What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-01 compared with 2024-08-02 · 214 added, 154 removed, 656 unchanged (36% of the section changed)

4 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

23 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

4 unchanged sentences

Foreign currency translation 6,403 ( 3,112 ) 4,040 ( 99 )

Total other comprehensive (loss) income ( 1,224 ) 6,692 950 933

Total other comprehensive loss ( 5,248 ) ( 2,197 ) ( 4,298 ) ( 1,264 )

Comprehensive income $ 9,003 $ 14,377 $ 19,469 $ 39,961

3 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2024 December 31,

25 unchanged sentences

authorized shares 450,000,000 ;

issued shares 140,872,846 and 140,744,045 on June 30, 2024 and December 31, 2023, respectively;

outstanding shares 116,466,232 and 116,116,895 on June 30, 2024 and December 31, 2023, respectively

issued shares 140,872,846 and 140,744,045 on September 30, 2024 and December 31, 2023, respectively;

outstanding shares 116,509,803 and 116,116,895 on September 30, 2024 and December 31, 2023, respectively

Preferred stock ($ 0.01 par);

authorized shares 50,000,000 ;

no shares issued or outstanding on June 30, 2024 and December 31, 2023

no shares issued or outstanding on September 30, 2024 and December 31, 2023

Additional paid-in capital 1,103,361 1,102,581

1 unchanged sentence

Treasury stock, at cost;

shares 24,406,614 and 24,627,150 on June 30, 2024 and December 31, 2023, respectively

shares 24,363,043 and 24,627,150 on September 30, 2024 and December 31, 2023, respectively

( 223,055 ) ( 226,710 )

24 unchanged sentences

Balance, June 30, 2024 $ 1,409 $ 1,100,749 $ ( 161,340 ) $ ( 223,527 ) $ ( 8 ) $ 717,283

Net income — — 14,251 — — 14,251

Other comprehensive loss — — — — ( 5,248 ) ( 5,248 )

Stock compensation expense — 2,952 — — — 2,952

Shares issued under equity incentive plan, net of forfeitures — ( 340 ) — 472 — 132

Balance, September 30, 2024 $ 1,409 $ 1,103,361 $ ( 147,089 ) $ ( 223,055 ) $ ( 5,256 ) $ 729,370

stock Additional

17 unchanged sentences

Balance, June 30, 2023 $ 1,407 $ 1,101,285 $ ( 217,359 ) $ ( 224,494 ) $ 6,925 $ 667,764

Net income — — 16,574 — — 16,574

Other comprehensive loss — — — — ( 2,197 ) ( 2,197 )

Repurchases of common shares — — — ( 5,344 ) — ( 5,344 )

Tax withholdings on equity award vesting — — — ( 2,506 ) — ( 2,506 )

Excise tax on repurchases of common shares — — — ( 8 ) — ( 8 )

Stock compensation expense — 3,392 — — — 3,392

Shares issued under equity incentive plan, net of forfeitures — ( 5,461 ) — 5,642 — 181

Balance, September 30, 2023 $ 1,407 $ 1,099,216 $ ( 200,785 ) $ ( 226,710 ) $ 4,728 $ 677,856

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six months ended

Nine months ended

September 30,

Cash flows from operating activities:

6 unchanged sentences

Foreign currency exchange loss (gain) 531 ( 41 )

Deferred income tax (benefit) provision ( 1,690 ) 1,283

Deferred income tax benefit ( 4,450 ) ( 1,011 )

Net loss on asset disposals 832 3,326

3 unchanged sentences

Other, net ( 7,859 ) ( 5,270 )

Working capital changes that used cash:

Working capital changes that provided (used) cash:

Receivables 7,588 ( 8,939 )

6 unchanged sentences

Purchases of property, plant and equipment ( 51,725 ) ( 53,642 )

Other, net ( 200 ) —

Investment in non-marketable equity securities ( 4,500 ) —

Net cash used in investing activities ( 56,225 ) ( 53,642 )

2 unchanged sentences

Repayments of revolving credit facilities — ( 14,500 )

Issuance of long-term debt, net of discount 870,817 —

Issuance of long-term debt, net of original issue discount and financing fees 870,817 —

Repayments of long-term debt ( 877,500 ) ( 6,750 )

21 unchanged sentences

Ecoservices also provides chemical waste handling and treatment services, as well as ex-situ catalyst activation services for the refining and petrochemical industry.

Advanced Materials & Catalysts, through its Advanced Silicas business, provides finished silica catalysts, catalyst supports and functionalized silicas necessary to produce high performing plastics and to enable sustainable chemistry, and through the Zeolyst Joint Venture, innovates and supplies specialty zeolites used for catalysts that support the production of sustainable fuels, remove nitrogen oxides from diesel engine emissions and that are broadly applied in refining and petrochemical processes.

Advanced Materials & Catalysts, through its Advanced Silicas business, provides finished silica catalysts, catalyst supports and functionalized silicas necessary to produce high performing plastics and to enable sustainable chemistry, and through the Zeolyst Joint Venture, innovates and supplies specialty zeolites used in catalysts that support the production of sustainable fuels, remove nitrogen oxides from diesel engine emissions and that are broadly applied in refining and petrochemical processes.

The Company’s regeneration services product group, which is a part of the Company’s 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.

9 unchanged sentences

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance to improve the disclosures related to public business entities reportable segments.

This new guidance requires entities to provide information regarding significant segment expenses, especially those segment expenses that are regularly reported to the Company’s chief operating decision maker (the Company’s Chief Executive Officer), or CODM.

The guidance also require public entities to disclose the nature, type and amounts of other segment items by reportable segment.

2 unchanged sentences

The disclosure will be implemented as required for the fiscal year ended December 31, 2024.

The Company is currently evaluating the impact of this guidance.

The Company is currently evaluating the impact of this guidance and expects to include additional disclosures.

The Company does not believe that the new guidance will have a material impact on its balance sheets or statements of income.

In December 2023, FASB issued guidance to improve disclosures related to incomes taxes.

4 unchanged sentences

The Company is currently evaluating the impact of this guidance.

In October 2023, FASB issued guidance to amend either presentation or disclosure requirements related to fourteen subtopics in the FASB Accounting Standards Codification, that are currently in the SEC Regulation S-X or Regulation S-K.

The new guidance was issued in response to the SEC’s ruling on disclosure simplification.

For entities subject to existing SEC disclosure requirements, the effective date of each amendment of the topics will be the date that the SEC removes the related disclosure from Regulation S-X or

AND SUBSIDIARIES

1 unchanged sentence

(Dollars in thousands, except share and per share amounts)

Regulation S-K.

In October 2023, FASB issued guidance to amend either presentation or disclosure requirements related to fourteen subtopics in the FASB Accounting Standards Codification that are currently in the SEC Regulation S-X or Regulation S-K.

The new guidance was issued in response to the SEC’s ruling on disclosure simplification.

For entities subject to existing SEC disclosure requirements, the effective date of each amendment of the topics will be the date that the SEC removes the related disclosure from Regulation S-X or Regulation S-K.

The guidance must be applied prospectively, with no early adoption permitted for entities subject to those existing SEC disclosures.

17 unchanged sentences

• Ammonium bisulfite solution

Polyethylene, polymers & engineered plastics • Catalysts for high-density polyethylene and chemicals syntheses

Polyethylene, polymers & engineered plastics • Catalysts and catalyst supports for high-density polyethylene and chemicals syntheses

• Antiblock for film packaging

1 unchanged sentence

Regeneration and treatment services • Sulfuric acid regeneration services

• Treatment services

• Hazardous waste treatment services

Industrial, mining & automotive • Virgin sulfuric acid for mining

4 unchanged sentences

(Dollars in thousands, except share and per share amounts)

The following tables disaggregate the Company’s sales, by segment and end uses, for the three and six months ended June 30, 2024 and 2023, respectively:

Three months ended June 30, 2024

The following tables disaggregate the Company’s sales, by segment and end uses, for the three and nine months ended September 30, 2024 and 2023, respectively:

Three months ended September 30, 2024

Ecoservices Advanced Materials & Catalysts (2)

5 unchanged sentences

Total segment sales $ 153,867 $ 25,308 $ 179,175

Three months ended June 30, 2023

Three months ended September 30, 2023

Ecoservices Advanced Materials & Catalysts (2)

5 unchanged sentences

Total segment sales $ 147,629 $ 25,697 $ 173,326

Six months ended June 30, 2024

Nine months ended September 30, 2024

Ecoservices Advanced Materials & Catalyst (2)

5 unchanged sentences

Total segment sales $ 449,428 $ 73,104 $ 522,532

Six months ended June 30, 2023

Nine months ended September 30, 2023

Ecoservices Advanced Materials & Catalyst (2)

28 unchanged sentences

Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.

The following tables present information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

Fair value on a recurring basis

The following tables present information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

September 30,

2024 Quoted Prices in

29 unchanged sentences

For OTC derivatives that trade in liquid markets, such as forward contracts, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment.

As of June 30, 2024, th e Company had interest rate c aps th at were fair valued using Level 2 inputs.

As of September 30, 2024, th e Company had interest rate c aps th at were fair valued using Level 2 inputs.

In addition, the Company applies a credit valuation adjustment to reflect credit risk which is calculated based on credit default swaps.

2 unchanged sentences

The credit valuation adjustment is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company’s liabilities or that a market participant would be willing to pay for the Company’s assets.

Fair value on a non-recurring basis

Non-marketable equity securities

The Company’s non-marketable equity securities consist of an investment in a privately-held company without readily determinable market values.

Non-marketable equity securities are accounted for using the measurement alternative, defined as cost less impairment, if any, plus or minus adjustments from observable price changes for identical or similar securities of the same issuer.

Adjustments to fair value or impairments, if any, are recorded in the condensed consolidated statements of income.

On July 24, 2024, the Company paid $ 4,500 for a minority equity investment in Pajarito Powder LLC (“Pajarito”), an innovative materials science company that focuses on supports and catalysts required for the manufacture and operation of electrolyzers and fuel cells.

The investment is recorded in other long-term assets in the condensed consolidated balance sheet and within cash flows from investing activities in the condensed consolidated statements of cash flows.

As of September 30, 2024, the carrying value in Pajarito was $ 4,500 .

There were no remeasurement events or recognized gains or losses for the three and nine months ended September 30, 2024, respectively.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

Stockholders' Equity:

Accumulated Other Comprehensive Income (Loss)

The following tables present the tax effects of each component of other comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023, respectively:

Three months ended June 30,

The following tables present the tax effects of each component of other comprehensive loss for the three and nine months ended September 30, 2024 and 2023, respectively:

Three months ended September 30,

amount Tax benefit/

3 unchanged sentences

Defined benefit and other postretirement plans:

Net gain $ 714 $ ( 178 ) $ 536 $ 651 $ ( 162 ) $ 489

Net gain (loss) $ 11 $ ( 3 ) $ 8 $ ( 253 ) $ 63 $ ( 190 )

Net prior service cost ( 7 ) 2 ( 5 ) ( 31 ) 8 ( 23 )

2 unchanged sentences

Foreign currency translation 6,403 — 6,403 ( 3,112 ) — ( 3,112 )

Other comprehensive income (loss) $ ( 1,405 ) $ 181 $ ( 1,224 ) $ 8,507 $ ( 1,815 ) $ 6,692

Six months ended June 30,

Other comprehensive loss $ ( 9,132 ) $ 3,884 $ ( 5,248 ) $ ( 2,149 ) $ ( 48 ) $ ( 2,197 )

Nine months ended September 30,

amount Tax benefit/

6 unchanged sentences

Benefit plans, net 702 ( 175 ) 527 304 ( 76 ) 228

Net gain (loss) from hedging activities 3,719 ( 930 ) 2,789 ( 3,244 ) 723 ( 2,521 )

Net loss from hedging activities ( 11,820 ) 2,955 ( 8,865 ) ( 1,998 ) 605 ( 1,393 )

Foreign currency translation 4,040 — 4,040 ( 99 ) — ( 99 )

Other comprehensive income $ 2,054 $ ( 1,104 ) $ 950 $ 357 $ 576 $ 933

Other comprehensive loss $ ( 7,078 ) $ 2,780 $ ( 4,298 ) $ ( 1,793 ) $ 529 $ ( 1,264 )

AND SUBSIDIARIES

1 unchanged sentence

(Dollars in thousands, except share and per share amounts)

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the six months ended June 30, 2024 and 2023, respectively:

The following tables present the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine months ended September 30, 2024 and 2023, respectively:

Defined benefit

4 unchanged sentences

December 31, 2023 $ 612 $ 12,546 $ ( 14,116 ) $ ( 958 )

Other comprehensive income (loss) before reclassifications 540 9,778 ( 2,363 ) 7,955

Other comprehensive income before reclassifications 549 1,657 4,040 6,246

Amounts reclassified from accumulated other comprehensive loss (1)

1 unchanged sentence

Net current period other comprehensive income (loss) 527 ( 8,865 ) 4,040 ( 4,298 )

June 30, 2024 $ 1,136 $ 15,335 $ ( 16,479 ) $ ( 8 )

September 30, 2024 $ 1,139 $ 3,681 $ ( 10,076 ) $ ( 5,256 )

December 31, 2022 $ ( 508 ) $ 24,672 $ ( 18,172 ) $ 5,992

Other comprehensive income before reclassifications 412 6,392 3,013 9,817

Other comprehensive income (loss) before reclassifications 207 12,057 ( 99 ) 12,165

Amounts reclassified from accumulated other comprehensive income (loss) (1)

1 unchanged sentence

Net current period other comprehensive income (loss) 228 ( 1,393 ) ( 99 ) ( 1,264 )

June 30, 2023 $ ( 67 ) $ 22,151 $ ( 15,159 ) $ 6,925

September 30, 2023 $ ( 280 ) $ 23,279 $ ( 18,271 ) $ 4,728

(1) See the following table for details about these reclassifications.

Amounts in parentheses indicate debits.

The following table presents the reclassifications out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2024 and 2023, respectively:

The following table presents the reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2024 and 2023, respectively:

Details about Accumulated Other Comprehensive Income Components Amounts reclassified from Accumulated Other

3 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

11 unchanged sentences

(1) Amounts in parentheses indicate debits to profit/loss.

(2) These accumulated other comprehensive income (loss) components are components of net periodic pension and other postretirement cost (see Note 14 to these condensed consolidated financial statements for additional details).

AND SUBSIDIARIES

1 unchanged sentence

(Dollars in thousands, except share and per share amounts)

Treasury Stock Repurchases

2 unchanged sentences

Under the plan, the Company is permitted to repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions with an equity sponsor in accordance with applicable federal securities laws, with the Company determining the timing and the amount of any repurchases based on its evaluation of market conditions, share price and other factors.

During 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 $ 4,998 , excluding brokerage commissions and accrued excise tax.

As of June 30, 2024, $ 229,594 was available for share repurchases under the program.

During the six months ended June 30, 2024, the Company did not accrue excise tax related to these repurchases, net of shares issued under the Company’s equity incentive program (see Note 18 to these condensed consolidated financial statements).

During the six m onths 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 sold in the offerings from the underwriters at a weighted average price of $ 10.48 per share concurrently with the closing of the offerings, for a total of $ 73,373 , excluding accrued excise tax .

During the six months ended June 30, 2023 , the Company accrued excise tax of $ 630 related to these repurchases, net of shares issued under the Company’s equity incentive program.

During the nine months ended September 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 $ 4,998 , excluding brokerage commissions and accrued excise tax.

As of September 30, 2024, $ 229,594 was available for share repurchases under the program.

During the nine months ended September 30, 2024, the Company did not need to accrue excise tax related to these repurchases, net of shares issued under the Company’s equity incentive program (see Note 18 to these condensed consolidated financial statements).

During the nine m onths ended September 30, 2023, the Company repurchased 541,494 shares on the open market at an average price of $ 9.85 per share, for a total of $ 5,333 , excluding brokerage commissions and accrued excise tax.

Additionally, 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 sold in the offerings from the underwriters at a weighted average price of $ 10.48 per share concurrently with the closing of the offerings, for a total of $ 73,374 , excluding accrued excise tax .

During the nine months ended September 30, 2023 , the Company accrued excise tax of $ 638 related to these repurchases, net of shares issued under the Company’s equity incentive program.

This amount was included in accrued liabilities in the condensed consolidated balance sheet and is treated by the Company as a cost of the treasury stock transactions in equity.

2 unchanged sentences

These transactions, when they occur, are accounted for as stock repurchases by the Company, with the shares returned to treasury stock at a cost representing the payment by the Company of the tax obligations on behalf of the employees in lieu of shares for the vesting unit.

There were 128,801 and 95,269 shares delivered to the Company to cover tax payments for the six months ended June 30, 2024 and 2023, respectively and the fair value of those shares withheld were $ 1,218 and $ 866 for the six months ended June 30, 2024 and 2023, respectively.

The change in the carrying amount of goodwill for the six months ended June 30, 2024 is summarized as follows:

There were 128,801 and 315,635 shares delivered to the Company to cover tax payments for the nine months ended September 30, 2024 and 2023, respectively and the fair value of those shares withheld were $ 1,218 and $ 3,372 for the nine months ended September 30, 2024 and 2023, respectively.

The change in the carrying amount of goodwill for the nine months ended September 30, 2024 is summarized as follows:

Ecoservices Advanced Materials & Catalysts Total

1 unchanged sentence

Foreign exchange impact — 1,322 1,322

Balance as of June 30, 2024 $ 326,589 $ 77,686 $ 404,275

Balance as of September 30, 2024 $ 326,589 $ 79,203 $ 405,792

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.

The Company determined 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 below their respective carrying values.

During the nine months ended September 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 below their respective carrying values.

AND SUBSIDIARIES

1 unchanged sentence

(Dollars in thousands, except share and per share amounts)

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.

2 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Restructuring, integration and business optimization costs 535 310 920 2,438

Net (gain) loss on asset disposals ( 34 ) 1,128 614 2,306

Net loss on asset disposals 218 1,020 832 3,326

Other, net ( 191 ) 148 98 789

2 unchanged sentences

Inventories, net are classified and valued as follows:

September 30,

2024 December 31,

12 unchanged sentences

The Company accounts for investments in affiliated companies under the equity method.

Affiliated companies accounted for on the equity basis as of June 30, 2024 are as follows:

Affiliated companies accounted for on the equity basis as of September 30, 2024 are as follows:

Company Country Percent

3 unchanged sentences

Three months ended

June 30, Six months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Gross profit 9,200 22,205 43,129 66,776

Operating income 5,739 25,103 12,583 27,502

Net income 4,665 25,926 12,010 29,573

Operating (loss) income ( 1,608 ) 12,414 10,976 39,916

Net (loss) income ( 623 ) 12,617 11,387 42,189

(1) Summarized information of the combined investments is presented at 100%;

the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above.

The Company’s investments in affiliated companies balance as of June 30, 2024 and December 31, 2023 includes net purchase accounting fair value adjustments of $ 222,073 and $ 224,614 , respectively, related to a prior business combination, consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names.

Consolidated equity in net income from affiliates is net of $ 940 and $ 2,541 of amortization expense related to purchase accounting fair value adjustments for the three and six months ended June 30, 2024, respectively.

Consolidated equity in net income from affiliates is net of $ 1,601 and $ 3,201 of amortization expense related to purchase accounting fair value adjustments for the three and six months ended June 30, 2023, respectively.

The Company had receivables due from affiliates of $ 5,018 and $ 3,231 as of June 30, 2024 and December 31, 2023, respectively, which were included in prepaid and other current assets in the condensed consolidated balance sheets.

The Company had payables from affiliates of $ 2,859 and $ 1,351 as of June 30, 2024 and December 31, 2023, which were included in accrued liabilities in the condensed consolidated balance sheets.

Receivables and payables due from affiliates are generally non-trade.

Sales to affiliates were $ 2,110 for the three and six months ended June 30, 2024, respectively and $ 757 and $ 2,457 for the three and six months ended June 30, 2023, respectively.

There were no purchases from affiliates for the three and six months ended June 30, 2024 and 2023, respectively.

The Company’s investments in affiliated companies balance as of September 30, 2024 and December 31, 2023 includes net purchase accounting fair value adjustments of $ 221,463 and $ 224,614 , respectively, related to a prior business combination consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names.

Consolidated equity in net income from affiliates is net of $ 610 and $ 3,151 of amortization expense related to purchase accounting fair value adjustments for the three and nine months ended September 30, 2024, respectively.

Consolidated equity in net income from affiliates is net of $ 1,601 and $ 4,802 of amortization expense related to purchase accounting fair value adjustments for the three and nine months ended September 30, 2023, respectively.

The Company had receivables due from affiliates of $ 2,802 and $ 3,231 as of September 30, 2024 and December 31, 2023, respectively, which were included in prepaid and other current assets in the condensed consolidated balance sheets.

The Company had payables to affiliates of $ 2,939 and $ 1,351 as of September 30, 2024 and December 31, 2023 respectively, which were included in accrued liabilities in the condensed consolidated balance sheets.

Receivables and payables due from/to affiliates are generally non-trade.

The Company had no sales to affiliates for the three months ended September 30, 2024 and 2023, respectively and sales to affiliates of $ 2,110 and $ 2,457 for the nine months ended September 30, 2024 and 2023, respectively.

There were no purchases from affiliates for the three and nine months ended September 30, 2024, respectively and purchases from affiliates were $ 236 for the three and nine months ended September 30, 2023, respectively.

AND SUBSIDIARIES

3 unchanged sentences

A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows:

September 30,

2024 December 31,

6 unchanged sentences

$ 571,721 $ 576,904

Depreciation expense was $ 18,108 and $ 36,523 for the three and six months ended June 30, 2024, respectively.

Depreciation expense was $ 17,455 and $ 34,147 for the three and six months ended June 30, 2023, respectively.

Depreciation expense was $ 19,702 and $ 56,225 for the three and nine months ended September 30, 2024, respectively.

Depreciation expense was $ 17,773 and $ 51,920 for the three and nine months ended September 30, 2023, respectively.

Long-term Debt:

The summary of long-term debt is as follows:

September 30,

2024 December 31,

10 unchanged sentences

As a result of the amendment, there is no longer a credit spread adjustment of 10 basis points.

The interest rate on the 2024 Term Loan Facility was 7.50 % as of September 30, 2024.

Debt extinguishment costs resulting from Term Loan amendments

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, the Company recorded $ 4,471 of third-party financing costs as debt extinguishment costs in the condensed consolidated income statement for the three and six months ended June 30, 2024 and capitalized $ 2,183 of original issued discount within long-term debt, excluding current portion on the condensed consolidated balance sheets as of June 30, 2024.

In addition, previous unamortized deferred financing costs of $ 30 and original issue discount of $ 59 associated with the previously outstanding debt were written off as debt extinguishment costs for the three and six months ended June 30, 2024.

The interest rate on the 2024 Term Loan Facility was 7.59 % as of June 30, 2024.

As a result, the Company recorded $ 4,471 of third-party financing costs as debt extinguishment costs in the condensed consolidated income statement for the nine months ended September 30, 2024 and capitalized $ 2,183 of original issued discount within long-term debt, excluding current portion in the condensed consolidated balance sheets as of September 30, 2024.

In addition, previously unamortized deferred financing costs of $ 30 and original issue discount of $ 59 associated with the previous outstanding debt were written off as debt extinguishment costs for the nine months ended September 30, 2024.

AND SUBSIDIARIES

1 unchanged sentence

(Dollars in thousands, except share and per share amounts)

The borrowings under the senior secured asset-based lending revolving credit facility (“ABL Facility”) bears interest at a rate equal to an adjusted term SOFR, which includes a credit spread adjustment of 10 basis points or the base rate plus a margin of between 1.25 % to 1.75 % or 0.25 % to 0.75 %, respectively.

The interest rate on the ABL Facility was 8.75 % as of June 30, 2024.

The borrowings under the senior secured asset-based lending revolving credit facility (“ABL Facility”) bear interest at a rate equal to an adjusted term SOFR, which includes a credit spread adjustment of 10 basis points or the base rate plus a margin of between 1.25 % to 1.75 % or 0.25 % to 0.75 %, respectively.

The interest rate on the ABL Facility was 8.25 % as of September 30, 2024.

Fair Value of Debt

The fair value of a financial instrument is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

As of June 30, 2024 and December 31, 2023, the fair value of the Company’s term loan facility was $ 873,000 and $ 876,403 , respectively.

As of September 30, 2024 and December 31, 2023, the fair value of the Company’s term loan facility was $ 867,544 and $ 876,403 , respectively.

The fair value is classified as Level 2 based upon the fair value hierarchy (see Note 4 to these condensed consolidated financial statements for further information on fair value measurements).

15 unchanged sentences

The Company hedges the interest rate fluctuations on debt obligations through interest rate cap agreements.

The Company records these agreements at fair value as assets or liabilities in its condensed consolidated balance sheets.

The Company records these agreements at fair value as assets or liabilities in the condensed consolidated balance sheets.

As the derivatives are designated and qualify as cash flow hedges, the gains or losses on the interest rate cap agreements are recorded in stockholders’ equity as a component of other comprehensive income, net of tax.

2 unchanged sentences

The following table provides a summary of the Company’s interest rate cap agreements:

Financial instrument Number of instruments In effect as of June 30, 2024

Current notional amount of instruments in effect Annuitized premium of instruments in effect

Financial instrument Number of instruments In effect as of September 30, 2024

Current notional amount of instruments in effect Annuitized premium of instruments in effect Cap rate in effect for all agreements at September 30, 2024

Interest rate cap 5 3 $ 675,000 $ 24,817 1.00 %

The current notional amounts of the three interest rate cap agreements in effect at June 30, 2024 are $ 250,000 , $ 250,000 and $ 150,000 .

The current notional amounts of the three interest rate cap agreements in effect at September 30, 2024 are $ 250,000 , $ 250,000 and $ 175,000 .

The Company entered into a $ 250,000 interest rate cap to mitigate interest rate volatility from August 2022 to October 2024, a $ 250,000 interest rate cap agreement to mitigate interest rate volatility from September 2023 to October 2025 and a $ 175,000 interest rate cap agreement to mitigate interest rate volatility from August 2024 to July 2026.

The $ 150,000 interest rate cap agreement will increase to $ 175,000 to mitigate interest rate volatility from August 2024 to July 2026.

The cap rate in effect at June 30, 2024 for all agreements in effect was 1.00 %.

The Company also entered into a forward starting interest rate cap agreement to mitigate interest volatility from November 2024 to October 2026.

The Company had a $ 150,000 interest rate cap agreement to mitigate interest rate volatility from August 2023 to July 2024.

The Company also entered into two forward starting interest rate cap agreements to mitigate interest volatility from November 2024 to October 2026 and July 2026 to July 2028.

AND SUBSIDIARIES

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This amendment changed the previously annuitized premiums on the existing interest rate cap agreements.

The fair values of derivative instruments held as of June 30, 2024 and December 31, 2023, respectively are shown below:

Balance sheet location June 30,

The fair values of derivative instruments held as of September 30, 2024 and December 31, 2023, respectively are shown below:

Balance sheet location September 30,

2024 December 31,

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Derivatives designated as cash flow hedges:

Interest rate caps Accrued liabilities $ 528 $ —

Interest rate caps Other long-term liabilities 2,751 2,496

Total derivative liabilities $ 3,279 $ 2,496

The following table shows the effect of the Company’s derivative instruments designated as cash flow hedges on AOCI for the three and six months ended June 30, 2024 and 2023, respectively:

Three months ended June 30,

The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on AOCI for the three and nine months ended September 30, 2024 and 2023, respectively:

Three months ended September 30,

Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income

Interest rate caps Interest (expense) income $ ( 10,828 ) $ ( 4,711 ) $ 7,294 $ ( 6,048 )

Six months ended June 30,

Nine months ended September 30,

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(Dollars in thousands, except share and per share amounts)

The following table shows the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of income for the three and six months ended June 30, 2024 and 2023, respectively:

The following table shows the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of income for the three and nine months ended September 30, 2024 and 2023, respectively:

Location and amount of gain (loss) recognized in income on cash flow hedging relationships

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Amount reclassified from AOCI into income 4,711 6,048 14,029 17,933

The amount of unrealized losses in AOCI related to the Company’s cash flow hedges that is expected to be reclassified to the condensed consolidated statement of income over the next twelve months is $ 8,700 as of June 30, 2024.

The amount of net unrealized gains in AOCI related to the Company’s cash flow hedges that is expected to be reclassified to the condensed consolidated statement of income over the next twelve months is $ 5,456 as of September 30, 2024.

Income Taxes:

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 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 rates for the three and six months ended June 30, 2024 and 2023, respectively, fluctuated primarily due to the increased discrete tax impact relative to pre-tax book income related to a stock compensation shortfall and tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions.

The effective income tax rate for the three months ended September 30, 2024 was 24.0 %, compared to 32.3 % for the three months ended September 30, 2023.

The effective income tax rate for the nine months ended September 30, 2024 was 26.9 %, compared to 29.9 % for the nine months ended September 30, 2023.

The Company’s effective income tax rates for the three and nine months ended September 30, 2024 and 2023, respectively, 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 and a tax benefit related to state tax refunds associated with prior tax years recorded during the current quarter.

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.

federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 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.

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, 2023 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation, a discrete tax expense associated with the recording of accrued penalties and interest associated with historical uncertain tax positions, and a discrete tax benefit connected to state and local tax law changes.

federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2023 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation, a discrete tax expense associated with the recording of accrued penalties and interest associated with historical uncertain tax positions and a discrete tax benefit connected to state and local tax law changes.

During the fourth quarter of 2024, the Company expects to recognize $ 8,023 of previously net unrecognized tax benefits, excluding interest and penalties, primarily due to the expiration of statutes of limitations during October 2024.

Benefit Plans:

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Expected return on plan assets ( 837 ) ( 826 ) ( 2,511 ) ( 2,479 )

Settlement (gain) loss ( 6 ) 29 ( 6 ) 29

Settlement loss (gain) — 22 ( 6 ) 50

Net periodic (benefit) expense $ ( 30 ) $ 59 $ ( 96 ) $ 161

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All claims that are probable and reasonably estimable have been accrued for in the Company’s condensed consolidated financial statements.

When these matters are ultimately concluded and determined, the Company believes that there will be no material adverse effect on its consolidated financial position, results of operations or liquidity.

When these matters are ultimately concluded and determined, the Company believes that there will be no material adverse effect on its condensed consolidated financial position, results of operations or liquidity.

Related Party Transactions:

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Under the terms of the ZI Partnership Agreement, the Partnership leases certain land used in its Kansas City production facilities from Ecovyst.

This lease, which has been recorded as an operating lease, provided for rental payments to the Company of $ 78 and $ 155 for the three and six months ended June 30, 2024 and 2023, respectively.

This lease, which has been recorded as an operating lease, provided for rental payments to the Company of $ 77 and $ 232 for the three and nine months ended September 30, 2024 and 2023, respectively.

The terms of this lease are evergreen as long as the ZI Partnership Agreement is in place.

The Partnership had no sales to the Company for the three and six months ended June 30, 2024 and 2023, respectively.

The Partnership had no sales to the Company for the three and nine months ended September 30, 2024, respectively and sales to the Company were $ 236 for the three and nine months ended September 30, 2023, respectively.

The Partnership purchases certain raw materials from the Company and was charged for various manufacturing costs incurred at the Company’s Kansas City production facility.

The amount of these costs charged to the Partnership were $ 6,050 and $ 10,084 for the three and six months ended June 30, 2024, respectively and $ 5,028 and $ 10,869 for the three and six months ended June 30, 2023, respectively.

The amount of these costs charged to the Partnership were $ 3,553 and $ 13,637 for the three and nine months ended September 30, 2024, respectively and $ 4,266 and $ 15,135 for the three and nine months ended September 30, 2023, respectively.

Certain administrative, marketing, engineering, management-related and research and development services are provided to the Partnership by the Company.

The Partnership was charged $ 4,600 and $ 8,900 for the three and six months ended June 30, 2024 and $ 3,618 and $ 7,252 for the three and six months ended June 30, 2023, respectively, for these services.

In addition, the Partnership was charged certain product demonstration costs of $ 238 and $ 595 for the three and six months ended June 30, 2024, respectively and $ 428 and $ 928 for the three and six months ended June 30, 2023, respectively.

These charges to the Partnership are recorded as reductions in either cost of goods sold or selling, general and administrative expenses in the consolidated statements of income, depending on the nature of the expenditures.

The Company had an accounts receivable from the Partnership of $ 5,008 and $ 3,164 as of June 30, 2024 and December 31, 2023, respectively.

There were no accounts payable with the Partnership as of June 30, 2024 and December 31, 2023, respectively.

The Partnership was charged $ 4,132 and $ 13,032 for the three and nine months ended September 30, 2024, respectively and $ 3,625 and $ 10,877 for the three and nine months ended September 30, 2023, respectively, for these services.

In addition, the Partnership was charged certain product demonstration costs of $ 379 and $ 974 for the three and nine months ended September 30, 2024, respectively and $ 490 and $ 1,418 for the three and nine months ended September 30, 2023, respectively.

These charges to the Partnership are recorded as reductions in either cost of goods sold or selling, general and administrative expenses in the condensed consolidated statements of income, depending on the nature of the expenditures.

AND SUBSIDIARIES

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(Dollars in thousands, except share and per share amounts)

The Company had an accounts receivable from the Partnership of $ 2,791 and $ 3,164 as of September 30, 2024 and December 31, 2023, respectively.

Accounts payable to the Partnership was immaterial as of September 30, 2024.

There were no accounts payable with the Partnership as of December 31, 2023.

Reportable Segments:

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(1) Excludes the Company’s proportionate share of sales from the Zeolyst Joint Venture accounted for using the equity method (see Note 9 to these condensed consolidated financial statements for further information).

The proportionate share of sales excluded is $ 29,024 and $ 52,505 for the three and six months ended June 30, 2024, respectively.

The proportionate share of sales excluded is $ 44,689 and $ 66,763 for the three and six months ended June 30, 2023, respectively.

The proportionate share of sales excluded is $ 30,908 and $ 83,413 for the three and nine months ended September 30, 2024, respectively.

The proportionate share of sales excluded is $ 36,958 and $ 103,721 for the three and nine months ended September 30, 2023, respectively.

(2) The Company defines Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below.

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(3) The Adjusted EBITDA for the Company’s Advanced Materials & Catalysts segment includes the Company’s 50 % portion of the Adjusted EBITDA from the Zeolyst Joint Venture.

For the three months ended June 30, 2024, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 5,559 , which includes $ 1,392 of equity in net income plus $ 940 of amortization of investment in affiliate step-up and $ 3,227 of joint venture depreciation, amortization and interest.

For the six months ended June 30, 2024, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 12,486 , which includes $ 3,464 of equity in net income plus $ 2,541 of amortization of investment in affiliate step-up and $ 6,481 of joint venture depreciation, amortization and interest.

For the three months ended June 30, 2023, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 16,194 , which includes $ 11,382 of equity in net income plus $ 1,601 of amortization of investment in affiliate step-up and $ 3,212 of joint venture depreciation, amortization and interest.

For the six months ended June 30, 2023, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 21,630 , which includes $ 11,608 of equity in net income plus $ 3,201 of amortization of investment in affiliate step-up and $ 6,821 of joint venture depreciation, amortization and interest.

For the three months ended September 30, 2024, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 3,281 , which includes $ 922 of equity in net loss plus $ 610 of amortization of investment in affiliate step-up and $ 3,593 of joint venture depreciation, amortization and interest.

For the nine months ended September 30, 2024, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 15,767 , which includes $ 2,543 of equity in net income plus $ 3,151 of amortization of investment in affiliate step-up and $ 10,073 of joint venture depreciation, amortization and interest.

For the three months ended September 30, 2023, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 9,640 , which includes $ 4,748 of equity in net income plus $ 1,601 of amortization of investment in affiliate step-up and $ 3,291 of joint venture depreciation, amortization and interest.

For the nine months ended September 30, 2023, the Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $ 31,270 , which includes $ 16,356 of equity in net income plus $ 4,802 of amortization of investment in affiliate step-up and $ 10,112 of joint venture depreciation, amortization and interest.

AND SUBSIDIARIES

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Debt extinguishment costs — — 4,560 —

Net (gain) loss on asset disposals ( 34 ) 1,128 614 2,306

Net loss on asset disposals 218 1,020 832 3,326

Foreign exchange (gain) loss ( 1 ) 774 78 ( 362 )

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Adjusted EBITDA from reportable segments $ 66,027 $ 71,034 $ 183,076 $ 206,316

Stock-Based Compensation:

The Company has an equity incentive plan under which it grants common stock awards to employees, directors and affiliates of the Company.

At June 30, 2024, 8,032,299 shares of common stock were available for issuance under the plan.

The Company historically has settled these awards through the issuance of new shares.

During the six months ended June 30, 2024, the Company granted 1,126,166 RSUs under its equity incentive plan.

Each RSU provides the recipient with the right to receive a share of common stock subject to graded vesting terms based on service, which for the awards granted during the six months ended June 30, 2024, generally requires approximately one year of service for members of the Company’s board of directors and approximately three years of service for employees.

The value of the RSUs granted during the six months ended June 30, 2024 was based on the average of the high and low trading prices of the Company’s common stock on the NYSE on the preceding trading day, in accordance with the Company’s policy for valuing such awards.

Compensation expense related to the RSUs is recognized on a straight-line basis over the respective vesting period.

Capital expenditures for the Company’s reportable segments are shown in the following table:

Nine months ended

September 30,

Capital expenditures:

Ecoservices $ 42,107 $ 44,033

Advanced Materials & Catalysts (1)

Corporate (2)

Capital expenditures per the condensed consolidated statements of cash flows $ 51,725 $ 53,642

(1) Excludes the Company’s proportionate share of capital expenditures from the Zeolyst Joint Venture.

(2) Includes corporate capital expenditures, the cash impact from changes in capital expenditures in accounts payable and capitalized interest.

AND SUBSIDIARIES

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(Dollars in thousands, except share and per share amounts)

During the six months ended June 30, 2024, the Company granted 535,629 PSUs (at target) under its equity incentive plan.

The PSUs granted during the six months ended June 30, 2024 provide the recipients with the right to receive shares of common stock dependent on 50 % of a Company-specific financial performance target and 50 % on the relative increase in the total shareholder return (“TSR”) goal (“the Performance measures”).

Stock-Based Compensation:

The Company has an equity incentive plan under which it grants common stock awards to employees, directors and affiliates of the Company.

At September 30, 2024, 8,081,073 shares of common stock were available for issuance under the plan.

The Company settles these awards through the issuance of treasury shares under its equity incentive plan.

During the nine months ended September 30, 2024, the Company granted 1,126,166 RSUs under its equity incentive plan.

Each RSU provides the recipient with the right to receive a share of common stock subject to graded vesting terms based on service, which for the awards granted during the nine months ended September 30, 2024, generally requires approximately one year of service for members of the Company’s board of directors and approximately three years of service for employees.

The value of the RSUs granted during the nine months ended September 30, 2024 was based on the average of the high and low trading prices of the Company’s common stock on the NYSE on the preceding trading day, in accordance with the Company’s policy for valuing such awards.

Compensation expense related to the RSUs is recognized on a straight-line basis over the respective vesting period.

During the nine months ended September 30, 2024, the Company granted 535,629 PSUs (at target) under its equity incentive plan.

The PSUs granted during the nine months ended September 30, 2024 provide the recipients with the right to receive shares of common stock dependent on 50 % of a Company-specific financial performance target and 50 % on the relative increase in the total shareholder return (“TSR”) goal (“the Performance measures”).

The Performance measures are measured independently of each other, but achievement of both metrics is measured on the same three-year performance period from January 1, 2024 through December 31, 2026 (“Performance period”).

Depending on the Company’s performance relative to the Performance measures, each PSU award recipient is eligible to receive a percentage of the target number of shares granted to the recipient, ranging from 50 % to 200 %.

The PSUs, to the extent earned, will vest on the date the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”) certifies the achievement of the Performance measures for the Performance period, which will occur subsequent to the end of the Performance period and after the Company files its annual consolidated financial statements for the year ending December 31, 2026.

3 unchanged sentences

Because a market condition is not considered a vesting condition, it is reflected in the grant date fair value of the award and the associated compensation cost based on the fair value of the award is recognized over the Performance period, regardless of whether the Company actually achieves the market condition or the level of achievement, as long as service is provided by the recipient.

The Company used a Monte Carlo simulation to estimate the $ 11.64 weighted average fair value of the awards granted subject to the TSR goal during the six months ended June 30, 2024, with the following weighted average assumptions:

The Company used a Monte Carlo simulation to estimate the $ 11.64 weighted average fair value of the awards granted, subject to the TSR goal during the nine months ended September 30, 2024, with the following weighted average assumptions:

Expected dividend yield — %

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Expected term (in years) 2.95

In February 2024, the Compensation Committee certified the achievement of the performance metrics for the three-year period ended December 31, 2023, related to the PSUs granted during the year ended December 31, 2021.

The PSUs granted during the year ended December 31, 2021 provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal, and are generally subject to the provision of service through the vesting date of the award.

The TSR goal was based on the Company’s actual TSR percentage increase over the performance period.

The awards vested during the six months ended June 30, 2024 with no percentage of the TSR goal earned.

AND SUBSIDIARIES

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(Dollars in thousands, except share and per share amounts)

The PSUs granted during the year ended December 31, 2021 provide the recipients with the right to receive shares of common stock dependent on the achievement of a TSR goal and are generally subject to the provision of service through the vesting date of the award.

The TSR goal was based on the Company’s actual TSR percentage increase over the performance period.

The awards vested during the nine months ended September 30, 2024 with no percentage of the TSR goal earned.

Award Activity

The following table summarizes the activity for the Company’s RSUs and PSUs for the six months ended June 30, 2024:

The following table summarizes the activity for the Company’s RSUs and PSUs for the nine months ended September 30, 2024:

Restricted Stock Units Performance Stock Units

5 unchanged sentences

Forfeited ( 108,833 ) $ 9.27 ( 141,437 ) $ 12.82

Nonvested as of June 30, 2024 2,067,609 $ 9.36 1,368,349 (1) $ 11.10

Nonvested as of September 30, 2024 1,979,873 $ 9.37 1,353,409 (1) $ 11.10

(1) Based on target.

During the six months ended June 30, 2024, the Company also granted 4,540 of RSAs with a weighted average grant date fair value of $ 8.81 per share that immediately vested.

Cash proceeds received by the Company from the exercise of stock options were not material for the six months ended June 30, 2024.

During the nine months ended September 30, 2024, the Company also granted 4,540 of RSAs with a weighted average grant date fair value of $ 8.81 per share that immediately vested.

Cash proceeds received by the Company from the exercise of stock options were not material for the nine months ended September 30, 2024.

Stock-Based Compensation Expense

For the three months ended June 30, 2024 and 2023, stock-based compensation expense for the Company was $ 3,827 and $ 5,002 , respectively.

The associated income tax benefit based on the applicable statutory rate recognized in the condensed consolidated statements of income for the three months ended June 30, 2024 and 2023 was $ 939 and $ 1,181 , respectively.

For the six months ended June 30, 2024 and 2023, stock-based compensation expense for the Company was $ 7,507 and $ 9,070 , respectively.

The associated income tax benefit based on the applicable statutory rate recognized in the condensed consolidated statements of income for the six months ended June 30, 2024 and 2023 was $ 1,841 and $ 2,154 , respectively.

As of June 30, 2024, unrecognized compensation cost was $ 14,391 for RSUs and $ 9,474 for PSUs considered probable of vesting, and the weighted-average period over which these costs are expected to be recognized at June 30, 2024 was 1.84 years for the RSUs and 2.13 years for the PSUs.

For the three months ended September 30, 2024 and 2023, stock-based compensation expense for the Company was $ 2,952 and $ 3,477 , respectively.

The associated income tax benefit based on the applicable statutory rate recognized in the condensed consolidated statements of income for the three months ended September 30, 2024 and 2023 was $ 724 and $ 826 , respectively.

For the nine months ended September 30, 2024 and 2023, stock-based compensation expense for the Company was $ 10,460 and $ 12,547 , respectively.

The associated income tax benefit based on the applicable statutory rate recognized in the condensed consolidated statements of income for the nine months ended September 30, 2024 and 2023 was $ 2,565 and $ 2,980 , respectively.

As of September 30, 2024, unrecognized compensation cost of $ 11,283 for RSUs and $ 6,341 for PSUs are considered probable of vesting and the weighted-average period over which these costs are expected to be recognized at September 30, 2024 was 1.71 years for the RSUs and 1.77 years for the PSUs.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

Earnings per Share:

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Potential common shares reflect (1) unvested RSAs and RSUs with service vesting conditions, (2) PSUs with vesting conditions considered probable of achievement and (3) options to purchase common stock, all of which have been included in the diluted earnings per share calculation using the treasury stock method.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

The reconciliation from basic to diluted weighted average shares outstanding is as follows:

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Diluted income per share $ 0.12 $ 0.14 $ 0.20 $ 0.34

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective period that were excluded from the calculation of diluted earnings per share:

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These stock options and anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share or reducing diluted loss per share.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

Supplemental Cash Flow Information:

The following table presents supplemental cash flow information for the Company:

Six months ended

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September 30,

Cash paid during the period for:

9 unchanged sentences

Subsequent Events:

On July 24, 2024, the Company completed an equity investment in Pajarito Powder LLC, an innovative materials science company that focuses on supports and catalysts required for the manufacture and operation of electrolyzers and fuel cells, for $ 4,500 .

Other than the above, the Company has evaluated subsequent events since the balance sheet date and determined that there are no additional items to disclose.

T he Company has evaluated subsequent events since the balance sheet date and determined that there are no additional items to disclose.

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 1. Financial Statements