What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-02 · 278 added, 102 removed, 278 unchanged (58% of the section changed)

36 unchanged sentences

• significant trade developments, including tariffs, have had and may continue to have an adverse effect on us;

• the timing and outcome, if any, of our strategic review process for our Advanced Materials & Catalysts segment

• that we have a material weakness in our internal control over financial reporting and that we may identify additional material weaknesses in the future;

18 unchanged sentences

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.

The Company did not repurchase any of its common stock pursuant to the stock repurchase program during the three months ended March 31, 2025 and 2024.

As of March 31, 2025, $229.6 million was available for share repurchases under the program.

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

For the six months ended June 30, 2025, the Company repurchased 2,926,152 shares on the open market at an average price of $7.47 per share, for a total of $21.9 million

excluding brokerage commissions and accrued excise tax.

As of June 30, 2025, $207.7 million was available for share repurchases under the program.

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

Key Performance Indicators

2 unchanged sentences

Adjusted EBITDA, Adjusted Net Income, and Net Debt are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition.

EBITDA consists of net (loss) income attributable to continuing operations before interest, taxes, depreciation and amortization.

Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture.

Adjusted Net Income consists of net (loss) income adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance.

EBITDA consists of net income attributable to continuing operations before interest, taxes, depreciation and amortization.

Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net income and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture.

Adjusted Net Income consists of net income adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net income that we do not consider indicative of our ongoing operating performance.

Net Debt consists of total debt less cash and cash equivalents.

4 unchanged sentences

Our presentation of Adjusted EBITDA and Adjusted Net Income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

Reconciliations of Adjusted EBITDA, Adjusted Net Income to GAAP net (loss) income and Net Debt to GAAP total debt are included in this “Item 2.

Reconciliations of Adjusted EBITDA, Adjusted Net Income to GAAP net income and Net Debt to GAAP total debt are included in this “Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for each of the respective periods.

29 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, 2025 and for the year ended December 31, 2024 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, 2025 and for the year ended December 31, 2024 in currencies other than the U.S.

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

3 unchanged sentences

Results of Operations

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

The following is a summary of our financial performance for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

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

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

• Sales increased $17.3 million to $200.1 million.

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

• Gross profit decreased $13.6 million to $25.6 million.

The decrease in gross profit was primarily due to increased manufacturing costs driven by higher turnaround costs and inflation as well as lower sales volume.

Operating (Loss) Income

• Operating (loss) income decreased by $14.8 million to $0.9 million.

The decrease in operating (loss) income was due to a decrease in gross profit and higher other operating expense, net, partially offset by lower selling, general and administrative expenses.

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

• Gro ss profit decreased $4.0 million to $49.7 million.

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

Operating Income

• Operating income decreased by $10.1 million to $17.8 million.

The decrease in operating income reflects lower gross profit and higher other operating expenses, net.

Equity in Net Income of Affiliated Companies

• Equity in net income of affiliated companies for the three months ended March 31, 2025 was $8.9 million, compared to $2.1 million for the three months ended March 31, 2024.

The increase of $6.8 million was due to higher earnings from the Zeolyst Joint Ventur e during the three months ended March 31, 2025, driven by higher sales volume.

The following is our unaudited condensed consolidated statements of (loss) income and a summary of financial results for the three months ended March 31, 2025 and 2024:

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

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

Three months ended

March 31, Change

June 30, Change

2025 2024 $ %

6 unchanged sentences

Other operating expense, net 9.2 3.1 6.1 196.8 %

Operating (loss) income (0.9) 13.9 (14.8) (106.5) %

Operating (loss) income margin (0.6) % 8.7 %

Operating income 17.8 27.9 (10.1) (36.2) %

Operating income margin 8.9 % 15.2 %

Equity in net (income) from affiliated companies (1.9) (1.4) (0.5) 35.7 %

Interest expense, net 11.1 12.9 (1.8) (14.0) %

Debt modification and extinguishment costs 1.0 — 1.0 NM

Debt modification and extinguishment costs — 4.6 (4.6) (100.0) %

Other expense, net 0.6 0.4 0.2 50.0 %

(Loss) income before income taxes (4.2) 2.4 (6.6) (275.0) %

(Benefit) provision for income taxes (0.6) 1.2 (1.8) (150.0) %

Income before income taxes 8.0 11.4 (3.4) (29.8) %

Provision for income taxes 2.0 3.1 (1.1) (35.5) %

Effective tax rate 25.6 % 27.1 %

Net (loss) income $ (3.6) $ 1.2 $ (4.8) NM

Net income $ 6.0 $ 8.3 $ (2.3) (27.7) %

Three months ended

March 31, Change

June 30, Change

2025 2024 $ %

3 unchanged sentences

Total sales $ 200.1 $ 182.8 $ 17.3 9.5 %

Sales in Ecoservices for the three months ended June 30, 2025 were $176.0 million, an increase of $22.1 million, or 14.4%, compared to sales of $153.9 million for the three months ended June 30, 2024.

The increase in sales was due to higher average selling prices of $26.3 million, partially offset by lower sales volume of $4.2 million.

The increase in average selling prices reflect the pass-through effect of higher sulfur costs, favorable contractual pricing for regeneration services, and strong pricing in virgin sulfuric acid.

The impact associated with the pass-through of high sulfur costs was approximately $20 million for the three months ended June 30, 2025.

The decrease in sales volume was primarily related to lower regeneration services, partially offset by the contribution of sales volume from the Waggaman location.

The lower sales volume in regeneration services was driven primarily by unplanned and extended customer down-time.

Advanced Materials & Catalysts:

Sales in Advanced Materials & Catalysts for the three months ended June 30, 2025 were $24.1 million, a decrease of $4.8 million, or 16.6%, compared to sales of $28.9 million for the three months ended June 30, 2024.

The decrease of $4.8 million was primarily due to the timing of event-driven, niche custom catalysts sales.

Gross profit for the three months ended June 30, 2025 was $49.7 million, a decrease of $4.0 million, or 7.4%, compared to $53.7 million for the three months ended June 30, 2024.

The decrease in gross profit was primarily due to lower sales volume and mix of $7.8 million and higher manufacturing costs of $2.5 million, exclusive of the approximately $20 million of higher sulfur costs and partially offset by higher average selling prices of $6.3 million, exclusive of the pass-through of the higher sulfur costs.

The cost of sulfur is generally passed-through to customers at the same rate as incurred resulting in no net impact to gross profit.

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

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $22.7 million for the three months ended June 30, 2025 and 2024.

An increase in compensation-related expenses of $0.6 million was offset by a decrease of $0.6 million in professional fees compared to the prior year.

Other Operating Expense, Net

Other operating ex pense, net for the three months ended June 30, 2025 was $9.2 million, an increase of $6.1 million, compared to $3.1 million for the three months ended June 30, 2024.

The increase in other operating expense, net was primarily due to an increase in other expenses, primarily related to litigation and tax charges of $2.5 million, restructuring costs of $0.9 million, transaction costs of $2.5 million, and loss on disposal of assets of $0.3 million compared to the prior year.

Equity in Net Income of Affiliated Companies

Equity in net income of affiliated comp anies for the three months ended June 30, 2025 was $1.9 million, compared to $1.4 million for the three months ended June 30, 2024.

The increase was due to $0.5 million of higher earnings from the Zeolyst Joint Venture during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

The increase in earnings from the Zeolyst Joint Venture was prim arily due to lower amortization of investment in affiliate step-up.

Interest Expense, Net

Interest expense, net for the three month s ended June 30, 2025 was $11.1 million, a decrease of $1.8 million, as compared to $12.9 million for the three months ended June 30, 2024.

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

Debt Modification and Extinguishment Costs

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

On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031.

The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was primarily a modification of debt.

As a result, we recorded $4.5 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of income during the three months ended June 30, 2024 .

In addition, previously unamortized deferred financing costs and original issue discount of $0.1 million associated with the existing senior secured term loan facility were written off as debt extinguishment costs for the three months ended June 30, 2024.

Other Expense, Net

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

Provision For Income Taxes

The provision for income taxes for the three months ended June 30, 2025 was $2.0 million, compared to $3.1 million for the three months ended June 30, 2024.

The effective income tax rate for the three months ended June 30, 2025 was 25.6%, compared to 27.1% for the three months ended June 30, 2024.

The Company’s quarter over quarter effective income tax rate has fluctuated primarily due to a reduced discrete tax impact relative to pre-tax book income.

The discrete tax items relate to a stock compensation shortfall, tax expense associated with the recording of accrued penalties and interest on historical uncertain tax positions, state tax law changes and a tax benefit related to state tax refunds associated with prior tax years.

The difference between the U.S.

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

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

Adjusted EBITDA

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

Three months ended

June 30, Change

2025 2024 $ %

(in millions, except percentages)

Adjusted EBITDA:

Ecoservices $ 49.8 $ 49.7 $ 0.1 0.2 %

Sales in Ecoservices for the three months ended March 31, 2025 were $143.1 million, an increase of $1.5 million, or 1.1%, compared to sales of $141.6 million for the three months ended March 31, 2024.

The change in sales reflects higher average selling prices of $6.0 million, inclusive of the impact associated with the pass-through of higher sulfur costs of approximately $7 million, offset by lower sales volume of $4.5 million.

Average selling prices were higher primarily due to the pass-through of sulfur costs and favorable contract-pricing for regeneration services, partially offset by the pass-through of lower energy and other indexed costs.

Sales volume of virgin sulfuric acid and regeneration services were lower for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, driven by maintenance turnaround activity at our facilities and our customers’ facilities during the first quarter of 2025.

Advanced Materials & Catalysts (2)

Sales in Advanced Materials & Catalysts for the three months ended March 31, 2025 were $19.1 million, an increase of $0.2 million, or 1.1%, compared to sales of $18.9 million for the three months ended March 31, 2024.

The change in sales was primarily due to higher sales of niche custom catalysts associated with order timing, partially offset by lower sales of advanced silicas used for the production of polyethylene compared to the three months ended March 31, 2024.

Gross profit for the three months ended March 31, 2025 was $25.6 million, a decrease of $13.6 million, or 34.7%, compared to $39.2 million for the three months ended March 31, 2024.

The decrease in gross profit was primarily driven by unfavorable manufacturing costs of $10.3 million, lower average selling prices of $1.0 million, exclusive of the approximately $7 million of pass-through of higher sulfur costs, and lower sales volume of $2.3 million.

Average selling prices were lower primarily due to the pass-through of lower energy and other indexed costs.

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

The decrease in sales volume was primarily related to maintenance turnaround activity at our facilities and our customers’ facilities during the first quarter of 2025.

13.7 14.7 (1.0) (6.8) %

Unallocated corporate expenses (7.8) (7.5) (0.3) (4.0) %

Total $ 55.7 $ 56.9 $ (1.2) (2.1) %

(1) We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below.

Our management evaluates the performance of our segments and allocates resources based primarily on Adjusted EBITDA.

Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity.

Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.

(2) The Adjusted EBITDA for the Advanced Materials & Catalysts segment includes our 50% portion of the Adjusted EBITDA from the Zeolyst Joint Venture.

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

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

Adjusted EBITDA for the three months ended June 30, 2025 was $49.8 million, an increase of $0.1 million, or 0.2%, compared to $49.7 million for the three months ended June 30, 2024.

The increase in Adjusted EBITDA was a result of favorable contractual pricing for regeneration services and strong pricing in virgin sulfuric acid along with lower turnaround costs, largely offset by lower regeneration services volume due to unplanned and extended customer down time and higher manufacturing costs driven by general inflation.

Advanced Materials & Catalysts:

Adjusted EBITDA for the three months ended June 30, 2025 was $13.7 million, a decrease of $1.0 million, or 6.8%, compared to $14.7 million for the three months ended June 30, 2024.

The decrease in Adjusted EBITDA was primarily driven by lower sales volume and mix due to the timing of niche custom catalysts sales.

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

Three months ended

(in millions)

Reconciliation of net income to Adjusted EBITDA

Net income $ 6.0 $ 8.3

Provision for income taxes 2.0 3.1

Interest expense, net 11.1 12.9

Depreciation and amortization 23.9 21.6

EBITDA 43.0 45.9

Joint venture depreciation, amortization and interest (a)

Amortization of investment in affiliate step-up (b)

Debt modification and extinguishment costs — 4.6

Net loss on asset disposals (c)

Foreign currency exchange gain (d)

LIFO benefit (e)

Transaction and other related costs (f)

Equity-based compensation 3.4 3.8

Restructuring, integration and business optimization expenses (g)

Adjusted EBITDA $ 55.7 $ 56.9

(a) We use Adjusted EBITDA as a performance measure to evaluate our financial results.

Because our Advanced Materials & Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.

(b) Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of PQ Holdings Inc.

and Eco Services Operations LLC in May 2016.

We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of the Zeolyst Joint Venture.

Amortization is primarily related to the fair value adjustments associated with intangible assets, including customer relationships and technical know-how.

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

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

(e) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S.

that are valued using the LIFO method, effectively reflecting the results as if these inventories were valued using the FIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.

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

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

(h) Other consists of adjustments for items that are not core to our ongoing business operations.

These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen.

Also included in this amount are adjustments to eliminate the benefit realized in cost of goods sold of the allocation of a portion of the contract manufacturing payments under the five-year agreement with the buyer of the Performance Chemicals business to the financing obligation under the failed sale-leaseback.

Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions).

Adjusted Net Income

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

Three 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 to Adjusted Net Income (1)(2)

Net income $ 8.0 $ 2.0 $ 6.0 $ 11.4 $ 3.1 $ 8.3

Amortization of investment in affiliate step-up (b)

0.6 0.1 0.5 0.9 0.2 0.7

Debt modification and extinguishment costs — — — 4.6 1.2 3.4

Net loss on asset disposals (c)

0.3 0.1 0.2 — — —

Foreign currency exchange gain (d)

— — — (0.1) — (0.1)

LIFO benefit (e)

(0.4) (0.1) (0.3) (1.5) (0.3) (1.2)

Transaction and other related costs (f)

2.7 0.6 2.1 0.1 — 0.1

Equity-based compensation 3.4 0.4 3.0 3.8 0.9 2.9

Restructuring, integration and business optimization expenses (g)

1.0 0.2 0.8 0.2 0.1 0.1

1.9 0.5 1.4 (0.2) (0.1) (0.1)

Adjusted Net Income $ 17.5 $ 3.8 $ 13.7 $ 19.2 $ 5.1 $ 14.1

(1) We define Adjusted Net Income as net income adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance.

Adjusted Net Income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition.

Adjusted Net Income may not be comparable with net income or Adjusted Net Income as defined by other companies.

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

The adjustments to net income are shown net of applicable tax rates as determined by the calculation of our quarterly tax provision under interim financial reporting for the three months ended June 30, 2025 and June 30, 2024, except for equity-based compensation.

The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec.

162(m) and adding the tax effect of equity-based stock compensation shortfall recorded as a discrete item.

Results of Operations

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

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

• Sales increased $18.9 million to $362.3 million.

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

• Gross profit decreased $17.6 million to $75.3 million.

The decrease in gross profit was primarily due to lower sales volume and higher manufacturing costs, partially offset by higher average selling prices.

Operating Income

• Operating income decreased by $24.9 million to $16.9 million.

The decrease in operating income was due to a decrease in gross profit and higher other operating expense, net, partially offset by lower selling, general and administrative expenses.

Equity in Net Income of Affiliated Companies

• Equity in net income of affiliated companies for the six months ended June 30, 2025 was $10.8 million, compared to $3.5 million for the six months ended June 30, 2024.

The increase of $7.3 million was due to higher earnings from the Zeolyst Joint Ventur e during the six months ended June 30, 2025, driven by higher sales volume.

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

Six months ended

June 30, Change

2025 2024 $ %

(in millions, except percentages)

Sales $ 362.3 $ 343.4 $ 18.9 5.5 %

Cost of goods sold 287.0 250.5 36.5 14.6 %

Gross profit 75.3 92.9 (17.6) (18.9) %

Gross profit margin 20.8 % 27.1 %

Selling, general and administrative expenses 44.0 44.3 (0.3) (0.7) %

Selling, general and administrative expenses for the three months ended March 31, 2025 were $21.3 million, a decrease of $0.3 million, as compared to $21.6 million for the three months ended March 31, 2024.

Other operating expense, net 14.4 6.8 7.6 111.8 %

Operating income 16.9 41.8 (24.9) (59.6) %

Operating income margin 4.7 % 12.2 %

Equity in net (income) from affiliated companies (10.8) (3.5) (7.3) 208.6 %

Interest expense, net 22.1 26.3 (4.2) (16.0) %

Debt modification and extinguishment costs 1.0 4.6 (3.6) (78.3) %

Other expense, net 0.7 0.6 0.1 16.7 %

Income before income taxes 3.9 13.8 (9.9) (71.7) %

Provision for income taxes 1.5 4.3 (2.8) (65.1) %

Effective tax rate 38.8 % 30.9 %

Net income $ 2.4 $ 9.5 $ (7.1) (74.7) %

Six months ended

June 30, Change

2025 2024 $ %

(in millions, except percentages)

Ecoservices $ 319.1 $ 295.6 $ 23.5 7.9 %

Advanced Materials & Catalysts 43.2 47.8 (4.6) (9.6) %

Total sales $ 362.3 $ 343.4 $ 18.9 5.5 %

Ecoservices :

Sales in Ecoservices for the six months ended June 30, 2025 were $319.1 million, an increase of $23.5 million, or 7.9%, compared to sales of $295.6 million for the six months ended June 30, 2024.

The increase in sales reflects higher average selling prices of $32.3 million, including the pass-through effect of higher sulfur costs of approximately $27 million, partially offset by lower sales volume of $8.8 million.

Average selling prices were higher primarily due to the pass-through effect of higher sulfur costs, favorable contract pricing for regeneration services and strong pricing in virgin sulfuric acid.

Sales volume of virgin sulfuric acid and regeneration services were lower for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, driven by unplanned and extended customer down-time and maintenance turnaround activity at our facilities, partially offset by the contribution of sales volume from the Waggaman location.

Advanced Materials & Catalysts:

Sales in Advanced Materials & Catalysts for the six months ended June 30, 2025 were $43.2 million, a decrease of $4.6 million, or 9.6%, compared to sales of $47.8 million for the six months ended June 30, 2024.

The change in sales was primarily due to the timing of niche custom catalysts sales and lower sales of advanced silicas used for the production of polyethylene compared to the six months ended June 30, 2024.

Gross profit for the six months ended June 30, 2025 was $75.3 million, a decrease of $17.6 million, or 18.9%, compared to $92.9 million for the six months ended June 30, 2024.

The decrease in gross profit was primarily driven by lower sales volume of $10.2 million and higher manufacturing costs of $12.7 million, exclusive of the approximately $27 million of higher sulfur costs, partially offset by higher average selling prices of $5.3 million, exclusive of the pass-through of higher sulfur costs.

The cost of sulfur is generally passed-through to customers at the same rate as incurred resulting in no net impact to gross profit.

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

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2025 were $44.0 million, a decrease of $0.3 million, as compared to $44.3 million for the six months ended June 30, 2024.

The decrease in selling, general and administrative expenses was mainly due to a decrease in stock compensation of $1.0 million and professional fees of $1.1 million, partially offset by an increase in other compensation-related expenses of $1.1 million and other expenses of $0.7 million.

Other Operating Expense, Net

Other operating expense, net for the three months e nded March 31, 2025 was $5.2 million, an increase of $1.5 million, compared to $3.7 million for the three months ended March 31, 2024.

The increase in other operating expense, net was mainly driven by an increase of $1.8 million in transaction costs, partially offset by a decrease in net losses on asset disposals of $0.5 million.

Other operating expense, net for the six months e nded June 30, 2025 was $14.4 million, an increase of $7.6 million, compared to $6.8 million for the six months ended June 30, 2024.

The increase in other operating expense, net was mainly driven by an increase in transaction costs of $4.3 million, restructuring costs of $0.8 million, and other costs of $2.7 million primarily related to legal and tax charges.

Equity in Net Income of Affiliated Companies

Equity in net income of affiliated companies for the three months ended March 31, 2025 was $8.9 million, compared to $2.1 million for the three months ended March 31, 2024.

The increase in earnings from the Zeolyst Joint Venture was driven by higher hydrocracking catalyst and specialty catalyst sales, partially offset by lower sales of catalysts used in emission control and customized catalyst applications during the three months ended March 31, 2025 compared to the prior year.

Equity in net income of affiliated companies for the six months ended June 30, 2025 was $10.8 million, an increase of $7.3 million compared to $3.5 million for the six months ended June 30, 2024.

The increase in earnings from the Zeolyst Joint Venture was driven by higher hydrocracking catalyst and specialty catalyst sales, partially offset by lower sales of catalysts used in emission control and customized catalyst applications during the six months ended June 30, 2025 compared to the prior year.

Interest Expense, Net

Interest expense, net for the three months ended March 31, 2025 was $11.0 million, a decrease of $2.4 million, as compared to $13.4 million for the three months ended March 31, 2024.

The decrease in interest expense, net was primarily due to the year over year decrease in variable rates in part due to the reduction in our spread associated with the 2025 Term Loan refinancing transactions and lower outstanding debt during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, partially offset by lower benefit from our interest rate caps.

Interest expense, net for the six months ended June 30, 2025 was $22.1 million, a decrease of $4.2 million, as compared to $26.3 million for the six months ended June 30, 2024.

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

Debt Modification and Extinguishment Costs

Debt modification and extinguishment costs for the three months ended March 31, 2025 were $1.0 million .

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

On January 30, 2025, we amended our existing senior secured term loan facility to reduce the applicable interest rates.

The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was a modification of debt.

As a result, we recorded $1.0 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of (loss) income during the three months ended March 31, 2025.

As a result, we recorded $1.0 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of income during the six months ended June 30, 2025.

On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031.

The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was primarily a modification of debt.

Other Expense, Net

Other expense, net was $0.2 million for the three months ended March 31, 2025 and 2024 .

(Benefit) Provision for Income Taxes

The benefit for income taxes for the three months ended March 31, 2025 was $0.6 million, compared to a $1.2 million provision for income taxes for the three months ended March 31, 2024.

The effective income tax rate for the three months ended March 31, 2025 was 13.3%, compared to 49.1% for the three months ended March 31, 2024.

The Company’s effective income tax rate for the three months ended March 31, 2025 and 2024, respectively, fluctuated primarily due to a reduced discrete tax impact relative to pre-tax book income, and a reduction to the discrete tax expense related to accrued penalties and interest on historical uncertain tax positions that expired due to statute of limitations in the prior year.

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

Provision For Income Taxes

The provision for income taxes for the six months ended June 30, 2025 was $1.5 million, compared to a $4.3 million provision for income taxes for the six months ended June 30, 2024.

The effective income tax rate for the six months ended June 30, 2025 was 38.8%, compared to 30.9% for the six months ended June 30, 2024.

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

The difference between the U.S.

federal statutory income tax rate and the Company’s effective income tax rate for the three months ended March 31, 2025 was mainly due to state and local taxes and a discrete shortfall tax expense related to stock compensation.

Net (Loss) Income

For the foregoing reasons, n et loss was $3.6 million for the three months ended March 31, 2025, compared to net income of $1.2 million for the three months ended March 31, 2024.

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

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

Adjusted EBITDA

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

Three months ended

March 31, Change

Six months ended

June 30, Change

2025 2024 $ %

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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 (loss) 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 $12.7 million for the three months ended March 31, 2025, which includes $8.9 million of equity in net income, excluding $0.6 million of amortization of investment in affiliate step-up plus $3.2 million of joint venture depreciation, amortization and interest.

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $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.

Adjusted EBITDA for the three months ended March 31, 2025 was $28.5 million, a decrease of $13.0 million, or 31.3%, compared to $41.5 million for the three mo nths ended March 31, 2024.

The decrease in Adjusted EBITDA was driven by approximately $8 million of higher manufacturing costs associated with planned maintenance turnaround costs, the timing of fixed cost absorption, and general inflation, approximately $3 million of lower volume driven by the maintenance turnaround activity at our facilities and our customers’ facilities, and approximately $2 million of unfavorable net pricing, reflecting the timing and contractual pass-through of certain costs, including energy and other indexed costs.

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

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

Adjusted EBITDA for the six months ended June 30, 2025 was $78.3 million, a decrease of $12.9 million, or 14.1%, compared to $91.2 million for the six months ended June 30, 2024.

The decrease in Adjusted EBITDA was driven by lower volumes in both regeneration services and virgin sulfuric acid, driven by unplanned and extended customer down-time and maintenance turnaround activity at our facilities and higher manufacturing costs driven by general inflation, maintenance and transportation, partially offset by favorable contractual pricing in regeneration services and strong pricing in virgin sulfuric acid.

Advanced Materials & Catalysts:

Adjusted EBITDA for the three months ended March 31, 2025 was $17.5 million, an increase of $6.4 million or 57.7%, compared to $11.1 million for the three mo nths ended March 31, 2024 .

Adjusted EBITDA for the six months ended June 30, 2025 was $31.2 million, an increase of $5.4 million or 20.9%, compared to $25.8 million for the six mo nths ended June 30, 2024 .

The increase in Adjusted EBITDA was primarily a result of higher sales volume within the Zeolyst Joint Venture driven by higher hydrocracking catalyst and specialty catalyst sales, partially offset by lower sales of catalysts used in emission control and customized catalyst applications.

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

Three months ended

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

Six months ended

(in millions)

Reconciliation of net (loss) income to Adjusted EBITDA

Net (loss) income $ (3.6) $ 1.2

(Benefit) provision for income taxes (0.6) 1.2

Reconciliation of net income to Adjusted EBITDA

Net income $ 2.4 $ 9.5

Provision for income taxes 1.5 4.3

Interest expense, net 22.1 26.3

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(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 (loss) income related to the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt, denominated in foreign currency.

(e) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S.

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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 (loss) income to Adjusted Net Income (1)(2)

Net (loss) income $ (4.2) $ (0.6) $ (3.6) $ 2.4 $ 1.2 $ 1.2

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

Net income $ 3.9 $ 1.5 $ 2.4 $ 13.8 $ 4.3 $ 9.5

Amortization of investment in affiliate step-up (b)

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Adjusted Net Income $ 19.1 $ 3.9 $ 15.2 $ 26.0 $ 6.8 $ 19.2

(1) We define Adjusted Net Income as net (loss) income adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net (loss) 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 (loss) income or Adjusted Net Income as defined by other companies.

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 (loss) income are shown net of applicable tax rates of 23.8% and 24.6% for the three months ended March 31, 2025 and 2024, respectively, except for equity-based compensation.

The adjustments to net income are shown net of applicable tax rates of 23.8% and 25.1% for the six months ended June 30, 2025 and 2024, respectively, except for equity-based compensation.

The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec.

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We may, from time to time, increase borrowings under our ABL Facility to meet our future cash needs.

As of March 31, 2025, we had cash and cash equivalents of $127.5 million and availability of $73.6 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $201.1 million.

We did not have any revolving credit facility borrowings as of March 31, 2025.

As of March 31, 2025, we were in compliance with all covenants under our debt agreements.

As of June 30, 2025, we had cash and cash equivalents of $69.6 million and availability of $82.9 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $152.5 million.

We did not have any revolving credit facility borrowings as of June 30, 2025.

As of June 30, 2025, we were in compliance with all covenants under our debt agreements.

Prior to April 10, 2025, our ABL Facility had one financial covenant with two ratios to maintain.

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revolving credit facility against a $7.5 million threshold.

As of March 31, 2025, we were in compliance with the financial covenant under the ABL Facility.

As of June 30, 2025, we were in compliance with the financial covenant under the ABL Facility.

On April 10, 2025, we amended the ABL Facility to, among other things, reallocate all European revolving loan commitments thereunder as U.S.

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During such time, the Company is required to maintain a fixed-charge coverage ratio of at least 1.0 to 1.0.

The Company was in compliance with all debt covenants under the 2025 Term Loan Facility and the ABL Facility as of March 31, 2025.

Included in our cash and cash equivalents balance as of March 31, 2025 was $6.4 million of cash and cash equivalents in foreign jurisdictions.

The Company was in compliance with all debt covenants under the 2025 Term Loan Facility and the ABL Facility as of June 30, 2025.

Included in our cash and cash equivalents balance as of June 30, 2025 was $9.4 million of cash and cash equivalents in foreign jurisdictions.

Depending on foreign cash balances, we have certain flexibility to repatriate funds should the need arise.

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

As reported, our cash interest paid for the three months ended March 31, 2025 and 2024 was approximately $12.3 million and $12.6 million, respectively.

As reported, our cash interest paid for the six months ended June 30, 2025 and 2024 was approximately $23.4 million and $33.2 million, respectively.

Before any impact of hedges, a one percent change in assumed interest rates for our variable interest credit facilities would have an annual impact of approximately $8.7 million on interest expense.

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Off-Balance Sheet Arrangements

The Company’s off-balance sheet arrangements include $3.3 million of outstanding letters of credit on our ABL Facility as of March 31, 2025.

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, 2025.

Six months ended

(in millions)

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Cash and cash equivalents at end of period $ 69.6 $ 83.3

Net cash provided by operating activities was $10.3 million for the three months ended March 31, 2025, compared to $36.5 million for the three months ended March 31, 2024.

Cash generated by operating activities, other than changes in working capital, was lower by $23.6 million during the three months ended March 31, 2025, as compared to the same period in the prior year primarily due to dividends received from the Zeolyst Joint Venture.

The decrease in cash from working capital during the three months ended March 31, 2025 of $2.6 million was unfavorable compared to the three months ended March 31, 2024 primarily due to unfavorable changes in receivables, accrued liabilities, prepaids and other current assets and accounts payable, partially offset by favorable changes in inventories.

Net cash provided by operating activities was $43.3 million for the six months ended June 30, 2025, compared to $46.4 million for the six months ended June 30, 2024.

Cash generated by operating activities, other than changes in working capital, was lower by $24.7 million during the six months ended June 30, 2025, as compared to the same period in the prior year primarily due to lower dividends received from the Zeolyst Joint Venture and lower earnings.

The increase in cash from working capital during the six months ended June 30, 2025 of $21.6 million was favorable compared to the six months ended June 30, 2024 primarily due to favorable changes in accrued liabilities, accounts payable and prepaids and other current assets, partially offset by unfavorable changes in receivables.

The favorable change in accrued liabilities mainly relates to the timing of payments for interest and other expenses.

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

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

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

The unfavorable change in accrued liabilities mainly relates to the timing of payments for taxes and non-trade payables from related parties.

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

The unfavorable 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 inventory was primarily due to the timing of sales orders and inventory build.

Net cash used in investing activities was $24.3 million for the three months ended March 31, 2025, compared to $17.4 million during the same period in 2024.

Net cash used in investing activities consisted of $24.3 million and $17.4 million to fund capital expenditures during the three months ended March 31, 2025 and 2024, respectively.

Net cash used in financing activities was $4.5 million for the three months ended March 31, 2025, compared to $4.2 million during the same period in 2024.

The unfavorable change in net cash used in financing activities was primarily driven by higher tax withholdings on equity award vesting during the during the three months ended March 31, 2025.

Net cash used in investing activities was $90.8 million for the six months ended June 30, 2025, compared to $36.8 million during the same period in 2024.

Net cash used in investing activities primarily consisted of $49.5 million and $36.6 million to fund capital expenditures during the six months ended June 30, 2025 and 2024, respectively.

During the six months ended June 30, 2025, we acquired the sulfuric acid production assets of Cornerstone Chemical Company LLC located at Waggaman, Louisiana for $41.3 million.

Net cash used in financing activities was $29.4 million for the six months ended June 30, 2025, compared to $14.4 million during the same period in 2024.

The unfavorable change in net cash used in financing activities was primarily driven by higher repurchases of the Company’s common stock during the during the six months ended June 30, 2025.

2025 December 31,

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Total long-term debt, excluding current portion $ 848.0 $ 852.1

As of March 31, 2025, our total debt was $868.6 million, excluding the original issue discount of $7.0 million and deferred financing costs of $2.7 million for our senior secured credit facilities.

Our net debt as of March 31, 2025 was $741.1 million, which reflects our total debt less cash and cash equivalents of $127.5 million.

As of June 30, 2025, our total debt was $866.5 million, excluding the original issue discount of $6.7 million and deferred financing costs of $3.1 million for our senior secured credit facilities.

Our net debt as of June 30, 2025 was $796.9 million, which reflects our total debt less cash and cash equivalents of $69.6 million.

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

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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)

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Capital expenditures remained at a level sufficient for required maintenance and certain expansion growth initiatives during these periods.

Maintenance capital expenditures were higher in the three months ended March 31, 2025, compared to the three months ended March 31, 2024 due to turnaround activities in the first quarter of 2025.

Growth capital expenditures were higher in the three months ended March 31, 2025, compared to the three months ended March 31, 2024 primarily due to the planned expansion of the Kansas City, Kansas silica catalyst production facility.

Maintenance capital expenditures were higher in the six months ended June 30, 2025, compared to the six months ended June 30, 2024 due to turnaround activities in 2025.

Growth capital expenditures were higher in the six months ended June 30, 2025, compared to the six months ended June 30, 2024 primarily due to the planned expansion of the Kansas City, Kansas silica catalyst production facility as well as infrastructure upgrades and capacity optimization at our West Orange, Texas facility.

Critical Accounting Policies and Estimates

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As of October 1, 2024, the date of the Company’s most recent quantitative assessments, the fair values of each of the Company’s reporting units and the fair values of the Company’s indefinite-lived trade names and trademarks exceeded their respective carrying values.

During the three months ended March 31, 2025, the Company did not identify any events or circumstances that would more likely than not reduce the fair value of the Company’s reporting units or intangible assets below their respective carrying values.

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

The estimated fair value of the Advanced Materials & Catalysts reporting unit exceeded its carrying value on October 1, 2024 by over 15%.

Prolonged unfavorable effects could adversely impact the estimated fair value of the Advanced Materials & Catalysts reporting unit in future periods and may result in impairment charges.

Prolonged unfavorable effects or results of the current strategic review could adversely impact the estimated fair value of the Advanced Materials & Catalysts reporting unit in future periods and may result in impairment charges.

Accounting Standards Not Yet Adopted

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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