# Innospec Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [Innospec Inc.](/companies/iosp.md) (CIK 1054905)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 10:25 ET
- Period: 2025-06-30
- Accession: 0000950170-25-103628
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1054905/000095017025103628/iosp-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1054905/000095017025103628/

## 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 | $439.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $880.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $316.5m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $632.2m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $123.2m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $248.3m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-04-01 to 2025-06-30 | $13.6m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 6 months, 2025-01-01 to 2025-06-30 | $26.3m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $74.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $143.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $34.3m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $76.8m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $8.4m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $20.0m | us-gaap:IncomeTaxExpenseBenefit |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.94 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $2.24 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.94 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $2.26 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 25,042,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 25,097,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $37.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 6 months, 2025-01-01 to 2025-06-30 | $20.8m | us-gaap:PaymentsOfDividends |
| Share repurchases | 6 months, 2025-01-01 to 2025-06-30 | $13.3m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-06-30 | $266.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $969.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $1.81bn | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $337.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $504.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $1.30bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 22,792 characters.

This discussion should be read in conjunction with our unaudited interim condensed consolidated financial statements and the notes thereto.

### CRITICAL ACCOUNTING ESTIMATES

The policies and estimates that the Company considers the most critical in terms of complexity and subjectivity of assessment are those related to plant closure provisions, income taxes and goodwill. These policies have been discussed in the Company’s 2024 Form 10-K.

### RESULTS OF OPERATIONS

The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services.

The following table provides sales, gross profit and operating income by reporting segment:

*(in millions)*

| Net sales: | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Performance Chemicals | $173.8 | $160.1 | $342.2 | $320.9 |
| Fuel Specialties | 165.1 | 166.6 | 335.4 | 343.5 |
| Oilfield Services | 100.8 | 108.3 | 202.9 | 270.8 |
|  | $439.7 | $435.0 | $880.5 | $935.2 |
| **Gross profit:** |  |  |  |  |
| Performance Chemicals | $30.5 | $36.2 | $65.8 | $73.9 |
| Fuel Specialties | 62.9 | 57.6 | 123.7 | 118.2 |
| Oilfield Services | 29.8 | 33.1 | 58.8 | 90.5 |
|  | $123.2 | $126.9 | $248.3 | $282.6 |
| **Operating income/(loss):** |  |  |  |  |
| Performance Chemicals | $14.3 | $21.2 | $34.1 | $42.3 |
| Fuel Specialties | 35.4 | 30.4 | 72.3 | 63.8 |
| Oilfield Services | 6.2 | 7.3 | 10.3 | 24.2 |
| Corporate costs | (20.9) | (17.6) | (38.6) | (37.8) |
| Adjustment to fair value of contingent consideration | (0.8) | (0.6) | (1.5) | (1.4) |
| Profit on disposal of property, plant and equipment | 0.1 | — | 0.2 | 0.1 |
| Total operating income | $34.3 | $40.7 | $76.8 | $91.2 |

18

### Three Months Ended June 30, 2025

The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the three months ended June 30, 2025, and the three months ended June 30, 2024:

*(in millions, except ratios)*

| Net sales: | Three Months Ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | --- |
| Performance Chemicals | $173.8 | $160.1 | $13.7 | +9% |
| Fuel Specialties | 165.1 | 166.6 | (1.5) | -1% |
| Oilfield Services | 100.8 | 108.3 | (7.5) | -7% |
|  | $439.7 | $435.0 | $4.7 | +1% |
| **Gross profit:** |  |  |  |  |
| Performance Chemicals | $30.5 | $36.2 | $(5.7) | -16% |
| Fuel Specialties | 62.9 | 57.6 | 5.3 | +9% |
| Oilfield Services | 29.8 | 33.1 | (3.3) | -10% |
|  | $123.2 | $126.9 | $(3.7) | -3% |
| **Gross margin (%):** |  |  |  |  |
| Performance Chemicals | 17.5 | 22.6 | -5.1 |  |
| Fuel Specialties | 38.1 | 34.6 | +3.5 |  |
| Oilfield Services | 29.6 | 30.6 | -1.0 |  |
| **Aggregate** | **28.0** | **29.2** | **-1.2** |  |
| **Operating expenses:** |  |  |  |  |
| Performance Chemicals | $(16.2) | $(15.0) | $(1.2) | +8% |
| Fuel Specialties | (27.5) | (27.2) | (0.3) | +1% |
| Oilfield Services | (23.6) | (25.8) | 2.2 | -9% |
| Corporate costs | (20.9) | (17.6) | (3.3) | +19% |
| Adjustment to fair value of contingent consideration | (0.8) | (0.6) | (0.2) | +33% |
| Profit on disposal of property, plant and equipment | 0.1 | — | 0.1 | n/a |
|  | $(88.9) | $(86.2) | $(2.7) | +3% |

### Performance Chemicals

*Net sales:* the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

| Change (%) | Three Months Ended June 30, 2025 Americas | EMEA | ASPAC | Total |
| --- | ---: | --- | --- | --- |
| Volume | +11 | -4 | +13 | +4 |
| Price and product mix | -7 | +11 | -1 | +2 |
| Exchange rates | — | +5 | +2 | +3 |
|  | +4 | +12 | +14 | +9 |

Higher sales volumes for the Americas were driven by increased demand for our personal care products, being partly offset by an adverse price and product mix due to pricing erosion and higher demand for our lower priced products. The volume decline in EMEA was offset by a favorable price and product mix, primarily driven by higher demand for higher priced personal care products. ASPAC volumes were higher driven by increased demand for our personal care products, partly offset by an adverse price and product mix due to higher demand for lower priced products. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements.

*Gross margin:* the year over year decrease of 5.1 percentage points was primarily due to pricing erosion and higher demand for our lower priced products.

*Operating expenses:* increase by $1.2 million year over year due to higher selling expenses including higher provisions for doubtful debts together with higher research and development expenses, being partly offset by lower provisions for performance-related remuneration accruals.

### Fuel Specialties

*Net sales:* the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

| Change (%) | Three Months Ended June 30, 2025 Americas | EMEA | ASPAC | AvGas | Total |
| --- | ---: | --- | ---: | ---: | ---: |
| Volume | -5 | - | -21 | -19 | -7 |
| Price and product mix | +6 | +1 | +5 | +7 | +4 |
| Exchange rates | — | +4 | +1 | — | +2 |
|  | +1 | +5 | -15 | -12 | -1 |

Sales volumes in the Americas and ASPAC decreased year over year due to decreased demand from customers, while sales volumes in EMEA were unchanged year over year. All our regions benefited from a favorable price and product mix due to an improved sales mix and disciplined pricing. AvGas volumes were lower than the prior year due to variations in the demand from customers, being partly offset by a favorable price and product mix due to a favorable customer mix. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements.

*Gross margin*: the year over year increase of 3.5 percentage points was driven by an improved sales mix from increased sales of higher margin products, together with disciplined pricing and reduced raw material and other inflationary pressures.

*Operating expenses:* the year over year increase of $0.3 million was primarily due to higher commissions.

### Oilfield Services

*Net sales:* have decreased year over year by $7.5 million, or 7 percent. Sales in the Americas were higher year over year, being outweighed by lower sales in EMEA due to reduced demand. The majority of our customer activity is concentrated in the Americas region. Management continues to see potential growth opportunities for many of our oilfield markets.

*Gross margin:* the year over year decrease of 1.0 percentage points was due to a weaker sales mix.

*Operating expenses:* the year over year decrease of $2.2 million was primarily due to lower provisions for doubtful debts and lower provisions for performance-related remuneration accruals.

### Other Income Statement Captions

*Corporate costs:* the year over year increase of $3.3 million was primarily due to increased provisions for environmental remediation in relation to legacy operations, together with the additional investment in our IT infrastructure, the amortization of our new group-wide ERP system and lower provisions for performance-related remuneration accruals.

*Other net income/(expense):* for the three months ended June 30, 2025 and 2024, included the following:

*(in millions)*

|  | 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Net pension credit | $— | $1.6 | $(1.6) |
| Profit attributable to non-controlling interests | (0.4) | (0.8) | 0.4 |
| Foreign exchange gains/(losses) on translation | (0.6) | 0.7 | (1.3) |
| Foreign currency forward contracts gains/(losses) | (4.1) | (0.6) | (3.5) |
|  | $(5.1) | $0.9 | $(6.0) |

*Interest income/(expense), net:* in the three months ended June 30, 2025 was $2.7 million of income compared to $2.1 million of income in the three months ended June 30, 2024, driven by the interest income being earned from our higher cash balances.

*Income taxes:* the effective tax rate was 26.3% and 28.6% in the second quarter of 2025 and 2024, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 23.5% in 2025 compared with 28.4% in 2024. The 4.9% decrease in the adjusted effective rate was primarily due to the fact that a higher proportion of the Company’s profits are being generated in lower tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company’s operations and for planning and forecasting in subsequent periods.

The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:

*(in millions)*

|  | Three Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Income before income taxes | $31.9 | $43.7 |
| Adjustment for stock compensation | 2.1 | 2.1 |
| Adjustment to fair value of contingent consideration | 0.8 | 0.6 |
| Legacy costs of closed operations | 3.0 | 0.8 |
| Adjusted income before income taxes | $37.8 | $47.2 |
| Income taxes | $8.4 | $12.5 |
| Tax on stock compensation | (0.2) | 0.2 |
| Adjustment of income tax provision | — | (3.1) |
| Tax on adjustment to fair value of contingent consideration | — | 0.2 |
| Tax on legacy cost of closed operations | 0.7 | 0.2 |
| Adjustments to tax charge of prior periods | — | 3.4 |
| Adjusted income taxes | $8.9 | $13.4 |
| GAAP effective tax rate | 26.3% | 28.6% |
| Adjusted effective tax rate | 23.5% | 28.4% |

21

### Six Months Ended June 30, 2025

The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the six months ended June 30, 2025, and the six months ended June 30, 2024:

*(in millions, except ratios)*

| Net sales: | Six Months Ended June 30, 2025 | 2024 | Change |  |
| --- | ---: | ---: | ---: | ---: |
| Performance Chemicals | $342.2 | $320.9 | $21.3 | +7% |
| Fuel Specialties | 335.4 | 343.5 | (8.1) | -2% |
| Oilfield Services | 202.9 | 270.8 | (67.9) | -25% |
|  | $880.5 | $935.2 | $(54.7) | -6% |
| **Gross profit:** |  |  |  |  |
| Performance Chemicals | $65.8 | $73.9 | $(8.1) | -11% |
| Fuel Specialties | 123.7 | 118.2 | 5.5 | +5% |
| Oilfield Services | 58.8 | 90.5 | (31.7) | -35% |
|  | $248.3 | $282.6 | $(34.3) | -12% |
| **Gross margin (%):** |  |  |  |  |
| Performance Chemicals | 19.2 | 23.0 | -3.8 |  |
| Fuel Specialties | 36.9 | 34.4 | +2.5 |  |
| Oilfield Services | 29.0 | 33.4 | -4.4 |  |
| **Aggregate** | **28.2** | **30.2** | -2.0 |  |
| **Operating expenses:** |  |  |  |  |
| Performance Chemicals | $(31.7) | $(31.6) | $(0.1) | +0% |
| Fuel Specialties | (51.4) | (54.4) | 3.0 | -6% |
| Oilfield Services | (48.5) | (66.3) | 17.8 | -27% |
| Corporate costs | (38.6) | (37.8) | (0.8) | +2% |
| Adjustment to fair value of contingent consideration | (1.5) | (1.4) | (0.1) | n/a |
| Profit on disposal of property, plant and equipment | 0.2 | 0.1 | 0.1 | n/a |
|  | $(171.5) | $(191.4) | $19.9 | -10% |

### Performance Chemicals

*Net sales:* the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

| Change (%) | Six Months Ended June 30, 2025 Americas | EMEA | ASPAC | Total |
| --- | ---: | ---: | --- | --- |
| Volume | +11 | -3 | +21 | +4 |
| Price and product mix | -6 | +10 | +3 | +3 |
| Exchange rates | — | -1 | — | — |
|  | +5 | +6 | +24 | +7 |

Higher sales volumes for the Americas were driven by increased demand for our personal care products, being partly offset by an adverse price and product mix due to pricing erosion and higher demand for our lower priced products. The volume decline in EMEA was offset by a favorable price and product mix, primarily driven by increased demand for our higher priced products. ASPAC volumes were higher driven by increased demand for our personal care products, together with a favorable price and product mix due to higher demand for higher priced personal care products.

*Gross margin:* the year over year decrease of 3.8 percentage points was primarily due to pricing erosion and higher demand for our lower priced products.

*Operating expenses:* increased by $0.1 million year over year due to higher selling expenses and higher research and development expenses, being partly offset by lower provisions for performance-related remuneration accruals.

### Fuel Specialties

*Net sales:* the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

| Change (%) | Six Months Ended June 30, 2025 Americas | EMEA | ASPAC | AvGas | Total |
| --- | ---: | ---: | ---: | ---: | ---: |
| Volume | -2 | +1 | -19 | -8 | -3 |
| Price and product mix | +1 | -1 | +4 | +6 | +1 |
| Exchange rates | — | — | — | — | — |
|  | -1 | — | -15 | -2 | -2 |

Sales volumes in the Americas and ASPAC have decreased year over year due to decreased demand from customers, being partly offset by a favorable price and product mix due to an improved sales mix and disciplined pricing. Sales volumes in EMEA have increased year over year due to increased demand from customers, being offset by an adverse price and product mix. AvGas volumes were lower than the prior year due to variations in the demand from customers, being partly offset by a favorable price and product mix due to a favorable customer mix.

*Gross margin*: the year over year increase of 2.5 percentage points was driven by an improved sales mix from increased sales of higher margin products, together with disciplined pricing and reduced raw material and other inflationary pressures.

*Operating expenses:* the year over year decrease of $3.0 million was primarily due to lower provisions for doubtful debts together with lower provisions for performance-related remuneration accruals.

### Oilfield Services

*Net sales:* have decreased year over year by $67.9 million, or 25 percent, with the majority of our customer activity concentrated in the Americas region. Sales volumes in the current year were adversely impacted by the absence of production chemical activity in Latin America. Management continues to see potential growth opportunities for our other oilfield markets.

*Gross margin:* the year over year decrease of 4.4 percentage points was due to an unfavorable sales mix as our customer demand has weakened.

*Operating expenses:* the year over year decrease of $17.8 million was due to lower customer service costs and commissions related to the reduced demand from certain customers, together with lower provisions for performance-related remuneration accruals.

### Other Income Statement Captions

*Corporate costs:* the year over year increase of $0.8 million was primarily due to increased provisions for environmental remediation in relation to legacy operations, the additional investment in our IT infrastructure and the amortization of our new group-wide ERP system, being partly offset by lower provisions for performance-related remuneration accruals.

*Other net income/(expense):* for the six months ended June 30, 2025 and 2024, included the following:

*(in millions)*

|  | 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Net pension credit/(cost) | $(0.1) | $3.3 | $(3.4) |
| Profit attributable to non-controlling interests | (0.4) | $(0.1) | (0.3) |
| Foreign exchange gains/(losses) on translation | 1.3 | (1.2) | 2.5 |
| Foreign currency forward contracts gains/(losses) | (6.4) | 1.6 | (8.0) |
|  | $(5.6) | $3.6 | $(9.2) |

*Interest income/(expense), net:* in the six months ended June 30, 2025 was $5.1 million of income compared to $4.2 million of income in the six months ended June 30, 2024, driven by the interest income being earned from our higher cash balances.

*Income taxes:* the effective tax rate was 26.2% and 26.7% in the first six months of 2025 and 2024, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 24.0% in 2025 compared with 26.2% in 2024. The 1.8% decrease in the adjusted effective rate was primarily due to the fact that a higher proportion of the Company’s profits are being generated in lower tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company’s operations and for planning and forecasting in subsequent periods.

The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:

*(in millions)*

|  | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Income before income taxes | $76.3 | $99.0 |
| Indemnification asset regarding tax audit | — | 0.1 |
| Adjustment for stock compensation | 4.1 | 4.2 |
| Adjustment to fair value of contingent consideration | 1.5 | 1.4 |
| Legacy cost of closed operations | 3.8 | 1.6 |
| Adjusted income before income taxes | $85.7 | $106.3 |
| Income taxes | $20.0 | $26.4 |
| Tax on stock compensation | (0.3) | 0.1 |
| Adjustment of income tax provision | — | (2.9) |
| Tax on legacy cost of closed operations | 0.9 | 0.4 |
| Tax on adjustment to fair value of contingent consideration | — | 0.5 |
| Adjustments to tax charge of prior periods | — | 3.4 |
| Adjusted income taxes | $20.6 | $27.9 |
| GAAP effective tax rate | 26.2% | 26.7% |
| Adjusted effective tax rate | 24.0% | 26.2% |

24

### LIQUIDITY AND FINANCIAL CONDITION

### Working Capital

In the six months ended June 30, 2025 our working capital increased by $47.1 million, while our adjusted working capital increased by $42.9 million. The difference is primarily due to the exclusion of the increases for cash and cash equivalents, together with the changes for the current portion of income taxes.

The Company believes that adjusted working capital, a non-GAAP financial measure (defined by the Company as trade and other accounts receivable, inventories, prepaid expenses, accounts payable and accrued liabilities rather than total current assets less total current liabilities) provides useful information to investors in evaluating the Company’s underlying performance and identifying operating trends. Management uses this non-GAAP financial measure internally to allocate resources and evaluate the performance of the Company’s operations. Items excluded from working capital in the adjusted working capital calculation are listed in the table below and represent factors which do not fluctuate in line with the day to day working capital needs of the business.

*(in millions)*

|  | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Total current assets | $969.7 | $956.6 |
| Total current liabilities | (337.4) | (371.4) |
| Working capital | 632.3 | 585.2 |
| Less cash and cash equivalents | (266.6) | (289.2) |
| Less prepaid income taxes | (12.1) | (3.1) |
| Less other current assets | (4.4) | (0.6) |
| Add back accrued income taxes | 3.9 | 19.6 |
| Add back current portion of plant closure provisions | 5.0 | 5.0 |
| Add back current portion of operating lease liabilities | 15.6 | 13.9 |
| Adjusted working capital | $373.7 | $330.8 |

We had a $5.6 million decrease in trade and other accounts receivable, which was primarily due to the reduced revenues in our Oilfield Services segment. Days’ sales outstanding increased in our Performance Chemicals segment from 61 days to 65 days; remained unchanged at 57 days in our Fuel Specialties segment; and decreased from 83 days to 61 days in our Oilfield Services segment.

We had a $35.8 million increase in inventories, including a $3.1 million increase in allowances, which was driven by higher levels of finished goods and raw materials in our Fuel Specialties segment, due to higher production relating to expected sales volumes and planned maintenance shutdowns. The Company continues to maintain inventory levels necessary to manage the risk of potential supply chain disruption for certain key raw materials, especially in our Fuel Specialties segment. Days’ sales in inventory in our Performance Chemicals segment decreased from 63 days to 61 days; increased from 113 days to 155 days in our Fuel Specialties segment; and decreased from 76 days to 74 days in our Oilfield Services segment.

Prepaid expenses decreased $7.3 million, from $21.0 million to $13.7 million, primarily due to the cyclical expensing of prepaid invoices.

We had a $20.0 million decrease in accounts payable and accrued liabilities, which was dependent on the timing of payments for each of our reporting segments and related to the lower activity in our Oilfield Services segment. Creditor days (including goods received not invoiced) have decreased in our Performance Chemicals segment from 46 days to 45 days; increased from 44 days to 60 days in our Fuel Specialties segment; and decreased from 68 days to 55 days in our Oilfield Services segment. The changes for creditor days are impacted by the timing of sales and cost of sales in the quarter, when using a countback methodology.

### Operating Cash Flows

We generated cash from operating activities of $37.6 million in the six months ended June 30, 2025 compared to $85.3 million in the six months ended June 30, 2024. The decrease in cash generated from operating activities was primarily related to decreased operating income, less favorable working capital cash flows and increased income tax payments.

### Cash

At June 30, 2025 and December 31, 2024, we had cash and cash equivalents of $266.6 million and $289.2 million, respectively, of which $141.4 million and $133.9 million, respectively, were held by non-U.S. subsidiaries principally in the United Kingdom.

The decrease in cash and cash equivalents of $22.6 million for the six months ended June 30, 2025 was primarily driven by our continued investments in capital projects, the payment of our semi-annual dividend and the repurchases of our common stock, being partly offset by the cash generated from operating activities.

### Debt

We continue to have available a $250.0 million multicurrency revolving credit facility.

At June 30, 2025, and December 31, 2024, we had no debt outstanding under the revolving credit facility and no obligations were outstanding under finance leases. See Note 8 of the Notes to the Condensed Consolidated Financial Statements for additional information.

## Market risk

As filed, 2,074 characters.

The Company uses floating rate debt to finance its global operations. The Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations, and market risk related to changes in interest rates and foreign currency exchange rates. The political and economic risks are mitigated by the stability of the major countries in which the Company’s largest operations are located. Credit limits, ongoing credit evaluation and account monitoring procedures are used to minimize bad debt risk. Collateral is not generally required.

From time to time, the Company uses derivatives, including interest rate swaps, commodity swaps and foreign currency forward exchange contracts, in the normal course of business to manage market risks. The derivatives used in hedging activities are considered risk management tools and are not used for trading purposes. In addition, the Company enters into derivative instruments with a diversified group of major financial institutions in order to manage the exposure to non-performance of such instruments. The Company’s objective in managing the exposure to changes in interest rates is to limit the impact of such changes on earnings and cash flows and to lower overall borrowing costs. The Company’s objective in managing the exposure to changes in foreign currency exchange rates is to reduce volatility on earnings and cash flows associated with such changes.

The Company offers fixed prices for some long-term sales contracts. As manufacturing and raw material costs are subject to variability, the Company, from time to time, uses commodity swaps to hedge the cost of some raw materials thus reducing volatility on earnings and cash flows. The derivatives are considered risk management tools and are not used for trading purposes. The Company’s objective is to manage its exposure to fluctuating costs of raw materials.

The Company’s exposure to market risk has been discussed in the 2024 Form 10-K and there have been no significant changes since that time.

## Controls and procedures

As filed, 2,149 characters.

### Evaluation of Disclosure Controls and Procedures

Based on an evaluation carried out as of the end of the period covered by this report, under the supervision and with the participation of our management, our Chief Executive Officer and our Chief Financial Officer concluded that the Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) were effective as of June 30, 2025, to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

The Company is continuously seeking to improve the efficiency and effectiveness of its operations and of its internal control over financial reporting. This is intended to result in refinements to processes throughout the Company.

As previously disclosed, we are continuing with the development of a new, company-wide, information system platform which began in 2022. The new platform provider is well established in the market. The implementation is a phased, risk-managed, site deployment following a multistage user acceptance program with the existing platform providing a fallback position. In connection with this implementation, the Company has updated its internal controls over financial reporting, as necessary, to accommodate modifications to its business processes and accounting procedures.

There were no changes to our internal control over financial reporting which were identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 331 characters.

Information regarding risk factors that could have a material impact on our results of operations or financial condition are described under “Risk Factors” in Item 1A of Part I of our 2024 Form 10-K. In management’s view, there have been no material changes in the risk factors facing the Company as disclosed in those SEC filings.

Filed Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-103628. Last ingested by Listed: Nov 3, 2026, 19:52 ET. No prices; not investment advice.