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

- Company: [Ecovyst Inc.](/companies/ecvt.md) (CIK 1708035)
- Form: 10-Q
- Filed: 2025-08-07
- Accepted by EDGAR: Aug 7, 2025, 16:02 ET
- Period: 2025-06-30
- Accession: 0001708035-25-000108
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1708035/000170803525000108/ecvt-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1708035/000170803525000108/

## 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 | $200.1m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $362.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $150.4m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $287.0m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $49.7m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $75.3m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $22.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $44.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $17.8m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $16.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $11.1m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $22.1m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $2.1m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $1.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $6.0m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $2.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.05 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.02 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.05 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.02 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 116,535,060 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 117,044,461 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $43.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $49.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 6 months, 2025-01-01 to 2025-06-30 | $21.9m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-06-30 | $69.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $269.4m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $1.80bn | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $119.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $1.10bn | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $847.9m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-06-30 | $8.7m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-06-30 | $692.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 68,671 characters.

*Unless the context requires otherwise, references in this report to “Ecovyst,” “the Company,” “we,” “us” or “our” refer to Ecovyst Inc. and its consolidated subsidiaries.*

### Forward-looking Statements

*This periodic report on Form 10-Q (“Form 10-Q”) includes “forward-looking statements” that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should” and similar expressions are intended to identify these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. Examples of forward-looking statements include, but are not limited to, statements we make regarding demand trends, economic effects on our operations and financial results and our liquidity, potential strategic acquisitions or divestitures, the strategic review of our Advanced Materials & Catalysts segment, potential increased borrowing under our credit facilities, and our belief that our current level of operations, cash and cash equivalents, cash flow from operations and borrowings under our credit facilities and other lines of credit will provide us adequate cash to fund working capital requirements, capital expenditure projects, debt service requirements and other requirements for our business for at least the next twelve months.*

*These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed herein may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.*

#### Some of the key factors that could cause actual results to differ from our expectations include the following risks related to our business:

- as a global business, we are exposed to local business risks in different countries;
- we are affected by general economic conditions and economic downturns;
- exchange rate fluctuations could adversely affect our financial condition, results of operations and cash flows;
- our international operations require us to comply with anti-corruption laws, trade and export controls and regulations of the U.S. government and various international jurisdictions in which we do business;
- alternative technology or other changes in our customers’ products may reduce or eliminate the need for certain of our products;
- our new product development and research and development efforts may not succeed and our competitors may develop more effective or successful products;
- our substantial level of indebtedness could adversely affect our financial condition;
- if we are unable to manage the current and future inflationary environment and to pass on increases in raw material prices, including natural gas, or labor costs to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected;
- we face substantial competition in the industries in which we operate;
- we are subject to the risk of loss resulting from non-payment or non-performance by our customers;
- we rely on a limited number of customers for a meaningful portion of our business;
- multi-year customer contracts in our Ecoservices segment are subject to potential early termination and such contracts may not be renewed at the end of their respective terms;
- our quarterly results of operations are subject to fluctuations because demand for some of our products is seasonal;
- our growth projects may result in significant expenditures before generating revenues, if any, which may materially and adversely affect our ability to implement our business strategy;
- we may be liable to damages based on product liability claims brought against us or our customers for costs associated with recalls of our or our customers’ products;
- we are subject to extensive environmental, health and safety regulations and face various risks associated with potential non-compliance or releases of hazardous materials;
- existing and proposed regulations to address climate change by limiting greenhouse gas emissions may cause us to incur significant additional operating and capital expenses and may impact our business and results of operations;
- production and distribution of our products could be disrupted for a variety of reasons, including as a result of supply chain constraints, and such disruptions could expose us to significant losses or liabilities;
- the insurance that we maintain may not fully cover all potential exposures;
- we could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications;
- our failure to protect our intellectual property and infringement on the intellectual property rights of third parties;
- disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations;
- significant trade developments, including tariffs, have had and may continue to have an adverse effect on us;
- the timing and outcome, if any, of our strategic review process for our Advanced Materials & Catalysts segment
- that we have a material weakness in our internal control over financial reporting and that we may identify additional material weaknesses in the future; and
- other factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report on Form 10-K”).

*The forward-looking statements included herein are made only as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations.*

### Overview

We are a leading integrated and innovative global provider of advanced materials, specialty catalysts, virgin sulfuric acid and sulfuric acid regeneration services. We believe that our products and services contribute to improving the sustainability of the environment.

We conduct operations through two reporting segments: (1) Ecoservices and (2) Advanced Materials & Catalysts (including our 50% interest in the Zeolyst Joint Venture).

Ecoservices: We are a leading provider of sulfuric acid recycling to the North American refining industry for the production of alkylate, an essential gasoline component for lowering vapor pressure and increasing octane to meet stringent gasoline specifications and fuel efficiency standards. We are also a leading North American producer of high quality and high strength virgin sulfuric acid for industrial and mining applications. We also provide chemical waste handling and treatment services, as well as ex-situ catalyst activation services for the refining and petrochemical industry.

Advanced Materials & Catalysts: We are a global supplier of finished silica catalyst, catalyst supports and functionalized silicas necessary to produce high performing plastics and to enable sustainable chemistry through our Advanced Silicas business. This segment also includes our 50% interest in the Zeolyst Joint Venture, where we are a leading global supplier of specialty zeolites used in catalysts that supports the production of sustainable fuels, remove nitrogen oxides from diesel engine emissions and that are broadly applied in refining and petrochemical processes.

#### Stock Repurchase Program

On April 27, 2022, the Board approved a stock repurchase program that authorized the Company to purchase up to $450.0 million of the Company’s common stock over the four-year period from the date of approval. For the six months ended June 30, 2025, the Company repurchased 2,926,152 shares on the open market at an average price of $7.47 per share, for a total of $21.9 million excluding brokerage commissions and accrued excise tax. As of June 30, 2025, $207.7 million was available for share repurchases under the program.

For the six months ended June 30, 2024, the Company repurchased 552,081 shares on the open market at an average price of $9.05 per share, for a total of $5.0 million excluding brokerage commissions and accrued excise tax.

For possible future repurchases, the actual timing, number, and nature of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions and may be conducted through negotiated transactions, open market repurchases or other means, including through Rule 10b-18 and 10b5-1 trading plans or accelerated share repurchases.

### Key Performance Indicators

### Adjusted EBITDA, Adjusted Net Income and Net Debt

Adjusted EBITDA, Adjusted Net Income and Net Debt are financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our competitors. Adjusted EBITDA, Adjusted Net Income, and Net Debt are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net income attributable to continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net income and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture. Adjusted Net Income consists of net income adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net income that we do not consider indicative of our ongoing operating performance. Net Debt consists of total debt less cash and cash equivalents. We believe that these non-GAAP financial measures provide investors with useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business.

You should not consider Adjusted EBITDA, Adjusted Net Income, or Net Debt in isolation or as alternatives to the presentation of our financial results in accordance with GAAP. The presentation of Adjusted EBITDA, Adjusted Net Income and Net Debt financial measures may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. In evaluating Adjusted EBITDA and Adjusted Net Income, you should be aware that we are likely to incur expenses similar to those eliminated in this presentation in the future and that certain of these items could be considered recurring in nature. Our presentation of Adjusted EBITDA and Adjusted Net Income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Reconciliations of Adjusted EBITDA, Adjusted Net Income to GAAP net income and Net Debt to GAAP total debt are included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for each of the respective periods.

### Key Factors and Trends Affecting Operating Results and Financial Condition

### Sales

Sales in our Ecoservices and Advanced Materials & Catalysts segments are made on both a purchase order basis and pursuant to long-term contracts. Within the Zeolyst Joint Venture, included in our Advanced Materials & Catalysts segment, we may also experience demand fluctuations based upon the timing of our customer’s fixed bed catalyst replacements.

Our Ecoservices and Advanced Materials & Catalysts segments continued to benefit from positive demand trends for our products and services in the majority of end uses we serve. For Ecoservices, strong domestic and export demand for refined products continued to support high refinery utilization rates, while more stringent gasoline standards and growing demand for premium gasoline to power higher-compression and turbo-charged engines continued to drive demand for alkylate and for our regeneration services. In addition, demand for virgin sulfuric acid across a wide range of industrial applications remained favorable. For our Advanced Materials & Catalysts segment, global polyethylene demand remained positive, supporting our sales of polyethylene catalysts and catalysts supports.

### Cost of Goods Sold

Cost of goods sold consists of variable product costs, fixed manufacturing expenses, depreciation expense and freight expenses. Variable product costs include all raw materials, energy and packaging costs that are directly related to the manufacturing process. Fixed manufacturing expenses include all plant employment costs, manufacturing overhead and periodic maintenance costs.

The primary raw materials for our Ecoservices segment include spent sulfuric acid, sulfur, acids, bases (including sodium hydroxide, or “caustic soda”) and certain metals. Spent sulfuric acid for our Ecoservices segment is supplied by customers as part of their contracts. The primary raw materials used in the manufacture of products in our Advanced Materials & Catalysts segment include sodium silicate and cesium hydroxide.

Most of our Ecoservices contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. About 90% of our Ecoservices segment sales for the year ended December 31, 2024 were under contracts featuring quarterly price adjustments. The price adjustments generally reflect actual costs for producing acid and tend to protect us from volatility in labor, fixed costs and raw material pricing. The take-or-pay volume protection allows us to cover fixed costs through intermittent, temporary production issues at customer refineries.

While natural gas is not a direct feedstock for any product, natural gas powered machinery and equipment are used to heat raw materials and create the chemical reactions necessary to produce end-products. We maintain multiple suppliers wherever possible and structure our customer contracts when possible to allow for the pass-through of raw material, labor and natural gas costs.

### Joint Venture

We account for our investments in our equity joint ventures under the equity method. Our joint venture, the Zeolyst Joint Venture, manufactures high-performance, specialty, zeolite-based catalysts, used in emission control, refining and petrochemical industry applications and by the broader chemicals industry. Within the Zeolyst Joint Venture, hydrocracking catalyst sales continued to reflect demand fluctuations driven by customer order timing associated by the timing of fixed bed catalyst replacement cycles and sales of niche-custom catalysts, which tend to be event driven, continued to reflect variability in customer order patterns. We share proportionally in the management of our joint venture with the other parties to such joint venture.

### Seasonality

Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations generally result in higher sales and working capital requirements in the second and third quarters.

### Foreign Currency

As a global business, we are subject to the impact of gains and losses on currency translations, which occur when the financial statements of foreign operations are translated into U.S. dollars. We operate in various geographies with approximately 5% of our sales for the six months ended June 30, 2025 and for the year ended December 31, 2024 in currencies other than the U.S. dollar. Because our condensed consolidated financial results are reported in U.S. dollars, sales or earnings generated in currencies other than the U.S. dollar can result in a significant increase or decrease in the amount of those sales and earnings when translated to U.S. dollars. The foreign currency to which we have the most significant exchange rate exposure is the British pound.

### Results of Operations

### Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

### Highlights

The following is a summary of our financial performance for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

#### Sales

- Sales increased $17.3 million to $200.1 million. The increase in sales primarily reflects higher average selling prices from the pass-through effect of higher sulfur prices, favorable contractual pricing for regeneration services, and strong pricing in virgin sulfuric acid, as well as sales associated with the acquired Waggaman, Louisiana location, partially offset by lower sales volume for regeneration services and timing of chemical catalysts sales.

#### Gross Profit

- Gross profit decreased $4.0 million to $49.7 million. The decrease in gross profit was primarily due to lower sales volume and higher manufacturing costs, partially offset by higher average selling pricing.

#### Operating Income

- Operating income decreased by $10.1 million to $17.8 million. The decrease in operating income reflects lower gross profit and higher other operating expenses, net.

#### Equity in Net Income of Affiliated Companies

- Equity in net income of affiliated companies for the three months ended June 30, 2025 was $1.9 million, an increase of $0.5 million compared to $1.4 million for the three months ended June 30, 2024.

The following is our unaudited condensed consolidated statements of income and a summary of financial results for the three months ended June 30, 2025 and 2024:

*(in millions, except percentages)*

|  | Three months ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Sales | $200.1 | $182.8 | $17.3 | 9.5% |
| Cost of goods sold | 150.4 | 129.1 | 21.3 | 16.5% |
| Gross profit | 49.7 | 53.7 | (4.0) | (7.4)% |
| Gross profit margin | 24.8% | 29.4% |  |  |
| Selling, general and administrative expenses | 22.7 | 22.7 | — | —% |
| Other operating expense, net | 9.2 | 3.1 | 6.1 | 196.8% |
| Operating income | 17.8 | 27.9 | (10.1) | (36.2)% |
| Operating income margin | 8.9% | 15.2% |  |  |
| Equity in net (income) from affiliated companies | (1.9) | (1.4) | (0.5) | 35.7% |
| Interest expense, net | 11.1 | 12.9 | (1.8) | (14.0)% |
| Debt modification and extinguishment costs | — | 4.6 | (4.6) | (100.0)% |
| Other expense, net | 0.6 | 0.4 | 0.2 | 50.0% |
| Income before income taxes | 8.0 | 11.4 | (3.4) | (29.8)% |
| Provision for income taxes | 2.0 | 3.1 | (1.1) | (35.5)% |
| Effective tax rate | 25.6% | 27.1% |  |  |
| Net income | $6.0 | $8.3 | $(2.3) | (27.7)% |

### Sales

*(in millions, except percentages)*

| Sales: | Three months ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Ecoservices | $176.0 | $153.9 | $22.1 | 14.4% |
| Advanced Materials & Catalysts | 24.1 | 28.9 | (4.8) | (16.6)% |
| Total sales | $200.1 | $182.8 | $17.3 | 9.5% |

*Ecoservices:* Sales in Ecoservices for the three months ended June 30, 2025 were $176.0 million, an increase of $22.1 million, or 14.4%, compared to sales of $153.9 million for the three months ended June 30, 2024. The increase in sales was due to higher average selling prices of $26.3 million, partially offset by lower sales volume of $4.2 million.

The increase in average selling prices reflect the pass-through effect of higher sulfur costs, favorable contractual pricing for regeneration services, and strong pricing in virgin sulfuric acid. The impact associated with the pass-through of high sulfur costs was approximately $20 million for the three months ended June 30, 2025. The decrease in sales volume was primarily related to lower regeneration services, partially offset by the contribution of sales volume from the Waggaman location. The lower sales volume in regeneration services was driven primarily by unplanned and extended customer down-time.

*Advanced Materials & Catalysts:* Sales in Advanced Materials & Catalysts for the three months ended June 30, 2025 were $24.1 million, a decrease of $4.8 million, or 16.6%, compared to sales of $28.9 million for the three months ended June 30, 2024. The decrease of $4.8 million was primarily due to the timing of event-driven, niche custom catalysts sales.

### Gross Profit

Gross profit for the three months ended June 30, 2025 was $49.7 million, a decrease of $4.0 million, or 7.4%, compared to $53.7 million for the three months ended June 30, 2024. The decrease in gross profit was primarily due to lower sales volume and mix of $7.8 million and higher manufacturing costs of $2.5 million, exclusive of the approximately $20 million of higher sulfur costs and partially offset by higher average selling prices of $6.3 million, exclusive of the pass-through of the higher sulfur costs. The cost of sulfur is generally passed-through to customers at the same rate as incurred resulting in no net impact to gross profit.

Higher manufacturing costs were driven by general inflation, and transportation partially offset by lower turnaround costs.

### Selling, General and Administrative Expenses

Selling, general and administrative expenses were $22.7 million for the three months ended June 30, 2025 and 2024. An increase in compensation-related expenses of $0.6 million was offset by a decrease of $0.6 million in professional fees compared to the prior year.

### Other Operating Expense, Net

Other operating expense, net for the three months ended June 30, 2025 was $9.2 million, an increase of $6.1 million, compared to $3.1 million for the three months ended June 30, 2024. The increase in other operating expense, net was primarily due to an increase in other expenses, primarily related to litigation and tax charges of $2.5 million, restructuring costs of $0.9 million, transaction costs of $2.5 million, and loss on disposal of assets of $0.3 million compared to the prior year.

### Equity in Net Income of Affiliated Companies

Equity in net income of affiliated companies for the three months ended June 30, 2025 was $1.9 million, compared to $1.4 million for the three months ended June 30, 2024. The increase was due to $0.5 million of higher earnings from the Zeolyst Joint Venture during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase in earnings from the Zeolyst Joint Venture was primarily due to lower amortization of investment in affiliate step-up.

### Interest Expense, Net

Interest expense, net for the three months ended June 30, 2025 was $11.1 million, a decrease of $1.8 million, as compared to $12.9 million for the three months ended June 30, 2024. The decrease in interest expense, net was primarily due to the year over year decrease in variable rates in part due to the reduction in our spread associated with the 2025 Term Loan refinancing transactions and lower outstanding debt during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

### Debt Modification and Extinguishment Costs

Debt modification and extinguishment costs for the three months ended June 30, 2025 were zero, a decrease of $4.6 million, as compared to $4.6 million for the three months ended June 30, 2024.

On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031. The Company evaluated the terms of the amendment in accordance with *ASC 470-50 Debt - Modification and Extinguishment* and determined that the amendment was primarily a modification of debt. As a result, we recorded $4.5 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of income during the three months ended June 30, 2024. In addition, previously unamortized deferred financing costs and original issue discount of $0.1 million associated with the existing senior secured term loan facility were written off as debt extinguishment costs for the three months ended June 30, 2024.

### Other Expense, Net

Other expense, net for the three months ended June 30, 2025 was $0.6 million, an increase of $0.2 million, as compared to $0.4 million for the three months ended June 30, 2024.

### Provision For Income Taxes

The provision for income taxes for the three months ended June 30, 2025 was $2.0 million, compared to $3.1 million for the three months ended June 30, 2024. The effective income tax rate for the three months ended June 30, 2025 was 25.6%, compared to 27.1% for the three months ended June 30, 2024. The Company’s quarter over quarter effective income tax rate has fluctuated primarily due to a reduced discrete tax impact relative to pre-tax book income. The discrete tax items relate to a stock compensation shortfall, tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions, state tax law changes and a tax benefit related to state tax refunds associated with prior tax years.

The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the three months ended June 30, 2025 was mainly due to state and local taxes, shortfall tax expense related to stock compensation, state and local tax law changes, and a tax benefit related to state tax refunds associated with prior tax years.

### Net Income

For the foregoing reasons, net income was $6.0 million for the three months ended June 30, 2025, compared to $8.3 million for the three months ended June 30, 2024.

### Adjusted EBITDA

Summarized Adjusted EBITDA information is shown below in the following table:

*(in millions, except percentages)*

| Adjusted EBITDA:(1) | Three months ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Ecoservices | $49.8 | $49.7 | $0.1 | 0.2% |
| Advanced Materials & Catalysts(2) | 13.7 | 14.7 | (1.0) | (6.8)% |
| Unallocated corporate expenses | (7.8) | (7.5) | (0.3) | (4.0)% |
| Total | $55.7 | $56.9 | $(1.2) | (2.1)% |

(1) We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Adjusted EBITDA. Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.

(2) The Adjusted EBITDA for the Advanced Materials & Catalysts segment includes our 50% portion of the Adjusted EBITDA from the Zeolyst Joint Venture. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $5.7 million for the three months ended June 30, 2025, which includes $1.9 million of equity in net income, excluding $0.6 million of amortization of investment in affiliate step-up plus $3.2 million of joint venture depreciation, amortization and interest.

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $5.6 million for the three months ended June 30, 2024, which includes $1.4 million of equity in net income, excluding $0.9 million of amortization of investment in affiliate step-up plus $3.2 million of joint venture depreciation, amortization and interest.

*Ecoservices:* Adjusted EBITDA for the three months ended June 30, 2025 was $49.8 million, an increase of $0.1 million, or 0.2%, compared to $49.7 million for the three months ended June 30, 2024. The increase in Adjusted EBITDA was a result of favorable contractual pricing for regeneration services and strong pricing in virgin sulfuric acid along with lower turnaround costs, largely offset by lower regeneration services volume due to unplanned and extended customer down time and higher manufacturing costs driven by general inflation.

*Advanced Materials & Catalysts:* Adjusted EBITDA for the three months ended June 30, 2025 was $13.7 million, a decrease of $1.0 million, or 6.8%, compared to $14.7 million for the three months ended June 30, 2024. The decrease in Adjusted EBITDA was primarily driven by lower sales volume and mix due to the timing of niche custom catalysts sales.

A reconciliation of net income to Adjusted EBITDA is as follows:

*(in millions)*

| Reconciliation of net income to Adjusted EBITDA | Three months ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net income | $6.0 | $8.3 |
| Provision for income taxes | 2.0 | 3.1 |
| Interest expense, net | 11.1 | 12.9 |
| Depreciation and amortization | 23.9 | 21.6 |
| EBITDA | 43.0 | 45.9 |
| Joint venture depreciation, amortization and interest(a) | 3.2 | 3.2 |
| Amortization of investment in affiliate step-up(b) | 0.6 | 0.9 |
| Debt modification and extinguishment costs | — | 4.6 |
| Net loss on asset disposals(c) | 0.3 | — |
| Foreign currency exchange gain(d) | — | (0.1) |
| LIFO benefit(e) | (0.4) | (1.5) |
| Transaction and other related costs(f) | 2.7 | 0.1 |
| Equity-based compensation | 3.4 | 3.8 |
| Restructuring, integration and business optimization expenses(g) | 1.0 | 0.2 |
| Other(h) | 1.9 | (0.2) |
| Adjusted EBITDA | $55.7 | $56.9 |

(a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Advanced Materials & Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.

(b) Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016. We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of the Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with intangible assets, including customer relationships and technical know-how.

(c) When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use.

(d) Reflects the exclusion of the foreign currency transaction gains and losses in the condensed consolidated statements of income related to the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt, denominated in foreign currency.

(e) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, effectively reflecting the results as if these inventories were valued using the FIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.

(f) Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations.

(g) Includes the impact of restructuring, integration and business optimization expenses, which are incremental costs that are not representative of our ongoing business operations.

(h) Other consists of adjustments for items that are not core to our ongoing business operations. These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen. Also included in this amount are adjustments to eliminate the benefit realized in cost of goods sold of the allocation of a portion of the contract manufacturing payments under the five-year agreement with the buyer of the Performance Chemicals business to the financing obligation under the failed sale-leaseback. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions).

### Adjusted Net Income

Summarized Adjusted Net Income information is shown below in the following table:

*(in millions)*

| Reconciliation of net income to Adjusted Net Income(1)(2) | Three months ended June 30, 2025 Pre-tax amount | Tax expense (benefit) | After-tax amount | 2024 Pre-tax amount | Tax expense (benefit) | After-tax amount |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net income | $8.0 | $2.0 | $6.0 | $11.4 | $3.1 | $8.3 |
| Amortization of investment in affiliate step-up(b) | 0.6 | 0.1 | 0.5 | 0.9 | 0.2 | 0.7 |
| Debt modification and extinguishment costs | — | — | — | 4.6 | 1.2 | 3.4 |
| Net loss on asset disposals(c) | 0.3 | 0.1 | 0.2 | — | — | — |
| Foreign currency exchange gain(d) | — | — | — | (0.1) | — | (0.1) |
| LIFO benefit(e) | (0.4) | (0.1) | (0.3) | (1.5) | (0.3) | (1.2) |
| Transaction and other related costs(f) | 2.7 | 0.6 | 2.1 | 0.1 | — | 0.1 |
| Equity-based compensation | 3.4 | 0.4 | 3.0 | 3.8 | 0.9 | 2.9 |
| Restructuring, integration and business optimization expenses(g) | 1.0 | 0.2 | 0.8 | 0.2 | 0.1 | 0.1 |
| Other(h) | 1.9 | 0.5 | 1.4 | (0.2) | (0.1) | (0.1) |
| Adjusted Net Income | $17.5 | $3.8 | $13.7 | $19.2 | $5.1 | $14.1 |

(1) We define Adjusted Net Income as net income adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted Net Income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted Net Income may not be comparable with net income or Adjusted Net Income as defined by other companies.

(2) Refer to the Adjusted EBITDA notes above for more information with respect to each adjustment.

The adjustments to net income are shown net of applicable tax rates as determined by the calculation of our quarterly tax provision under interim financial reporting for the three months ended June 30, 2025 and June 30, 2024, except for equity-based compensation. The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec. 162(m) and adding the tax effect of equity-based stock compensation shortfall recorded as a discrete item.

### Results of Operations

### Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

### Highlights

The following is a summary of our financial performance for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

#### Sales

- Sales increased $18.9 million to $362.3 million. The increase in sales was due to higher average selling prices, primarily as a result of the pass-through of higher sulfur costs, partially offset by lower sales volume in Ecoservices.

#### Gross Profit

- Gross profit decreased $17.6 million to $75.3 million. The decrease in gross profit was primarily due to lower sales volume and higher manufacturing costs, partially offset by higher average selling prices.

#### Operating Income

- Operating income decreased by $24.9 million to $16.9 million. The decrease in operating income was due to a decrease in gross profit and higher other operating expense, net, partially offset by lower selling, general and administrative expenses.

#### Equity in Net Income of Affiliated Companies

- Equity in net income of affiliated companies for the six months ended June 30, 2025 was $10.8 million, compared to $3.5 million for the six months ended June 30, 2024. The increase of $7.3 million was due to higher earnings from the Zeolyst Joint Venture during the six months ended June 30, 2025, driven by higher sales volume.

The following is our unaudited condensed consolidated statements of income and a summary of financial results for the six months ended June 30, 2025 and 2024:

*(in millions, except percentages)*

|  | Six months ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Sales | $362.3 | $343.4 | $18.9 | 5.5% |
| Cost of goods sold | 287.0 | 250.5 | 36.5 | 14.6% |
| Gross profit | 75.3 | 92.9 | (17.6) | (18.9)% |
| Gross profit margin | 20.8% | 27.1% |  |  |
| Selling, general and administrative expenses | 44.0 | 44.3 | (0.3) | (0.7)% |
| Other operating expense, net | 14.4 | 6.8 | 7.6 | 111.8% |
| Operating income | 16.9 | 41.8 | (24.9) | (59.6)% |
| Operating income margin | 4.7% | 12.2% |  |  |
| Equity in net (income) from affiliated companies | (10.8) | (3.5) | (7.3) | 208.6% |
| Interest expense, net | 22.1 | 26.3 | (4.2) | (16.0)% |
| Debt modification and extinguishment costs | 1.0 | 4.6 | (3.6) | (78.3)% |
| Other expense, net | 0.7 | 0.6 | 0.1 | 16.7% |
| Income before income taxes | 3.9 | 13.8 | (9.9) | (71.7)% |
| Provision for income taxes | 1.5 | 4.3 | (2.8) | (65.1)% |
| Effective tax rate | 38.8% | 30.9% |  |  |
| Net income | $2.4 | $9.5 | $(7.1) | (74.7)% |

41

### Sales

*(in millions, except percentages)*

| Sales: | Six months ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Ecoservices | $319.1 | $295.6 | $23.5 | 7.9% |
| Advanced Materials & Catalysts | 43.2 | 47.8 | (4.6) | (9.6)% |
| Total sales | $362.3 | $343.4 | $18.9 | 5.5% |

*Ecoservices:* Sales in Ecoservices for the six months ended June 30, 2025 were $319.1 million, an increase of $23.5 million, or 7.9%, compared to sales of $295.6 million for the six months ended June 30, 2024. The increase in sales reflects higher average selling prices of $32.3 million, including the pass-through effect of higher sulfur costs of approximately $27 million, partially offset by lower sales volume of $8.8 million.

Average selling prices were higher primarily due to the pass-through effect of higher sulfur costs, favorable contract pricing for regeneration services and strong pricing in virgin sulfuric acid. Sales volume of virgin sulfuric acid and regeneration services were lower for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, driven by unplanned and extended customer down-time and maintenance turnaround activity at our facilities, partially offset by the contribution of sales volume from the Waggaman location.

*Advanced Materials & Catalysts:* Sales in Advanced Materials & Catalysts for the six months ended June 30, 2025 were $43.2 million, a decrease of $4.6 million, or 9.6%, compared to sales of $47.8 million for the six months ended June 30, 2024. The change in sales was primarily due to the timing of niche custom catalysts sales and lower sales of advanced silicas used for the production of polyethylene compared to the six months ended June 30, 2024.

### Gross Profit

Gross profit for the six months ended June 30, 2025 was $75.3 million, a decrease of $17.6 million, or 18.9%, compared to $92.9 million for the six months ended June 30, 2024. The decrease in gross profit was primarily driven by lower sales volume of $10.2 million and higher manufacturing costs of $12.7 million, exclusive of the approximately $27 million of higher sulfur costs, partially offset by higher average selling prices of $5.3 million, exclusive of the pass-through of higher sulfur costs. The cost of sulfur is generally passed-through to customers at the same rate as incurred resulting in no net impact to gross profit.

Higher manufacturing costs were driven by general inflation, maintenance and transportation, along with additional fixed costs from the Waggaman location.

### Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2025 were $44.0 million, a decrease of $0.3 million, as compared to $44.3 million for the six months ended June 30, 2024. The decrease in selling, general and administrative expenses was mainly due to a decrease in stock compensation of $1.0 million and professional fees of $1.1 million, partially offset by an increase in other compensation-related expenses of $1.1 million and other expenses of $0.7 million.

### Other Operating Expense, Net

Other operating expense, net for the six months ended June 30, 2025 was $14.4 million, an increase of $7.6 million, compared to $6.8 million for the six months ended June 30, 2024. The increase in other operating expense, net was mainly driven by an increase in transaction costs of $4.3 million, restructuring costs of $0.8 million, and other costs of $2.7 million primarily related to legal and tax charges.

### Equity in Net Income of Affiliated Companies

Equity in net income of affiliated companies for the six months ended June 30, 2025 was $10.8 million, an increase of $7.3 million compared to $3.5 million for the six months ended June 30, 2024. The increase in earnings from the Zeolyst Joint Venture was driven by higher hydrocracking catalyst and specialty catalyst sales, partially offset by lower sales of catalysts used in emission control and customized catalyst applications during the six months ended June 30, 2025 compared to the prior year.

### Interest Expense, Net

Interest expense, net for the six months ended June 30, 2025 was $22.1 million, a decrease of $4.2 million, as compared to $26.3 million for the six months ended June 30, 2024. The decrease in interest expense, net was primarily due to the year over year decrease in variable rates in part due to the reduction in our spread associated with the 2025 Term Loan refinancing transactions and lower outstanding debt during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, partially offset by lower benefit from our interest rate caps.

### Debt Modification and Extinguishment Costs

Debt modification and extinguishment costs for the six months ended June 30, 2025 were $1.0 million, a decrease of $3.6 million, as compared to $4.6 million for the six months ended June 30, 2024.

On January 30, 2025, we amended our existing senior secured term loan facility to reduce the applicable interest rates. The Company evaluated the terms of the amendment in accordance with *ASC 470-50 Debt - Modification and Extinguishment* and determined that the amendment was a modification of debt. As a result, we recorded $1.0 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of income during the six months ended June 30, 2025.

On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031. The Company evaluated the terms of the amendment in accordance with *ASC 470-50 Debt - Modification and Extinguishment* and determined that the amendment was primarily a modification of debt. As a result, we recorded $4.5 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of income during the six months ended June 30, 2024. In addition, previously unamortized deferred financing costs and original issue discount of $0.1 million associated with the existing senior secured term loan facility were written off as debt extinguishment costs for the six months ended June 30, 2024.

### Other Expense, Net

Other expense, net for the six months ended June 30, 2025 was $0.7 million, an increase of $0.1 million, as compared to $0.6 million for the six months ended June 30, 2024.

### Provision For Income Taxes

The provision for income taxes for the six months ended June 30, 2025 was $1.5 million, compared to a $4.3 million provision for income taxes for the six months ended June 30, 2024. The effective income tax rate for the six months ended June 30, 2025 was 38.8%, compared to 30.9% for the six months ended June 30, 2024.

The Company’s effective income tax rate for the six months ended June 30, 2025 and 2024, respectively, fluctuated primarily due to the increased tax impact related to a stock compensation shortfall, state tax law changes, and state tax refunds associated with prior tax years.

The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the six months ended June 30, 2025 was mainly due to state and local taxes, shortfall tax expense related to stock compensation, state and local tax law changes, and a tax benefit related to state tax refunds associated with prior tax years.

### Net Income

For the foregoing reasons, net income was $2.4 million for the six months ended June 30, 2025, compared to $9.5 million for the six months ended June 30, 2024.

### Adjusted EBITDA

Summarized Adjusted EBITDA information is shown below in the following table:

*(in millions, except percentages)*

| Adjusted EBITDA(1) | Six months ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Ecoservices | $78.3 | $91.2 | $(12.9) | (14.1)% |
| Advanced Materials & Catalysts(2) | 31.2 | 25.8 | 5.4 | 20.9% |
| Unallocated corporate expenses | (14.9) | (14.6) | (0.3) | (2.1)% |
| Total | $94.6 | $102.4 | $(7.8) | (7.6)% |

(1) We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Adjusted EBITDA. Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.

(2) The Adjusted EBITDA for the Advanced Materials & Catalysts segment includes our 50% portion of the Adjusted EBITDA from the Zeolyst Joint Venture. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $18.4 million for the six months ended June 30, 2025, which includes $10.8 million of equity in net income, excluding $1.2 million of amortization of investment in affiliate step-up plus $6.3 million of joint venture depreciation, amortization and interest.

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $12.5 million for the six months ended June 30, 2024, which includes $3.5 million of equity in net income, excluding $2.5 million of amortization of investment in affiliate step-up plus $6.5 million of joint venture depreciation, amortization and interest.

*Ecoservices:* Adjusted EBITDA for the six months ended June 30, 2025 was $78.3 million, a decrease of $12.9 million, or 14.1%, compared to $91.2 million for the six months ended June 30, 2024. The decrease in Adjusted EBITDA was driven by lower volumes in both regeneration services and virgin sulfuric acid, driven by unplanned and extended customer down-time and maintenance turnaround activity at our facilities and higher manufacturing costs driven by general inflation, maintenance and transportation, partially offset by favorable contractual pricing in regeneration services and strong pricing in virgin sulfuric acid.

*Advanced Materials & Catalysts:* Adjusted EBITDA for the six months ended June 30, 2025 was $31.2 million, an increase of $5.4 million or 20.9%, compared to $25.8 million for the six months ended June 30, 2024. The increase in Adjusted EBITDA was primarily a result of higher sales volume within the Zeolyst Joint Venture driven by higher hydrocracking catalyst and specialty catalyst sales, partially offset by lower sales of catalysts used in emission control and customized catalyst applications.

A reconciliation of net income to Adjusted EBITDA is as follows:

*(in millions)*

| Reconciliation of net income to Adjusted EBITDA | Six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net income | $2.4 | $9.5 |
| Provision for income taxes | 1.5 | 4.3 |
| Interest expense, net | 22.1 | 26.3 |
| Depreciation and amortization | 47.1 | 43.6 |
| EBITDA | 73.1 | 83.7 |
| Joint venture depreciation, amortization and interest(a) | 6.3 | 6.5 |
| Amortization of investment in affiliate step-up(b) | 1.2 | 2.5 |
| Debt modification and extinguishment costs | 1.0 | 4.6 |
| Net loss on asset disposals(c) | 0.4 | 0.6 |
| Foreign currency exchange loss(d) | 0.1 | 0.1 |
| LIFO benefit(e) | (1.2) | (2.7) |
| Transaction and other related costs(f) | 4.5 | 0.2 |
| Equity-based compensation | 6.5 | 7.5 |
| Restructuring, integration and business optimization expenses(g) | 1.2 | 0.4 |
| Other(h) | 1.5 | (1.0) |
| Adjusted EBITDA | $94.6 | $102.4 |

(a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Advanced Materials & Catalysts segment reflects our 50% portion of the earnings from the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.

(b) Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016. We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of the Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with intangible assets, including customer relationships and technical know-how.

(c) When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use.

(d) Reflects the exclusion of the foreign currency transaction gains and losses in the condensed consolidated statements of income related to the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt, denominated in foreign currency.

(e) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, effectively reflecting the results as if these inventories were valued using the FIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.

(f) Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations.

(g) Includes the impact of restructuring, integration and business optimization expenses, which are incremental costs that are not representative of our ongoing business operations.

(h) Other consists of adjustments for items that are not core to our ongoing business operations. These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen. Also included in this amount are adjustments to eliminate the benefit realized in cost of goods sold of the allocation of a portion of the contract manufacturing payments under the five-year agreement with the buyer of the Performance Chemicals business to the financing obligation under the failed sale-leaseback. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions).

### Adjusted Net Income

Summarized Adjusted Net Income information is shown below in the following table:

*(in millions)*

| Reconciliation of net income to Adjusted Net Income(1)(2) | Six months ended June 30, 2025 Pre-tax amount | Tax expense (benefit) | After-tax amount | 2024 Pre-tax amount | Tax expense (benefit) | After-tax amount |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Net income | $3.9 | $1.5 | $2.4 | $13.8 | $4.3 | $9.5 |
| Amortization of investment in affiliate step-up(b) | 1.2 | 0.3 | 0.9 | 2.5 | 0.6 | 1.9 |
| Debt modification and extinguishment costs | 1.0 | 0.2 | 0.8 | 4.6 | 1.2 | 3.4 |
| Net loss on asset disposals(c) | 0.4 | 0.1 | 0.3 | 0.6 | 0.1 | 0.5 |
| Foreign currency exchange loss(d) | 0.1 | — | 0.1 | 0.1 | — | 0.1 |
| LIFO benefit(e) | (1.2) | (0.3) | (0.9) | (2.7) | (0.7) | (2.0) |
| Transaction and other related costs(f) | 4.5 | 1.1 | 3.4 | 0.2 | 0.1 | 0.1 |
| Equity-based compensation | 6.5 | 0.3 | 6.2 | 7.5 | 1.4 | 6.1 |
| Restructuring, integration and business optimization expenses(g) | 1.2 | 0.3 | 0.9 | 0.4 | 0.1 | 0.3 |
| Other(h) | 1.5 | 0.4 | 1.1 | (1.0) | (0.3) | (0.7) |
| Adjusted Net Income | $19.1 | $3.9 | $15.2 | $26.0 | $6.8 | $19.2 |

(1) We define Adjusted Net Income as net income adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted Net Income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted Net Income may not be comparable with net income or Adjusted Net Income as defined by other companies.

(2) Refer to the Adjusted EBITDA notes above for more information with respect to each adjustment.

The adjustments to net income are shown net of applicable tax rates of 23.8% and 25.1% for the six months ended June 30, 2025 and 2024, respectively, except for equity-based compensation. The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec. 162(m), and adding the tax effect of equity-based stock compensation shortfall recorded as a discrete item.

### Financial Condition, Liquidity and Capital Resources

Our primary sources of liquidity consist of cash flows from operations, existing cash balances as well as funds available under our asset based lending revolving credit facility (“ABL Facility”). We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources of funds. Our primary liquidity requirements include funding working capital requirements (primarily inventory and accounts receivable, net of accounts payable and other accrued liabilities), debt service requirements and capital expenditures. Our capital expenditures include both maintenance of business, which include spending on maintenance and health, safety and environmental initiatives as well as growth, which includes spending to drive organic sales growth and cost savings initiatives.

We believe that our existing cash and cash equivalents and cash flows from operations, combined with availability under our ABL Facility, will be sufficient to meet our presently anticipated future cash needs for at least the next twelve months. We may also pursue strategic acquisition or divestiture opportunities, which may impact our future cash requirements. We may, from time to time, increase borrowings under our ABL Facility to meet our future cash needs. As of June 30, 2025, we had cash and cash equivalents of $69.6 million and availability of $82.9 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $152.5 million. We did not have any revolving credit facility borrowings as of June 30, 2025. As of June 30, 2025, we were in compliance with all covenants under our debt agreements.

Prior to April 10, 2025, our ABL Facility had one financial covenant with two ratios to maintain. The first ratio compared the total ABL availability against a threshold: the greater of 10% of the line cap (which was defined as the lesser of our revolving loan commitments and the value of our assets) or $10.0 million. The greater of this threshold could not be greater than the total availability of the ABL Facility. The second ratio compared the ABL Facility availability of the U.S. revolving credit facility against a $7.5 million threshold. As of June 30, 2025, we were in compliance with the financial covenant under the ABL Facility. On April 10, 2025, we amended the ABL Facility to, among other things, reallocate all European revolving loan commitments thereunder as U.S. revolving loan commitments. As a result of the amendment, on and after April 10, 2025, the U.S. revolving credit facility comprises all availability of the ABL Facility, and we are only required to comply with the first ratio described above.

The 2025 Term Loan Facility and the ABL Facility contain various restrictive covenants. Each limits the ability of the Company and its restricted subsidiaries to incur certain indebtedness or liens, merge, consolidate or liquidate, dispose of certain property, make investments or declare or pay dividends, make optional payments, modify certain debt instruments, enter into certain transactions with affiliates, enter into certain sales and leasebacks and certain other non-financial restrictive covenants. During such time, the Company is required to maintain a fixed-charge coverage ratio of at least 1.0 to 1.0. The Company was in compliance with all debt covenants under the 2025 Term Loan Facility and the ABL Facility as of June 30, 2025.

Included in our cash and cash equivalents balance as of June 30, 2025 was $9.4 million of cash and cash equivalents in foreign jurisdictions. Depending on foreign cash balances, we have certain flexibility to repatriate funds should the need arise. Should the need arise, we would repatriate the funds in the most tax efficient manner from those subsidiaries. Repatriation of foreign cash is generally not subject to U.S. federal income taxes at the time of cash distribution. However, foreign earnings may still be taxed for state income tax purposes, as well as subject to certain foreign withholding tax obligations, when cash amounts are distributed back to the U.S.

Our liquidity requirements include interest payments related to our debt structure. As reported, our cash interest paid for the six months ended June 30, 2025 and 2024 was approximately $23.4 million and $33.2 million, respectively. Before any impact of hedges, a one percent change in assumed interest rates for our variable interest credit facilities would have an annual impact of approximately $8.7 million on interest expense.

We hedge the interest rate fluctuations on debt obligations through interest rate cap agreements. For more information about our interest rate cap agreements, refer to Note 12 — Financial Instruments of our condensed consolidated financials statements included in Part 1, Item 1 — Financial Statements (Unaudited).

### Off-Balance Sheet Arrangements

The Company’s off-balance sheet arrangements include $3.3 million of outstanding letters of credit on our ABL Facility as of June 30, 2025.

### Cash Flow

*(in millions)*

| Net cash provided by (used in): | Six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $43.3 | $46.4 |
| Investing activities | (90.8) | (36.8) |
| Financing activities | (29.4) | (14.4) |
| Effect of exchange rate changes on cash and cash equivalents | 0.5 | (0.3) |
| Net change in cash and cash equivalents | (76.4) | (5.1) |
| Cash and cash equivalents at beginning of period | 146.0 | 88.4 |
| Cash and cash equivalents at end of period | $69.6 | $83.3 |

Net cash provided by operating activities was $43.3 million for the six months ended June 30, 2025, compared to $46.4 million for the six months ended June 30, 2024. Cash generated by operating activities, other than changes in working capital, was lower by $24.7 million during the six months ended June 30, 2025, as compared to the same period in the prior year primarily due to lower dividends received from the Zeolyst Joint Venture and lower earnings. The increase in cash from working capital during the six months ended June 30, 2025 of $21.6 million was favorable compared to the six months ended June 30, 2024 primarily due to favorable changes in accrued liabilities, accounts payable and prepaids and other current assets, partially offset by unfavorable changes in receivables.

The favorable change in accrued liabilities mainly relates to the timing of payments for interest and other expenses. The favorable change in accounts payable was due to the timing of vendor payments. The favorable change in prepaid and other current assets primarily relates to the timing of non-trade receivables from related parties. The unfavorable change in receivables was driven by the timing of collection of sales.

Net cash used in investing activities was $90.8 million for the six months ended June 30, 2025, compared to $36.8 million during the same period in 2024. Net cash used in investing activities primarily consisted of $49.5 million and $36.6 million to fund capital expenditures during the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025, we acquired the sulfuric acid production assets of Cornerstone Chemical Company LLC located at Waggaman, Louisiana for $41.3 million.

Net cash used in financing activities was $29.4 million for the six months ended June 30, 2025, compared to $14.4 million during the same period in 2024. The unfavorable change in net cash used in financing activities was primarily driven by higher repurchases of the Company’s common stock during the during the six months ended June 30, 2025.

### Debt

*(in millions)*

|  | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| 2025 Term Loan Facility | $866.5 | $870.8 |
| ABL Facility | — | — |
| Total debt | 866.5 | 870.8 |
| Original issue discount | (6.7) | (7.2) |
| Deferred financing costs | (3.1) | (2.8) |
| Total debt, net of original issue discount and deferred financing costs | 856.7 | 860.8 |
| Less: current portion | (8.7) | (8.7) |
| Total long-term debt, excluding current portion | $848.0 | $852.1 |

As of June 30, 2025, our total debt was $866.5 million, excluding the original issue discount of $6.7 million and deferred financing costs of $3.1 million for our senior secured credit facilities. Our net debt as of June 30, 2025 was $796.9 million, which reflects our total debt less cash and cash equivalents of $69.6 million. We may seek, subject to market conditions and other factors, opportunities to repurchase, refinance or otherwise reprice our debt.

### Capital Expenditures

Maintenance capital expenditures include spending on maintenance of business, health, safety and environmental initiatives. Growth capital expenditures include spending to drive organic sales growth and cost savings initiatives. These capital expenditures represent our “book” capital expenditures for which the Company has recorded, but not necessarily paid for the capital expenditures.

*(in millions)*

|  | Six months ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Maintenance capital expenditures | $36.5 | $28.3 |
| Growth capital expenditures | 9.4 | 5.2 |
| Total capital expenditures | $45.9 | $33.5 |

Capital expenditures remained at a level sufficient for required maintenance and certain expansion growth initiatives during these periods. Maintenance capital expenditures were higher in the six months ended June 30, 2025, compared to the six months ended June 30, 2024 due to turnaround activities in 2025. Growth capital expenditures were higher in the six months ended June 30, 2025, compared to the six months ended June 30, 2024 primarily due to the planned expansion of the Kansas City, Kansas silica catalyst production facility as well as infrastructure upgrades and capacity optimization at our West Orange, Texas facility.

### Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in conformity with GAAP and our significant accounting policies are described in Note 2 to our audited consolidated financial statements included in our Annual Report on Form 10-K. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. We base our estimates and judgments on historical experience and other relevant factors 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 are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While there has been no material change in our critical accounting policies and use of estimates from those described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K, we continually evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis. The Company completes its annual goodwill and indefinite-lived intangible assets impairment test during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment. The Company determines the fair value of its reporting units using both a market approach and an income, or discounted cash flow, approach. As of October 1, 2024, the date of the Company’s most recent quantitative assessments, the fair values of each of the Company’s reporting units and the fair values of the Company’s indefinite-lived trade names and trademarks exceeded their respective carrying values.

During the six months ended June 30, 2025, the Company did not identify any events or circumstances that would more likely than not reduce the fair value of the Company’s reporting units or intangible assets below their respective carrying values.

The estimated fair value of the Advanced Materials & Catalysts reporting unit exceeded its carrying value on October 1, 2024 by over 15%. Prolonged unfavorable effects or results of the current strategic review could adversely impact the estimated fair value of the Advanced Materials & Catalysts reporting unit in future periods and may result in impairment charges.

### Accounting Standards Not Yet Adopted

See Note 2 to our unaudited condensed consolidated financial statements for a discussion of recently issued accounting standards and their effect on us.

## Market risk

As filed, 707 characters.

Our major market risk exposure is potential losses arising from changing rates and prices regarding foreign currency exchange rate risk, interest rate risk and credit risk. The audit committee of our board of directors regularly reviews foreign exchange and interest rate activity, and monitors compliance with our hedging policy. We do not use financial instruments for speculative purposes, and we limit our hedging activity to the underlying economic exposure.

There have been no material changes in the foreign currency exchange rate risk, interest rate risk or credit risk discussed in Item 7A., “Quantitative and Qualitative Disclosures about Market Risk,” included in our Annual Report on Form 10-K.

## Controls and procedures

As filed, 4,539 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were not effective due to the material weakness in the Company’s internal control over financial reporting, as described below and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Notwithstanding the conclusion that the Company’s disclosure controls and procedures were not effective as of June 30, 2025, our Chief Executive Officer and Chief Financial Officer believe that the Company’s unaudited condensed consolidated financial statements included in this Quarterly Report are fairly stated in all material respects in accordance with U.S. generally accepted accounting principles for each of the periods presented.

### Material Weakness in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

A material weakness in relation to the Company’s controls over the accounting of its Zeolyst Joint Venture was identified as of December 31, 2024 and continues to exist as of June 30, 2025. The Company does not have sufficient controls designed to ensure its proportionate share of the earnings from the Zeolyst Joint Venture, an equity method investee underlying the Company’s financial statements, were completely, accurately, and timely recorded. This material weakness resulted in immaterial adjustments to our equity in net income from affiliated companies and investments in affiliated companies as of and for the fiscal years ended December 31, 2024, 2023 and 2022, and for the interim periods contained within those fiscal years. This material weakness could result in a material misstatement of our equity in net income from affiliated companies and investments in affiliated companies that would not be prevented or detected on a timely basis.

### Plan for Remediation of Material Weakness

We are in the process of developing a plan to remediate the material weakness. Our plan will include designing and implementing appropriate controls designed to ensure our proportionate share of the earnings from the Zeolyst Joint Venture are completely, accurately, and timely recorded in our financial statements. This material weakness will not be considered remediated until the applicable controls are designed, implemented and operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

### Changes in Internal Control Over Financial Reporting

No changes in our internal control over financial reporting occurred during the quarter ended June 30, 2025 that materially affected, or which are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 203 characters.

“Item 1A, Risk Factors” in our Annual Report on Form 10-K includes a discussion of our risk factors. There have been no material changes from the risk factors described in our Annual Report on Form 10-K.

Filed Aug 7, 2025.
Source: SEC EDGAR, the filing index for accession 0001708035-25-000108. Last ingested by Listed: Nov 5, 2026, 16:25 ET. No prices; not investment advice.