20 | $25 |
| Interest expense | $(19) | $(19) | $(56) | $(62) |
| Other income (expense) | $— | $(3) | $2 | $(33) |

Interest and dividend income decreased by $1 million and $5 million in the three and nine months ended June 30, 2025, respectively, compared to the same periods of fiscal 2024, primarily due to lower average interest rates, partially offset by higher average cash balances.

Interest expense remained flat and decreased by $6 million in the three and nine months ended June 30, 2025, respectively, compared to the same periods of fiscal 2024, due to lower average interest rates on short term borrowings.

Other income (expense) was $3 million in the third quarter of fiscal 2024, with no such amounts in the third quarter of fiscal 2025, and $35 million less expense for the nine months ended June 30, 2025. The change in both periods was primarily due to lower foreign exchange losses primarily in Argentina.

#### (Provision) Benefit for Income Taxes and Reconciliation of Effective Tax Rate to Operating Tax Rate

*Dollars in millions*

|  | Three Months Ended June 30 2025 (Provision) / Benefit for Income Taxes Rate | 2024 (Provision) / Benefit for Income Taxes Rate |
| --- | ---: | ---: |
| Effective tax rate | $(43) 28% | $(40) 25% |
| Less: Non-GAAP tax adjustments(1) | — | 3 |
| Operating tax rate | $(43) 28% | $(43) 27% |
|  | **Nine Months Ended June 30** |  |
|  | **2025** | **2024** |
|  | **(Provision) / Benefit for Income Taxes** **Rate** | **(Provision) / Benefit for Income Taxes** **Rate** |
| **Dollars in millions** |  |  |
| Effective tax rate | $(133) 29% | $(121) 31% |
| Less: Non-GAAP tax adjustments(1) | (6) | 3 |
| Operating tax rate | $(127) 28% | $(124) 28% |

(1) Non-GAAP tax adjustments made to arrive at the operating tax provision include the income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis, the timing of losses in certain jurisdictions, as further described above under the heading “Definition of Terms and Non-GAAP Financial Measures”.

For the three months ended June 30, 2025, the (Provision) benefit for income taxes was a provision of $43 million compared to a provision of $40 million for the same period in fiscal 2024, with the change primarily due to the mix of earnings. Our income taxes are affected by the mix of earnings in the tax jurisdictions in which we operate, and by the presence of valuation allowances in certain tax jurisdictions.

For the nine months ended June 30, 2025, the (Provision) benefit for income taxes was a provision of $133 million compared to a $121 million provision for the same period in fiscal 2024, primarily due to higher earnings in the current period.

For fiscal 2025, we expect the Operating tax rate to be in the range of 27% to 29%. We are not providing a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.

#### Net Income (Loss) Attributable to Noncontrolling Interests

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Equity in earnings of affiliated companies, net of tax | $1 | $2 | $5 | $5 |
| Net income (loss) attributable to noncontrolling interests, net of tax | $12 | $11 | $34 | $35 |

Equity in earnings of affiliated companies, net of tax, decreased by $1 million and remained flat during the three and nine months ended June 30, 2025, respectively, compared to the same periods of fiscal 2024 primarily due to lower profitability of our equity affiliate in Venezuela.

Net income (loss) attributable to noncontrolling interests, net of tax, increased by $1 million in the three months ended June 30, 2025, compared to the same period of fiscal 2024 primarily due to higher earnings of our joint ventures in the Czech Republic and China. Net income (loss) attributable to noncontrolling interests, net of tax, decreased by $1 million in the first nine months of fiscal 2025 compared to the same period of fiscal 2024 primarily due to lower earnings of our joint venture in the Czech Republic.

### Net Income Attributable to Cabot Corporation

In the third quarter of fiscal 2025 and fiscal 2024, we reported Net income (loss) attributable to Cabot Corporation of $101 million ($1.86 per diluted common share) and $109 million ($1.94 per diluted common share), respectively. The lower Net income in the third quarter of fiscal 2025 compared with the same period in fiscal 2024 was primarily due to lower Segment EBIT in Reinforcement Materials ($8 million).

In the first nine months of fiscal 2025 and fiscal 2024, we reported Net income (loss) attributable to Cabot Corporation of $288 million ($5.22 per diluted common share) and $243 million ($4.30 per diluted common share), respectively. The higher Net income in the first nine months of fiscal 2025 compared with the same period in fiscal 2024 was primarily due to lower Argentina controlled currency devaluation and other losses ($43 million).

### Third quarter of Fiscal 2025 versus Third quarter of Fiscal 2024—By Business Segment

Income (loss) before income taxes and equity in earnings of affiliated companies, Certain items, Other unallocated items and Total segment EBIT for the three and nine months ended June 30, 2025 and 2024 are included in the following table, and details of each item is set forth in the sections below.

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Income (loss) before income taxes and equity in earnings of affiliated companies | $155 | $158 | $450 | $394 |
| Less: Certain items | (3) | (2) | (13) | (56) |
| Less: Other unallocated items | (27) | (31) | (78) | (84) |
| Total segment EBIT | $185 | $191 | $541 | $534 |

#### Certain Items

Details of the certain items for the three and nine months ended June 30, 2025 and 2024 are as follows:

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Global restructuring activities | $(3) | $(1) | $(6) | $(13) |
| Legal and environmental matters and reserve | — | — | (6) | (1) |
| Argentina controlled currency devaluation and other losses (Note B) | — | (2) | — | (43) |
| Other certain items | — | 1 | (1) | 1 |
| Total certain items | $(3) | $(2) | $(13) | $(56) |

#### Other Unallocated Items

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Interest expense | $(19) | $(19) | $(56) | $(62) |
| Unallocated corporate costs | (13) | (16) | (39) | (51) |
| General unallocated income (expense) | 6 | 6 | 22 | 34 |
| Less: Equity in earnings of affiliated companies, net of tax | 1 | 2 | 5 | 5 |
| Total other unallocated items | $(27) | $(31) | $(78) | $(84) |

Total other unallocated items decreased by $4 million and $6 million for the three and nine months ended June 30, 2025, respectively, when compared to the same periods in fiscal 2024.

A discussion of items that we refer to as “other unallocated items” can be found under the heading “Definition of Terms and Non-GAAP Financial Measures”. The balances of unallocated corporate costs are primarily comprised of expenditures related to managing a public company that are not allocated to the segments and corporate business development costs related to ongoing corporate projects. The balances of General unallocated income (expense) consist of gains (losses) arising from foreign currency transactions, net of other foreign currency risk management activities, interest and dividend income, the profit or loss related to the corporate adjustment for unearned revenue and unrealized holding gains (losses) for investments. This does not include items of income or expense from the items that are separately treated as Certain items.

### Reinforcement Materials

Sales and EBIT for Reinforcement Materials for the third quarter of fiscal 2025 and 2024 were as follows:

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Reinforcement Materials Sales | $573 | $649 | $1,778 | $1,966 |
| Reinforcement Materials EBIT | $128 | $136 | $389 | $414 |

Sales in Reinforcement Materials decreased by $76 million in the third quarter of fiscal 2025 compared to the same period of fiscal 2024 primarily due to lower volumes ($51 million) and less favorable pricing and product mix ($27 million). The lower volumes were primarily due to lower customer demand in the Americas and Asia Pacific driven by uncertainty from tariffs and a weaker global macroeconomic environment. The less favorable pricing and product mix was primarily due to lower raw materials costs that are generally passed through to our customers.

In the first nine months of fiscal 2025, sales in Reinforcement Materials decreased by $188 million as compared to the first nine months of fiscal 2024 primarily due to lower volumes ($94 million), less favorable pricing and product mix ($66 million) and the less favorable impact from foreign currency translation ($23 million). The lower volumes were primarily due to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment. The less favorable pricing and product mix was primarily due to lower raw materials costs that are generally passed through to our customers.

EBIT in Reinforcement Materials in the third quarter of fiscal 2025 decreased by $8 million compared to the same period of fiscal 2024. The decrease in EBIT was primarily driven by lower volumes ($21 million), partially offset by lower selling and administrative expenses ($6 million) and higher gross profit per ton ($5 million). The lower volumes were primarily due to lower customer demand in the Americas and Asia Pacific driven by uncertainty from tariffs and a weaker global macroeconomic environment. The lower selling and administrative expenses and higher gross profit per ton were primarily due to cost management efforts.

In the first nine months of fiscal 2025, EBIT in Reinforcement Materials decreased by $25 million compared to the same period of fiscal 2024. The decrease was primarily driven by lower volumes ($39 million), partially offset by lower selling and administrative expenses ($8 million) and the favorable impact from foreign currency translation ($5 million). The lower volumes were primarily due to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment. The lower selling and administrative expenses were primarily due to cost management efforts.

As we look to the fourth quarter of the fiscal year, we expect the Reinforcement Materials segment EBIT to modestly decline from the third quarter of fiscal 2025 primarily due to expected higher costs sequentially, partially offset by expected higher volumes in Asia Pacific.

### Performance Chemicals

Sales and EBIT for Performance Chemicals for the third quarter of fiscal 2025 and 2024 were as follows:

*(In millions)*

|  | Three Months Ended June 30 2025 | 2024 | Nine Months Ended June 30 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Performance Chemicals Sales | $320 | $332 | $942 | $928 |
| Performance Chemicals EBIT | $57 | $55 | $152 | $120 |

Sales in Performance Chemicals decreased by $12 million in the third quarter of fiscal 2025 as compared to the same period of fiscal 2024 as lower volumes ($15 million) were partially offset by the favorable impact from foreign currency translation ($3 million). The lower volumes were primarily due to lower customer demand driven by uncertainty from tariffs and a weaker global macroeconomic environment, particularly in auto-related applications.

In the first nine months of fiscal 2025, sales in Performance Chemicals increased by $14 million as compared to the first nine months of fiscal 2024 primarily due to higher volumes ($35 million), partially offset by less favorable pricing and product mix ($25 million). The higher volumes were primarily in our fumed metal oxides product line and the less favorable pricing and product mix were primarily due to lower raw material costs which, in certain instances, are passed through to our customers through formulas and other market-based adjustments.

EBIT in Performance Chemicals increased by $2 million in the third quarter of fiscal 2025 as compared to the same period of fiscal 2024 primarily due to higher gross profit per ton ($4 million). The higher gross profit per ton was primarily driven by lower spending from overall cost management efforts, targeted price increases and optimization measures across the segment.

In the first nine months of fiscal 2025, EBIT in Performance Chemicals increased by $32 million as compared to the same period of fiscal 2024. The increase was driven primarily by higher volumes ($25 million) and higher gross profit per ton ($5 million). The higher volumes were driven by higher demand primarily in our fumed metal oxides product line. The higher gross profit per ton was primarily from overall cost management efforts, targeted price increases and optimization measures across the segment.

In July 2025, Dow, our fence-line partner at our fumed metal oxides facility in Barry, Wales, announced that it would be ceasing its polysiloxane operations at their site by mid-calendar year 2026. Dow currently supplies our operations with chlorosilane feedstock, which we convert into fumed silica, under an agreement with a term through the end of calendar year 2028. We are in discussions with Dow about how they will satisfy performance under the terms of our contract.

As we look to the fourth quarter of the fiscal year, we expect the Performance Chemicals segment EBIT to decline from the third quarter of fiscal 2025 primarily due to expected lower seasonal volumes and expected higher costs sequentially.

### Liquidity and Capital Resources

### Overview

Our liquidity position, as measured by cash and cash equivalents plus borrowing availability, decreased by $36 million during the first nine months of fiscal 2025, which was largely due to a higher outstanding commercial paper balance partially offset by a higher cash balance at the end of the period. As of June 30, 2025, we had cash and cash equivalents of $239 million and borrowing availability under our revolving credit agreements of $1.1 billion. We have access to borrowings under the following two credit agreements:

- $1 billion unsecured revolving credit agreement (the “U.S. Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, and the other lenders party thereto, which matures in August 2027. The U.S. Credit Agreement supports our issuance of commercial paper, and borrowings under it may be used for working capital, letters of credit and other general corporate purposes.
- €300 million unsecured revolving credit agreement (the “Euro Credit Agreement”, and together with the U.S. Credit Agreement, the “Credit Agreements”), with PNC Bank, National Association, as Administrative Agent, and the other lenders party thereto, which matures in August 2027. Borrowings under the Euro Credit Agreement may be used for the repatriation of earnings of our foreign subsidiaries to the United States, the repayment of indebtedness of our foreign subsidiaries owing to us or any of our subsidiaries and for working capital and general corporate purposes.

As of June 30, 2025, we were in compliance with the debt covenants under the Credit Agreements, which, with limited exceptions, require us to comply on a quarterly basis with a leverage test requiring the ratio of consolidated net debt to consolidated EBITDA not to exceed 3.50 to 1.00. Consolidated net debt is defined as consolidated debt offset by the lesser of (i) unrestricted cash and cash equivalents and (ii) $150 million.

A significant portion of our business occurs outside the U.S. and our cash generation does not always align geographically with our cash needs. The vast majority of our cash and cash equivalent holdings tend to be held outside the U.S. We generally use a combination of U.S. earnings, repatriation of certain foreign earnings, commercial paper issuances and borrowings under our U.S. Credit Agreement to meet our U.S. cash needs. With the exception of Argentina, which has some currency controls that prevent the distribution of cash, we are generally able to move cash throughout the Company through our cash pooling structures, intercompany accounts and/or distributions, as needed. Although we repatriate certain foreign earnings, cash held by foreign subsidiaries is generally considered permanently reinvested and is used to finance the subsidiaries’ operational activities and future investments. We usually reduce our commercial paper balance and, if applicable, borrowings under our Credit Agreements, at quarter-end using cash derived from customer collections, including the utilization of customer supply chain financing programs, settlement of intercompany balances and short-term intercompany loans. If additional funds are needed in the U.S., we expect to be able to repatriate cash, including cash from China, while paying any withholding or other taxes. Changes in regulations and tax laws in the U.S. or foreign countries could restrict our ability to transfer funds or impose material costs on such transfers.

As of each of June 30, 2025 and September 30, 2024, we had $130 million and $113 million, respectively, of borrowings under the Euro Credit Agreement and no outstanding borrowings under the U.S. Credit Agreement at either date. There was $98 million and $45 million of commercial paper outstanding as of June 30, 2025 and September 30, 2024, respectively.

We anticipate sufficient liquidity from (i) cash on hand; (ii) cash flows from operating activities; and (iii) cash available from the Credit Agreements and our commercial paper program to meet our operational and capital investment needs and financial obligations for both the next twelve months and the foreseeable future. The liquidity we derive from cash flows from operations is, to a large degree, predicated on our ability to collect our receivables in a timely manner, the cost of our raw materials, and our ability to manage inventory levels.

The following discussion of the changes in our cash balance refers to the various sections of our Consolidated Statements of Cash Flows.

### Cash Flows from Operating Activities

Cash provided by operating activities, which consists of net income adjusted for the various non-cash items included in income, changes in working capital and changes in certain other balance sheet accounts, totaled $446 million in the first nine months of fiscal 2025 compared to $488 million of cash provided by operating activities during the same period of fiscal 2024.

Cash provided by operating activities in the first nine months of fiscal 2025 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $114 million and cash dividends received from our equity investments of $13 million, which was offset by an increase in net working capital of $13 million. The increase in net working capital was largely driven by a decrease in Accounts Payable and accrued liabilities offset by a decrease in Accounts and notes receivable and Inventories.

Cash provided by operating activities in the first nine months of fiscal 2024 was driven by business earnings excluding the non-cash impacts of depreciation and amortization of $114 million, foreign exchange losses of $38 million, and a decrease in net working capital of $18 million. The decrease in net working capital was largely driven by an increase in Accounts Payable and accrued liabilities and a decrease in inventories, partially offset by an increase in Accounts and notes receivable.

### Cash Flows from Investing Activities

Investing activities consumed $239 million of cash in the first nine months of fiscal 2025 compared to $146 million of cash consumed in the first nine months of fiscal 2024.

In the first nine months of fiscal 2025 and 2024, investing activities included $210 million and $149 million, respectively, of capital expenditures for sustaining and compliance capital projects at our operating facilities as well as growth-related capital. In addition, in the first nine months of fiscal 2025, investing activities included $27 million for cash paid for the asset acquisition described in Note C of our Notes to the Consolidated Financial Statements.

Capital expenditures for fiscal 2025 are expected to be between $250 million and $275 million. Our planned capital spending program for fiscal 2025 is for sustaining, compliance and improvement capital projects at our operating facilities as well as capacity expansion capital expenditures.

### Cash Flows from Financing Activities

Financing activities consumed $190 million of cash in the first nine months of fiscal 2025 compared to $326 million of cash consumed during the same period of fiscal 2024.

In the first nine months of fiscal 2025, financing activities primarily consisted of share repurchases of $129 million, dividend payments to stockholders of $71 million, and cash dividends paid to noncontrolling interests of $57 million. There were also net proceeds from the issuance of commercial paper of $52 million and net proceeds from short-term borrowings of $3 million, which includes proceeds of $14 million partially offset by repayments of $11 million.

In the first nine months of fiscal 2024, financing activities primarily consisted of net repayment of commercial paper of $123 million, share repurchases of $106 million, dividend payments to stockholders of $69 million, cash dividends paid to noncontrolling interests of $27 million, and net repayment of $12 million under our Euro Credit Agreement, which includes repayments of $26 million partially offset by proceeds of $14 million. These payments were partially offset by proceeds from sales of common stock of $15 million from stock option exercises.

### Forward-Looking Information

This report on Form 10-Q contains “forward-looking statements” under the Federal securities laws. These forward-looking statements address expectations or projections about the future, including our expectations regarding our future business performance and overall prospects, including for EBIT, volumes and costs in our business segments in the fourth quarter of fiscal 2025, and the principal assumptions underlying these expectations, including the possible impact of the OBBA and our relationship with DOW on our operations, and demand for our products, the sufficiency of our cash on hand, cash provided from operations and cash available under our credit and commercial paper facilities to fund our cash requirements in both the next twelve months and the foreseeable future; anticipated capital spending; regulatory developments, including regulatory compliance costs and potential impact on our operations; cash requirements and uses of available cash, including future cash outlays associated with respirator liabilities and the timing of such outlays; amortization expenses; our operating tax rate; timing of the expected closing of our acquisition in Mexico; and the possible outcome of legal and environmental proceedings. From time to time, we also provide forward-looking statements in other materials we release to the public and in oral statements made by authorized officers.

Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control or difficult to predict. If known or unknown risks materialize, our actual results could differ materially from those expressed in the forward-looking statements.

In addition to factors described elsewhere in this report, the following are some of the factors that could cause our actual results to differ materially from those expressed in our forward-looking statements: industry capacity utilization and competition from other specialty chemical companies; safety, health and environmental requirements and related constraints imposed on our business; regulatory and financial risks related to climate change developments; volatility in the price and availability of energy and raw materials, including with respect to the Russian invasion of Ukraine and the U.S.-China trade relationship; a significant adverse change in a customer or joint venture relationship or the failure of a customer or joint venture partner to perform its obligations under agreements with us; failure to achieve growth expectations from new products, applications and technology developments; failure to realize benefits from acquisitions, alliances, or joint ventures or achieve our portfolio management objectives; negative or uncertain worldwide or regional economic conditions and market opportunities, including from trade relations, global health matters or geo-political conflicts; litigation or legal proceedings; interest rates, tax rates, tariffs, currency exchange controls, and fluctuations in foreign currency; our inability to complete capacity expansions or other development projects; and the accuracy of the assumptions we used in establishing reserves for our share of liability for respirator claims. These other factors and risks are discussed more fully in our 2024 10-K.

## Market risk

As filed, 144 characters.

Information about market risks for the period ended June 30, 2025 does not differ materially from that discussed under Item 7A of our 2024 10-K.

## Controls and procedures

As filed, 779 characters.

As of June 30, 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of that date.

There were no changes in our internal controls over financial reporting that occurred during our fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Filed Aug 5, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-102921. Last ingested by Listed: Nov 2, 2026, 19:45 ET. No prices; not investment advice.