What changed in this filing

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Item 1. Business

2024-04-01 compared with 2023-03-31 · 26 added, 37 removed, 66 unchanged (49% of the section changed)

Ascent Industries Co.

is an industrials company focused on the production and distribution of industrial tubular products including stainless steel and galvanized pipe and tube, seamless carbon pipe and tube, and specialty chemicals.

is a diverse industrials company focused on the production of stainless steel pipe and tube and specialty chemicals.

Ascent Industries Co.

5 unchanged sentences

The Company's business is divided into two reportable operating segments, Tubular Products and Specialty Chemicals.

The Tubular Products segment serves markets through pipe and tube and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other industries.

The Tubular Products segment serves markets through pipe and tube production and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other industries.

The Specialty Chemicals segment produces specialty products for the pulp and paper, coatings, adhesives, sealants and elastomers (CASE), textile, automotive, household, industrial and institutional ("HII"), agricultural, water and waste-water treatment, construction, oil and gas and other industries.

Tubular Products – Tubular Products is comprised of BRISMET, located in Bristol, Tennessee and Munhall, Pennsylvania;

ASTI, located in Troutman and Statesville, North Carolina;

Palmer, located in Andrews, Texas;

and Specialty, located in Mineral Ridge, Ohio and Houston, Texas.

Tubular Products – Tubular Products is comprised of BRISMET, located in Bristol, Tennessee and ASTI, located in Troutman and Statesville, North Carolina.

BRISMET manufactures welded pipe and tube, primarily from stainless steel, duplex, and nickel alloys.

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BRISMET is one of the few domestic producers capable of making pipe in 48-foot lengths up to 36 inches in diameter.

Additionally, BRISMET's Munhall facility manufactures ornamental stainless tube and galvanized carbon tube, as well as similar stainless pipe products as produced at the Bristol facility.

As of December 31, 2022, the Company made the decision to pursue an exit of the galvanized steel pipe and tube business at its Munhall facility.

The Company is in the process of winding down operations and expects to permanently cease the production of galvanized steel pipe and tube in the first half of 2023.

ASTI is a leading manufacturer of high-end ornamental stainless steel tube, supplying the automotive, commercial transportation, marine, food services, construction, furniture, healthcare, and other industries.

2 unchanged sentences

ASTI's product range includes a variety of shapes, including rounds, squares, rectangles and ellipticals up to 5 inches outside diameter.

Palmer is a manufacturer of fiberglass and steel storage tanks for the oil and gas, waste water treatment and municipal water industries.

As of December 31, 2021, the Company permanently ceased operations and is in the process of divesting all remaining assets at the facility.

The operating results of our Palmer business in Andrews, Texas, currently held for sale, are included within the Tubular Products segment for all periods presented in this annual report.

Palmer will be removed from the segment beginning in the first quarter of 2023.

Specialty is a leading master distributor of hot finish, seamless, carbon steel pipe and tube, with an emphasis on large outside diameters and exceptionally heavy wall thickness.

Specialty's products are primarily used for mechanical and high-pressure applications in the oil and gas, heavy industrial, construction equipment, and chemical and other industries.

Operating from facilities located in Mineral Ridge, Ohio and Houston, Texas, Specialty is well-positioned to serve the major industrial and energy regions in the United States.

Specialty performs value-added processing on a majority of products shipped and

typically processes and ships orders in 24 hours or less.

Specialty plays a critical role in the domestic supply chain, by maintaining a diverse inventory of hard to find sizes of pipe and tube that support critical infrastructure applications across the United States.

The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 65% of total purchases are from its top 5 suppliers.

The Company does not anticipate that the loss of this supplier would have a materially adverse effect on the Company as raw materials are readily available from a number of different sources, and the Company anticipates no difficulties in fulfilling its requirements.

The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 54% of total raw material purchases are from its top 5 suppliers.

The Company does not anticipate that the loss of a supplier would have a materially adverse effect on the Company as raw materials are readily available from a number of different sources, and the Company anticipates no difficulties in fulfilling its requirements.

Specialty Chemicals – Specialty Chemicals consists of the Company's three production facilities located in Cleveland, Tennessee, Fountain Inn, South Carolina and Danville, Virginia.

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The segment has long-term relationships with a number of leading chemical companies that outsource their manufacturing production to our production facilities allowing those customers to reach their target markets quicker.

The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 31% of total purchases are from its top 5 suppliers.

The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 32% of total raw material purchases are from its top 5 suppliers.

While some raw material needs are met by an individual supplier or only a few suppliers, the Company anticipates no difficulties in fulfilling its raw material requirements.

2 unchanged sentences

The segment's products are sold to various distributors, OEM and end use customers.

There were no customers representing more than 10% of the Tubular Products segment's revenues for 2022 or 2021, respectively.

The Tubular Products segment has one customer that accounted for approximately 17% of the segment's revenues for 2023.

There were no customers representing more than 10% of the Tubular Products segment's revenues for 2022.

Specialty Chemicals – Specialty chemicals are sold directly to various industries nationwide by sales representatives comprised of outside sales employees and independent manufacturers' representatives.

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The Company is committed to a long-term strategy of reinvesting capital in our current business segments to foster organic growth and completing acquisitions that expand our manufacturing capabilities, product offerings and geographic footprint.

On October 22, 2021, the Company completed the acquisition of all of the issued and outstanding shares of common stock of DanChem Technologies, Inc.

The purpose of the transaction was to accelerate product development capabilities and provide entrance into new end-markets and applications within the Specialty Chemicals segment.

The purchase price was $32.95 million before adjustments for working capital, transaction expenses, cash and debt.

The tangible assets purchased and liabilities assumed from DanChem included accounts receivable, inventory, equipment, real property and accounts payable.

See Note 2 for additional information on the DanChem acquisition.

The Company may, from time-to-time, divest or close businesses in an effort to better align capital investment within its core operations, increase operational efficiencies and improve profitability.

During the second quarter of 2023, the Company's Board of Directors made the decision to cease operations at BRISMET's Munhall facility.

The Company ceased operations at this facility effective August 31, 2023.

It is anticipated that the complete exit and disposal of all assets at the Munhall facility will be completed within one year from the date the decision was made to cease operations.

The Munhall facility has been classified as a discontinued operation for all periods presented and was formerly a component within the Tubular Products segment.

On December 22, 2023, the Company and its wholly-owned subsidiary Specialty Pipe & Tube, Inc.

(“SPT”) entered into an Asset Purchase Agreement pursuant to which Ascent and SPT sold substantially all of the assets primarily related to SPT to Specialty Pipe & Tube Operations, LLC, a Delaware limited liability company.

The consideration for the transaction was approximately $55 million of cash proceeds subject to certain closing adjustments.

The transaction closed on December 22, 2023.

Ascent and Purchaser also entered into a Transition Services Agreement (the “TSA”) and an Employee Leasing Agreement (the “ELA”) each dated December 22, 2023, pursuant to which Ascent has agreed to provide certain transition services and to lease certain employees to Purchaser immediately after the closing for certain agreed upon transition periods.

SPT has been classified as a discontinued operation for all periods presented and was formerly a reporting unit within the Tubular Products segment.

Environmental

1 unchanged sentence

Liabilities are recorded when environmental assessments and/or cleanups are probable and the costs of these assessments and/or cleanups can be reasonably estimated.

Changes to laws and environmental issues, including climate change, are made or proposed with some frequency and some of the proposals, if adopted, might directly or

indirectly result in a material reduction in the operating results of one or more of our operating units.

Changes to laws and environmental issues, including climate change, are made or proposed with some frequency and some of the proposals, if adopted, might directly or indirectly result in a material reduction in the operating results of one or more of our operating units.

We are presently unable to quantify this risk.

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Factors that may affect our ability to attract and retain qualified employees include competition from other employers, availability of qualified individuals and opportunities for employee growth.

As of December 31, 2022, the Company had 698 employees, all of which were full-time employees.

As of December 31, 2023, the Company had 517 employees, 514 of which were full-time employees.

The Company considers relations with employees to be strong.

The number of employees of the Company represented by unions, located at the Munhall, Pennsylvania, Mineral Ridge, Ohio, Bristol, Tennessee and Danville, Virginia facilities, is 334, or 48% of the Company's employees.

They are represented by three locals affiliated with the United Steelworkers (the "USW") and one local affiliated with the United Food and Commercial Workers (the "UFCW").

Collective bargaining contracts for the USW locals expire at various dates between 2023 and 2024.

Collective bargaining contracts for the UFCW local expires in 2024.

The number of employees of the Company represented by unions is 214, or 41% of the Company's employees.

They are represented by locals affiliated with the United Steelworkers (the "USW") and the United Food and Commercial Workers (the "UFCW").

Collective bargaining contracts for the USW and UFCW locals expire at various dates in 2024.

Our voluntary turnover rate in 2023 was approximately 22%.

1 unchanged sentence

The average employee tenure is approximately 10 years.

We believe our competitive total rewards package offered to employees and development opportunities help attract talent and promotes longer employee tenure.

Total Rewards

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The SEC maintains a site on the internet at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The Company also makes its filings available, free of charge, through its website at www.ascentco.com as soon as reasonably practical after the electronic filing of such material with the SEC.

The Company also makes its filings available, free of charge, through its website at www.ascentco.com as soon as reasonably practical after the electronic filing

of such material with the SEC.

The information on the Company's website is not incorporated into this Annual Report on Form 10-K or any other filing the Company makes with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business