What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-03 · 289 added, 96 removed, 262 unchanged (60% of the section changed)

6 unchanged sentences

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 repurchasing, refinancing, or repricing of our debt, 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.

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, 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.

41 unchanged sentences

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.

This segment 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.

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 three months ended March 31, 2024, the Company did not repurchase any of its common stock pursuant to the stock repurchase program.

As of March 31, 2024, $234.6 million was available for share repurchases under the program.

For the three months ended March 31, 2023, in connection with a secondary offering of the Company’s common stock by an equity sponsor in March 2023, the Company repurchased 3,000,000 shares of its common stock in the offering from underwriters at price of $9.95 per share concurrently with the close of the offering, for a total of $29.9 million.

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.

As of June 30, 2024, $229.6 million was available for share repurchases under the program.

For the six months ended June 30, 2023, in connection with secondary offerings of the Company’s common stock by an equity sponsor in March and May 2023, the Company repurchased 7,000,000 shares of its common stock in the offerings from underwriters at a weighted average price of $10.48 per share concurrently with the close of the offerings, for a total of $73.4 million, excluding accrued excise tax.

Key Performance Indicators

12 unchanged sentences

Key Factors and Trends Affecting Operating Results and Financial Condition

Sales in our Ecoservices and Advanced Materials & Catalysts segments are made on both a purchase order basis and pursuant to long-term contracts.

Our Advanced Materials & Catalysts segment may also experience demand fluctuations based upon the timing of some of our customer’s fixed bed catalyst replacements.

Overall, our Ecoservices and Advanced Materials & Catalysts segments continued to benefit from positive demand trends for our products and services in the industries we serve.

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.

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.

Sales in our Ecoservices and Advanced Materials & Catalysts segments are made on both a purchase order basis and pursuant to long-term contracts.

Our Advanced Materials & Catalysts segment may experience demand fluctuations based upon the timing of some of our customer’s fixed bed catalyst replacements.

For our Advanced Materials & Catalysts segment, global polyethylene demand remained positive, supporting our sales of polyethylene catalysts.

Hydrocracking catalyst sales experienced demand fluctuations driven by customer order timing associated by the timing of fixed bed catalyst replacement cycles.

In addition, we expect variability in specialty and niche-custom catalyst sales, which tend to be event driven.

With a current imbalance between the production of renewable diesel and current demand, we expect demand may decrease in the near to mid-term for catalyst sales into sustainable fuels.

Similarly, given various macro-economic conditions which have adversely impacted sales of heavy-duty diesel vehicles, we have reduced our expectations for sales of emission control catalysts.

Cost of Goods Sold

21 unchanged sentences

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.

We operate in various geographies with approximately 5% of our sales for the three months ended March 31, 2024 and approximately 6% for the year ended December 31, 2023 in currencies other than the U.S.

We operate in various geographies with approximately 5% of our sales for the six months ended June 30, 2024 and approximately 6% for the year ended December 31, 2023 in currencies other than the U.S.

Because our consolidated financial results are reported in U.S.

3 unchanged sentences

Results of Operations

Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

The following is a summary of our financial performance for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023

The following is a summary of our financial performance for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

• Sales decreased $1.3 million to $182.8 million.

The decrease in sales was primarily due to lower average selling price as a result of the pass-through of lower costs, partially offset by higher sales volume.

• Gross profit increased $2.7 million to $39.2 million.

The increase in gross profit was primarily due to lower variable costs and higher sales volume.

The decrease in sales was primarily due to the result of lower average selling prices due to the pass-through of lower costs in Ecoservices, partially offset by higher sales volume in regeneration services, virgin sulfuric acid and advanced silicas.

• Gro ss profit decreased $7.3 million to $53.7 million.

The decrease in gross profit was primarily due to lower average selling pricing, partially offset by higher volume and favorable variable costs.

Operating Income

• Operating income increased by $5.2 million to $13.9 million.

The increase in operating income was due to an increase in gross profit and lower other operating expenses.

• Operating income decreased by $5.4 million to $27.9 million.

The decrease in operating income was due to a decrease in gross profit and other operating expenses, net.

Equity in Net Income of Affiliated Companies

• Equity in net income of affiliated companies for the three months ended March 31, 2024 was $2.1 million, compared to $0.2 million for the three months ended March 31, 2023.

The increase of $1.9 million was due to higher earnings from the Zeolyst Joint Ventur e during the three months ended March 31, 2024.

The following is our unaudited condensed consolidated statements of income and a summary of financial results for the three months ended March 31, 2024 and 2023:

• Equity in net income of affiliated companies for the three months ended June 30, 2024 was $1.4 million, compared to $11.4 million for the three months ended June 30, 2023.

The decrease of $10.0 million was due to lower earnings generated by the Zeolyst Joint Venture for the three months ended June 30, 2024, driven by lower sales volume.

The following is our unaudited condensed consolidated statements of income and a summary of financial results for the three months ended June 30, 2024 and 2023:

Three months ended

March 31, Change

June 30, Change

2024 2023 $ %

8 unchanged sentences

Operating income margin 15.2 % 18.1 %

Equity in net (income) from affiliated companies (2.1) (0.2) (1.9) NM

Equity in net (income) from affiliated companies (1.4) (11.4) 10.0 (87.7) %

Interest expense, net 12.9 9.2 3.7 40.2 %

Other expense (income), net 0.2 (0.4) 0.6 150.0 %

Income (loss) before income taxes 2.4 (0.6) 3.0 500.0 %

Debt extinguishment costs 4.6 — 4.6 NM

Other expense, net 0.4 0.6 (0.2) (33.3) %

Income before income taxes 11.4 34.9 (23.5) (67.3) %

Provision for income taxes 3.1 8.8 (5.7) (64.8) %

Effective tax rate 27.1 % 25.2 %

Net income (loss) $ 1.2 $ (1.5) $ 2.7 180.0 %

Net income $ 8.3 $ 26.1 $ (17.8) (68.2) %

Three months ended

March 31, Change

June 30, Change

2024 2023 $ %

3 unchanged sentences

Total sales $ 182.8 $ 184.1 $ (1.3) (0.7) %

Ecoservices :

Sales in Ecoservices for the three months ended March 31, 2024 were $141.6 million, an increase of $3.8 million, or 2.8%, compared to sales of $137.8 million for the three months ended March 31, 2023.

The increase in sales reflects higher sales volume of $20.1 million, partially offset by lower average selling pricing of $16.3 million, before adjusting for the impact of the pass-through of lower sulfur costs of approximately $5 million.

Sales volume was higher primarily due to increased virgin sulfuric acid and regeneration services sales for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 which had the adverse impact of Winter Storm Elliott and extended maintenance turnaround activity at our facilities, as well as strong demand for regeneration services in the gulf coast.

Average selling price was lower primarily due to the pass-through of lower costs, including sulfur, natural gas, electricity and other variable costs.

Sales in Ecoservices for the three months ended June 30, 2024 were $153.9 million, a decrease of $4.2 million, or 2.7%, compared to sales of $158.1 million for the three months ended June 30, 2023.

The decrease in sales was due to lower average selling prices of $17.0 million, inclusive of the negative impact associated with the pass-through of lower sulfur costs of approximately $3 million, partially offset by higher sales volume of $12.8 million.

Average selling price was lower primarily due to the pass-through of lower costs, including sulfur, natural gas, freight and other variable costs.

The increase in sales volume was primarily related to increased demand for regeneration services and virgin sulfuric acid.

Advanced Materials & Catalysts:

Sales in Advanced Materials & Catalysts for the three months ended March 31, 2024 were $18.9 million, a decrease of $4.2 million, or 18.2%, compared to sales of $23.1 million for the three months ended March 31, 2023.

The decrease in sales was primarily due to lower sales volume of advanced silicas used for the production of polyethylene, whereas sales of finished catalysts used to produce polyethylene increased compared to the three months ended March 31, 2023 on improved demand in the U.S.

Sales of polyethylene catalyst supports decreased, largely due to customer order timing and limited destocking.

Gross profit for the three months ended March 31, 2024 was $39.2 million, an increase of $2.7 million, or 7.4%, compared to $36.5 million for the three months ended March 31, 2023.

The increase in gross profit is primarily driven by higher sales volume of $3.5 million as well as favorable manufacturing costs of $10.6 million, partially offset by lower average selling prices of $11.4 million, exclusive of the $5 million pass-through of sulfur costs.

The favorable manufacturing costs were primarily driven by lower variable costs.

Sales in Advanced Materials & Catalysts for the three months ended June 30, 2024 were $28.9 million, an increase of $2.9 million, or 11.2%, compared to sales of $26.0 million for the three months ended June 30, 2023.

Of the increase in sales, $2.7 million was associated with higher sales volume and $0.2 million associated with higher average selling prices.

The increase in sales volume was primarily driven by higher end use demand for niche custom catalysts.

Gross profit for the three months ended June 30, 2024 was $53.7 million, a decrease of $7.3 million, or 12.0%, compared to $61.0 million for the three months ended June 30, 2023.

The decrease in gross profit was primarily due to lower average selling prices of $13.5 million, exclusive of the pass-through of lower sulfur costs, partially offset by favorable variable costs of $1.6 million along with higher sales volume of $7.7 million.

Average selling prices were lower primarily due to the pass-through of lower costs, including sulfur, natural gas, electricity, and other variable costs.

The increase in sales volume was primarily related to higher demand for regeneration services and virgin sulfuric acid.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, 2024 were $21.6 million, an increase of $0.5 million, as compared to $21.1 million for the three months ended March 31, 2023.

The increase in selling, general and administrative expenses was mainly due to an increase in other compensation-related expenses of $2.0 million, partially offset by a decrease in professional fees of $0.5 million and other expenses of $0.8 million.

Selling, general and administrative expenses for the three months ended June 30, 2024 were $22.7 million, an increase of $1.3 million, compared to $21.4 million for the three months ended June 30, 2023.

The increase in selling, general and administrative expenses was primarily due to an increase in other compensation-related expenses of $4.0 million, offset by a decrease $1.2 million in stock compensation due to fewer overall awards granted and outstanding for the three months ended June 30, 2024 as compared to the prior year period and decrease of $1.3 million in other expenses.

Other Operating Expense, Net

Other operating expense, net for the three months e nded March 31, 2024 was $3.7 million, a decrease of $3.0 million, compared to $6.7 million for the three months ended March 31, 2023.

The decrease in other operating expense, net was mainly driven by a decrease of $1.4 million in transaction costs, a decrease of $0.8 million in business optimization costs and a decrease in net losses on asset disposals of $0.5 million.

Other operating expense, net for the three months ended June 30, 2024 was $3.1 million, a decrease of $3.2 million, compared to $6.3 million for the three months ended June 30, 2023.

The decrease in other operating expense, net was primarily due to a decrease in net loss from asset disposals of $1.2 million, a decrease of $0.9 million in restructuring, integration and business optimization costs and a decrease of $1.1 million in transactions costs.

The decrease i n restructuring, integration and business optimization costs was primarily driven by lower business optimization costs and t he decrease in transactions costs was primarily driven by lower costs associated with share repurchases.

Equity in Net Income of Affiliated Companies

Equity in net income of affiliated companies for the three months ended March 31, 2024 was $2.1 million, compared to $0.2 million for the three months ended March 31, 2023.

The increase was due to higher sales of catalysts used in sustainable fuel and production and sales growth in customized catalyst applications within the Zeolyst Joint Venture during the three months ended March 31, 2024 .

Equity in net income of affiliated comp anies for the three months ended June 30, 2024 was $1.4 million, compared to $11.4 million for the three months ended June 30, 2023.

The decrease was due to $10.0 million of lower earnings from the Zeolyst Joint Venture during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

The decrease in earnings from the Zeolyst Joint Venture was due to lower sales volume of catalyst used in the production of sustainable fuels, emission control catalysts and timing of niche custom catalysts.

Interest Expense, Net

Interest expense, net for the three months ended March 31, 2024 was $13.4 million, an increase of $3.5 million, as compared to $9.9 million for the three months ended March 31, 2023.

The increase in interest expense, net was primarily due to year over year increase in variable rates, which was partially offset by lower outstanding debt during the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

This was offset by the benefits associated with our interest rate caps.

Other Expense (Income), Net

Other expense (income), net for the three months ended March 31, 2024 was expense of $0.2 million, a decrease of $0.6 million, as compared to income of $0.4 million for the three months ended March 31, 2023.

The decrease in other expense, net primarily consisted of unfavorable foreign currency exchange mainly related to the non-permanent intercompany debt denominated in local currency and translated to the U.S.

Interest expense, net for the three month s ended June 30, 2024 was $12.9 million, an increase of $3.7 million, as compared to $9.2 million for the three months ended June 30, 2023.

The increase in interest expense, net was primarily due to the year over year increase in variable rates, which was partially offset by lower outstanding debt during the three months ended June 30, 2024, as compared to the three months ended June 30, 2023 and benefits associated with the interest rate caps.

Debt Extinguishment Costs

Debt extinguishment costs for the three months ended June 30, 2024 were $4.6 million.

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 as debt extinguishment costs in the condensed consolidated income statement 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, 2024 was $0.4 million, a decrease of $0.2 million, as compared to $0.6 million for the three months ended June 30, 2023.

The decrease in other expense, net primarily relates to a decrease of $0.3 million in other taxes.

Provision for Income Taxes

The provision for income taxes for the three months ended March 31, 2024 was $1.2 million, compared to a $0.9 million for the three months ended March 31, 2023.

The effective income tax rate for the three months ended March 31, 2024 was 49.1%, compared to (180.7)% for the three months ended March 31, 2023.

The Company’s effective income tax rate for the three months ended March 31, 2024 was different from the effective tax rate for the three months ended March 31, 2023 primarily due to a stock compensation shortfall recognized discretely in the respective quarters with lower profits before tax in the prior year.

The provision for income taxes for the three months ended June 30, 2024 was $3.1 million, compared to $8.8 million for the three months ended June 30, 2023.

The effective income tax rate for the three months ended June 30, 2024 was 27.1%, compared to 25.2% for the three months ended June 30, 2023.

The Company’s quarter over quarter effective income tax rate has fluctuated primarily due to an increased discrete tax impact relative to pre-tax book income related to a stock compensation shortfall and a discrete tax benefit associated with state and local tax law changes.

The difference between the U.S.

federal statutory income tax rate and the Company’s effective income tax rate for the three months ended March 31, 2024 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation and a discrete tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions.

Net Income (Loss)

For the foregoing reasons, n et income was $1.2 million for the three months ended March 31, 2024, compared to net loss of $1.5 million for the three months ended March 31, 2023.

federal statutory income tax rate and the Company’s effective income tax rate for the three months ended June 30, 2024 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation and a discrete tax expense associated with the recording of accrued penalties and interest associated with historical uncertain tax positions.

For the foregoing reasons, net income was $8.3 million for the three months ended June 30, 2024, compared to $26.1 million for the three months ended June 30, 2023.

Adjusted EBITDA

1 unchanged sentence

Three months ended

March 31, Change

June 30, Change

2024 2023 $ %

11 unchanged sentences

(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 $6.9 million for the three months ended March 31, 2024, which includes $2.1 million of equity in net

income, excluding $1.6 million of amortization of investment in affiliate step-up plus $3.3 million of joint venture depreciation, amortization and interest.

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $5.4 million for the three months ended March 31, 2023, which includes $0.2 million of equity in net income, excluding $1.6 million of amortization of investment in affiliate step-up plus $3.6 million of joint venture depreciation, amortization and interest.

Adjusted EBITDA for the three months ended March 31, 2024 was $41.5 million, an increase of $4.7 million, or 12.8%, compared to $36.8 million for the three mo nths ended March 31, 2023.

The increase in Adjusted EBITDA was primarily a result of higher sales volume for virgin sulfuric acid and for regeneration services.

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.

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $16.2 million for the three months ended June 30, 2023, which includes $11.4 million of equity in net income, excluding $1.6 million of amortization of investment in affiliate step-up plus $3.2 million of joint venture depreciation, amortization and interest.

Adjusted EBITDA for the three months ended June 30, 2024 was $49.7 million, a decrease of $10.4 million, or 17.3%, compared to $60.1 million for the three months ended June 30, 2023.

The decrease in Adjusted EBITDA was a result of unfavorable net pricing, reflecting the timing and contractual pass-through of certain costs, including energy and other indexed costs and an increase in turnaround and maintenance costs, partially offset by higher sales volume in both regeneration services and virgin sulfuric acid.

Advanced Materials & Catalysts:

Adjusted EBITDA for the three months ended March 31, 2024 was $11.1 million, a decrease of $1.9 million or 14.6%, compared to $13.0 million for the three mo nths ended March 31, 2023 .

The decrease was primarily a result of lower sales volume of advanced silicas used for the production of polyethylene in Advanced Silicas, partially offset by higher sales of catalysts used in sustainable fuel production and growth in customized catalyst applications within the Zeolyst Joint Venture.

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

Adjusted EBITDA for the three months ended June 30, 2024 was $14.7 million, a decrease of $10.7 million, or 42.1%, compared to $25.4 million for the three months ended June 30, 2023.

The decrease in Adjusted EBITDA was primarily a result of lower sales volume within the Zeolyst Joint Venture associated with catalysts used in the production of sustainable fuels, emission control catalysts and timing of niche custom catalysts, partially offset by higher sales in Advanced Silicas.

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

Three months ended

(in millions)

Reconciliation of net income (loss) to Adjusted EBITDA

Net income (loss) $ 1.2 $ (1.5)

Reconciliation of net income to Adjusted EBITDA

Net income $ 8.3 $ 26.1

Provision for income taxes 3.1 8.8

4 unchanged sentences

Amortization of investment in affiliate step-up (b)

Debt extinguishment costs 4.6 —

Net loss on asset disposals (c)

Foreign currency exchange gain (d)

LIFO (benefit) expense (e)

Transaction and other related costs (f)

Equity-based compensation 3.8 5.0

Restructuring, integration and business optimization expenses (g)

Adjusted EBITDA $ 56.9 $ 79.3

(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 statements of income related to the non-permanent intercompany debt denominated in local currency translated to U.S.

(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:

Three months ended June 30,

Pre-tax Tax expense (benefit) After-tax Pre-tax Tax expense (benefit) After-tax

(in millions)

Reconciliation of net income to Adjusted Net Income (1)(2)

Net income $ 11.4 $ 3.1 $ 8.3 $ 34.9 $ 8.8 $ 26.1

Amortization of investment in affiliate step-up (b)

0.9 0.2 0.7 1.6 0.4 1.2

Debt extinguishment costs 4.6 1.2 3.4 — — —

Net loss on asset disposals (c)

— — — 1.1 0.3 0.8

Foreign currency exchange gain (d)

(0.1) — (0.1) (0.4) (0.2) (0.2)

LIFO (benefit) expense (e)

(1.5) (0.3) (1.2) 1.1 0.3 0.8

Transaction and other related costs (f)

0.1 — 0.1 1.2 0.3 0.9

Equity-based compensation 3.8 0.9 2.9 5.0 1.0 4.0

Restructuring, integration and business optimization expenses (g)

0.2 0.1 0.1 1.1 0.3 0.8

(0.2) (0.1) (0.1) 0.3 0.1 0.2

Adjusted Net Income $ 19.2 $ 5.1 $ 14.1 $ 45.9 $ 11.3 $ 34.6

(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, 2024 and June 30, 2023, 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, 2024 Compared to the Six Months Ended June 30, 2023

The following is a summary of our financial performance for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

• Sales decreased $1.6 million to $343.4 million.

The decrease in sales was primarily due to lower average selling price as a result of the pass-through of lower costs, partially offset by higher sales volume.

• Gross profit decreased $4.6 million to $92.9 million.

The decrease in gross profit was primarily due to lower average selling price, partially offset by favorable variable costs.

Operating Income

• Operating income decreased by $0.2 million to $41.8 million.

The decrease in operating income was due to a decrease in gross profit and other operating expenses, net.

Equity in Net Income of Affiliated Companies

• Equity in net income of affiliated companies for the six months ended June 30, 2024 was $3.5 million, compared to $11.6 million for the six months ended June 30, 2023.

The decrease of $8.1 million was due to lower earnings from the Zeolyst Joint Ventur e during the six months ended June 30, 2024, driven by lower 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, 2024 and 2023:

Six months ended

June 30, Change

2024 2023 $ %

(in millions, except percentages)

Sales $ 343.4 $ 345.0 $ (1.6) (0.5) %

Cost of goods sold 250.5 247.5 3.0 1.2 %

Gross profit 92.9 97.5 (4.6) (4.7) %

Gross profit margin 27.1 % 28.3 %

Selling, general and administrative expenses 44.3 42.5 1.8 4.2 %

Other operating expense, net 6.8 13.0 (6.2) (47.7) %

Operating income 41.8 42.0 (0.2) (0.5) %

Operating income margin 12.2 % 12.2 %

Equity in net (income) from affiliated companies (3.5) (11.6) 8.1 (69.8) %

Interest expense, net 26.3 19.0 7.3 38.4 %

Debt extinguishment costs 4.6 — 4.6 NM

Other expense, net 0.6 0.2 0.4 200.0 %

Income before income taxes 13.8 34.4 (20.6) (59.9) %

Provision for income taxes 4.3 9.7 (5.4) (55.7) %

Effective tax rate 30.9 % 28.3 %

Net income $ 9.5 $ 24.7 $ (15.2) (61.5) %

Six months ended

June 30, Change

2024 2023 $ %

(in millions, except percentages)

Ecoservices $ 295.6 $ 295.8 $ (0.2) (0.1) %

Advanced Materials & Catalysts 47.8 49.2 (1.4) (2.8) %

Total sales $ 343.4 $ 345.0 $ (1.6) (0.5) %

Ecoservices :

Sales in Ecoservices for the six months ended June 30, 2024 were $295.6 million, a decrease of $0.2 million, or 0.1%, compared to sales of $295.8 million for the six months ended June 30, 2023.

The change in sales reflects higher sales volume of $33.1 million, offset by lower average selling pricing of $33.3 million, before adjusting for the impact of the pass-through of lower sulfur costs of approximately $8 million.

Sales volume was higher primarily due to increased virgin sulfuric acid and regeneration services sales for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 which had the adverse impact of Winter Storm Elliott and extended maintenance turnaround activity at our facilities in 2023, as well as strong demand for regeneration services in the gulf coast in 2024.

Average selling price was lower primarily due to the pass-through of lower costs, including sulfur, natural gas, freight and other variable costs.

Advanced Materials & Catalysts:

Sales in Advanced Materials & Catalysts for the six months ended June 30, 2024 were $47.8 million, a decrease of $1.4 million, or 2.8%, compared to sales of $49.2 million for the six months ended June 30, 2023.

The decrease in sales was primarily due to lower sales volume of advanced silicas used for the production of polyethylene compared to the six months ended June 30, 2023.

Gross profit for the six months ended June 30, 2024 was $92.9 million, a decrease of $4.6 million, or 4.7%, compared to $97.5 million for the six months ended June 30, 2023.

The decrease in gross profit was primarily driven by lower average selling prices of $25.3 million, exclusive of the approximately $8 million of pass-through of sulfur costs, partially offset by favorable variable costs along with higher sales volume of $11.1 million and unfavorable manufacturing costs of $9.6 million.

Average selling prices were lower primarily due to the pass-through of lower costs, including sulfur, natural gas, electricity and other variable costs.

The higher manufacturing costs were primarily driven by planned maintenance turnaround.

The increase in sales volume was primarily related to higher demand for regeneration services and virgin sulfuric acid.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2024 were $44.3 million, an increase of $1.8 million, as compared to $42.5 million for the six months ended June 30, 2023.

The increase in selling, general and administrative expenses was mainly due to an increase in other compensation-related expenses of $6.0 million, partially offset by a decrease in stock compensation of $1.6 million, professional fees of $0.6 million and other expenses of $2.0 million.

Other Operating Expense, Net

Other operating expense, net for the six months e nded June 30, 2024 was $6.8 million, a decrease of $6.2 million, compared to $13.0 million for the six months ended June 30, 2023.

The decrease in other operating expense, net was mainly driven by a decrease of $2.4 million in transaction costs, a decrease of $1.7 million in restructuring, integration and business optimization costs and a decrease in net losses on asset disposals of $1.7 million.

The decrease i n restructuring, integration and business optimization costs was primarily driven by lower business optimization costs and t he decrease in transactions costs was primarily associated with the sale of the Performance Chemicals business in 2021 and costs associated with share repurchases.

Equity in Net Income of Affiliated Companies

Equity in net income of affiliated companies for the six months ended June 30, 2024 was $3.5 million, compared to $11.6 million for the six months ended June 30, 2023.

The decrease in earnings from the Zeolyst Joint Venture was due to lower sales of catalysts used in the production of sustainable fuels, emission control catalysts and timing of niche custom catalysts.

Interest Expense, Net

Interest expense, net for the six months ended June 30, 2024 was $26.3 million, an increase of $7.3 million, as compared to $19.0 million for the six months ended June 30, 2023.

The increase in interest expense, net was primarily due to year over year increase in variable rates, which was partially offset by lower outstanding debt during the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

This was offset by the benefits associated with our interest rate caps.

Debt Extinguishment Costs

Debt extinguishment costs for the six months ended June 30, 2024 were $4.6 million .

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 as debt extinguishment costs in the condensed consolidated income statement during the six months ended June 30, 2024.

Other Expense, Net

Other expense, net for the six months ended June 30, 2024 was $0.6 million, an increase of $0.4 million, as compared to $0.2 million for the six months ended June 30, 2023.

The increase in other expense, net primarily consisted of an increase in foreign currency exchange of $0.8 million mainly related to the non-permanent intercompany debt denominated in local currency and translated to the U.S.

dollar, offset by a decrease in pension costs of $0.1 million.

Provision for Income Taxes

The provision for income taxes for the six months ended June 30, 2024 was $4.3 million, compared to $9.7 million for the six months ended June 30, 2023.

The effective income tax rate for the six months ended June 30, 2024 was 30.9%, compared to 28.3% for the six months ended June 30, 2023.

The Company’s effective income tax rate for the six months ended June 30, 2024 was different from the effective tax rate for the six months ended June 30, 2023 primarily due to an increased discrete tax impact relative to pre-tax book income related to stock compensation shortfall recognized discretely in the respective quarters and a discrete tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions.

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, 2024 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation and a discrete tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions.

For the foregoing reasons, n et income was $9.5 million for the six months ended June 30, 2024, compared to $24.7 million for the six months ended June 30, 2023.

Adjusted EBITDA

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

Six months ended

June 30, Change

2024 2023 $ %

(in millions, except percentages)

Adjusted EBITDA (1)

Ecoservices $ 91.2 $ 96.9 $ (5.7) (5.9) %

Advanced Materials & Catalysts (2)

25.8 38.4 (12.6) (32.8) %

Unallocated corporate expenses (14.6) (13.1) (1.5) (11.5) %

Total $ 102.4 $ 122.2 $ (19.8) (16.2) %

(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 $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.

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $21.6 million for the six months ended June 30, 2023, which includes $11.6 million of equity in net income, excluding $3.2 million of amortization of investment in affiliate step-up plus $6.8 million of joint venture depreciation, amortization and interest.

Adjusted EBITDA for the six months ended June 30, 2024 was $91.2 million, a decrease of $5.7 million, or 5.9%, compared to $96.9 million for the six mo nths ended June 30, 2023.

The decrease in Adjusted EBITDA was primarily a result of higher turnaround and maintenance costs and unfavorable net pricing, reflecting the timing and contractual pass-through of certain costs including energy and other indexed costs.

This was partially offset by higher sales volume for both virgin sulfuric acid and regeneration services.

Advanced Materials & Catalysts:

Adjusted EBITDA for the six months ended June 30, 2024 was $25.8 million, a decrease of $12.6 million or 32.8%, compared to $38.4 million for the six mo nths ended June 30, 2023 .

The decrease in Adjusted EBITDA was primarily a result of lower pricing on sales volume within the Zeolyst Joint Venture associated with catalysts used in the production of sustainable fuels, emission control catalysts and timing of niche custom catalysts.

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

Six months ended

(in millions)

Reconciliation of net income to Adjusted EBITDA

Net income $ 9.5 $ 24.7

Provision for income taxes 4.3 9.7

Interest expense, net 26.3 19.0

Depreciation and amortization 43.6 41.2

EBITDA 83.7 94.6

Joint venture depreciation, amortization and interest (a)

Amortization of investment in affiliate step-up (b)

Debt extinguishment costs 4.6 —

Net loss on asset disposals (c)

Foreign currency exchange loss (gain) (d)

22 unchanged sentences

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

Three months ended March 31,

Six months ended June 30,

Pre-tax amount Tax expense (benefit) After-tax amount Pre-tax amount Tax expense (benefit) After-tax amount

(in millions)

Reconciliation of net income (loss) to Adjusted Net Income (1)(2)

Net income (loss) $ 2.4 $ 1.2 $ 1.2 $ (0.6) $ 0.9 $ (1.5)

Reconciliation of net income to Adjusted Net Income (1)(2)

Net income $ 13.8 $ 4.3 $ 9.5 $ 34.4 $ 9.7 $ 24.7

Amortization of investment in affiliate step-up (b)

2.5 0.6 1.9 3.2 0.8 2.4

Debt extinguishment costs 4.6 1.2 3.4 — — —

Net loss on asset disposals (c)

15 unchanged sentences

(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 24.6% and 25.6% for the three months ended March 31, 2024 and 2023, respectively, except equity-based compensation.

The adjustments to net income are shown net of applicable tax rates of 25.1% and 26.2% for the six months ended June 30, 2024 and 2023, respectively, except 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.

5 unchanged sentences

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, 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 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 March 31, 2024, we had cash and cash equivalents of $103.1 million and availability of $70.2 million under our ABL Facility, after giving effect to $4.0 million of outstanding letters of credit, for a total available liquidity of $173.3 million.

We did not have any revolving credit facility borrowings as of March 31, 2024.

As of March 31, 2024, we were in compliance with all covenants under our debt agreements.

As of June 30, 2024, we had cash and cash equivalents of $83.3 million and availability of $72.3 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $155.6 million.

We did not have any revolving credit facility borrowings as of June 30, 2024.

As of June 30, 2024, we were in compliance with all covenants under our debt agreements.

Our ABL Facility has one financial covenant with two ratios to maintain.

4 unchanged sentences

revolving credit facility against a $15.0 million threshold.

As of March 31, 2024, we were in compliance with the financial covenant under the ABL Facility.

As of June 30, 2024, we were in compliance with the financial covenant under the ABL Facility.

The 2024 Term Loan Facility and the ABL Facility contain various restrictive covenants.

1 unchanged sentence

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 2021 Term Loan Facility and the ABL Facility as of March 31, 2024.

Included in our cash and cash equivalents balance as of March 31, 2024 was $11.4 million of cash and cash equivalents in foreign jurisdictions.

The Company was in compliance with all debt covenants under the 2024 Term Loan Facility and the ABL Facility as of June 30, 2024.

Included in our cash and cash equivalents balance as of June 30, 2024 was $14.0 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.

4 unchanged sentences

Our liquidity requirements include interest payments related to our debt structure.

As reported, our cash interest paid for the three months ended March 31, 2024 and 2023 was approximately $12.6 million and $15.2 million, respectively.

As reported, our cash interest paid for the six months ended June 30, 2024 and 2023 was approximately $33.2 million and $19.4 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 Instrument of our condensed consolidated financials statements included in Part 1, Item 1 — Financial Statements (Unaudited).

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 $4.0 million of outstanding letters of credit on our ABL Facility as of March 31, 2024.

Three months ended

The Company’s off-balance sheet arrangements include $3.3 million of outstanding letters of credit on our ABL Facility as of June 30, 2024.

Six months ended

(in millions)

7 unchanged sentences

Cash and cash equivalents at end of period $ 83.3 $ 29.2

Net cash provided by operating activities was $36.5 million for the three months ended March 31, 2024, compared to $4.1 million for the three months ended March 31, 2023.

Cash generated by operating activities, other than changes in working capital was higher by $27.2 million during the three months ended March 31, 2024, as compared to the same period in the prior year primarily due to dividends received from the Zeolyst Joint Venture.

The increase in cash from working capital during the three months ended March 31, 2024 of $5.2 million was favorable, compared to the three months ended March 31, 2023 primarily due to favorable changes in prepaids and other current assets and accrued liabilities, offset by unfavorable changes in receivables, inventories and accounts payable.

The favorable change in prepaid and other current assets primarily relates to the timing of miscellaneous receivables and non-trade receivables from related parties.

The favorable change in accrued liabilities mainly relates to lower payments for variable employee compensation liabilities partially offset by higher payments for taxes in the current period.

Net cash provided by operating activities was $46.4 million for the six months ended June 30, 2024, compared to $41.1 million for the six months ended June 30, 2023.

Cash generated by operating activities, other than changes in working capital, was higher by $9.1 million during the six months ended June 30, 2024, as compared to the same period in the prior year primarily due to dividends received from the Zeolyst Joint Venture offset by debt extinguishment costs.

The decrease in cash from working capital during the six months ended June 30, 2024 of $3.8 million was unfavorable compared to the six months ended June 30, 2023 primarily due to unfavorable changes in receivables, inventories and accounts payable, offset by favorable changes in prepaids and other current assets and accrued liabilities.

The unfavorable change in receivables was driven by the timing of collection of sales.

1 unchanged sentence

The unfavorable change in accounts payable was due to the timing of vendor payments.

Net cash used in investing activities was $17.4 million for the three months ended March 31, 2024, compared to $18.7 million during the same period in 2023.

Cash used in investing activities consisted of $17.4 million and $18.7 million to fund capital expenditures during the three months ended March 31, 2024 and 2023, respectively.

Net cash used in financing activities was $4.2 million for the three months ended March 31, 2024, compared to $33.6 million during the same period in 2023.

Net cash used in financing activities was primarily driven by the Company repurchases of common stock of $29.9 million during the three months ended March 31, 2023.

The favorable change in prepaid and other current assets primarily relates to the timing of miscellaneous and interest receivables and non-trade receivables from related parties.

The favorable change in accrued liabilities mainly relates to lower payments for variable employee compensation liabilities partially offset by higher payments for taxes in the current period.

Net cash used in investing activities was $36.8 million for the six months ended June 30, 2024, compared to $39.2 million during the same period in 2023.

Net cash used in investing activities consisted of $36.6 million and $39.2 million to fund capital expenditures during the six months ended June 30, 2024 and 2023, respectively.

Net cash used in financing activities was $14.4 million for the six months ended June 30, 2024, compared to $79.9 million during the same period in 2023.

Net cash used in financing activities was primarily driven by the lower repurchases of the Company’s common stock of $68.4 million during the six months ended June 30, 2023.

2024 December 31,

(in millions)

Senior Secured Term Loan Facility due June 2028 $ 875.3 $ 877.5

2024 Term Loan Facility $ 873.0 $ 877.5

ABL Facility — —

5 unchanged sentences

Total long-term debt, excluding current portion $ 855.9 $ 858.9

As of March 31, 2024, our total debt was $875.3 million, excluding the original issue discount of $5.8 million and deferred financing costs of $3.2 million for our senior secured credit facilities.

Our net debt as of March 31, 2024 was $772.2 million, including cash and cash equivalents of $103.1 million.

As of June 30, 2024, our total debt was $873.0 million, excluding the original issue discount of $7.6 million and deferred financing costs of $3.0 million for our senior secured credit facilities.

Our net debt as of June 30, 2024 was $789.7 million, including cash and cash equivalents of $83.3 million.

We may seek, subject to market conditions and other factors, opportunities to repurchase, refinance or otherwise reprice our debt.

3 unchanged sentences

These capital expenditures represent our “book” capital expenditures for which the company has recorded, but not necessarily paid for the capital expenditures.

Three months ended

Six months ended

(in millions)

8 unchanged sentences

Actual results may differ from these estimates under different assumptions or conditions.

We evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis.

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.

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, 2023, 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, 2024, 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.

Although the estimated fair value of the Advanced Materials & Catalysts reporting unit exceeded its carrying value on October 1, 2023 by over 30%, the Company has experienced unfavorable effects on current operations resulting from certain macroeconomic and industry factors in specific end uses during the six months ended June 30, 2024.

Prolonged unfavorable effects 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

1 unchanged sentence

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-Q

Item 2. Management’s Discussion and Analysis