Ecovyst Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Unless the context requires otherwise, references in this report to “Ecovyst,” “the Company,” “we,” “us” or “our” refer to Ecovyst Inc. and its consolidated subsidiaries. Forward-looking Statements This periodic report on Form 10-Q (“Form 10-Q”) includes “forward-looking statements” that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should” and similar expressions are intended to identify these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. Examples of forward-looking statements include, but are not limited to, statements we make regarding statements we make regarding the announced pending sale of our Advanced Materials & Catalysts business, demand trends, economic effects on our operations and financial results and our liquidity, potential strategic acquisitions or divestitures, potential increased borrowing under our credit facilities, and our belief that our current level of operations, cash and cash equivalents, cash flow from operations and borrowings under our credit facilities and other lines of credit will provide us adequate cash to fund working capital requirements, capital expenditure projects, debt service requirements and other requirements for our business for at least the next twelve months. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed herein may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include the following risks related to our business: • as a global business, we are exposed to local business risks in different countries; • are affected by general economic conditions and economic downturns; • exchange rate fluctuations could adversely affect our financial condition, results of operations and cash flows; • our international operations require us to comply with anti-corruption laws, trade and export controls and regulations of the U.S. government and various international jurisdictions in which we do business; • alternative technology or other changes in our customers’ products may reduce or eliminate the need for certain of our products; • our new product development and research and development efforts may not succeed and our competitors may develop more effective or successful products; • our substantial level of indebtedness could adversely affect our financial condition; • if we are unable to manage the current and future inflationary environment and to pass on increases in raw material prices, including natural gas, or labor costs to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected; • we face substantial competition in the industries in which we operate; • we are subject to the risk of loss resulting from non-payment or non-performance by our customers; • we rely on a limited number of customers for a meaningful portion of our business; • multi-year customer contracts are subject to potential early termination and such contracts may not be renewed at the end of their respective terms; • our quarterly results of operations are subject to fluctuations because demand for some of our products is seasonal; • our growth projects may result in significant expenditures before generating revenues, if any, which may materially and adversely affect our ability to implement our business strategy; • we may be liable to damages based on product liability claims brought against us or our customers for costs associated with recalls of our or our customers’ products; 33 Table of Contents • we are subject to extensive environmental, health and safety regulations and face various risks associated with potential non-compliance or releases of hazardous materials; • existing and proposed regulations to address climate change by limiting greenhouse gas emissions may cause us to incur significant additional operating and capital expenses and may impact our business and results of operations; • other governmental legislation and regulation, as well as adverse effects from the U.S. government shutdown; • production and distribution of our products could be disrupted for a variety of reasons, including as a result of supply chain constraints, and such disruptions could expose us to significant losses or liabilities; • the insurance that we maintain may not fully cover all potential exposures; • we could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications; • our failure to protect our intellectual property and infringement on the intellectual property rights of third parties; • disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations; • significant trade developments, including tariffs, have had and may continue to have an adverse effect on us; • the timing of, and ability to consummate, our announced sale of our Advanced Materials & Catalysts segment and the anticipated partial repayment under our 2025 Term Loan Facility; • that we have a material weakness in our internal control over financial reporting and that we may identify additional material weaknesses in the future; and • other factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report on Form 10-K”). The forward-looking statements included herein are made only as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations. Overview We are a leading provider of virgin sulfuric acid and sulfuric acid regeneration services. We believe that our Ecoservices business contributes to improving the sustainability of the environment. We are a leading provider of sulfuric acid recycling to the North American refining industry for the production of alkylate, an essential gasoline component for lowering vapor pressure and increasing octane to meet stringent gasoline specifications and fuel efficiency standards. We are also a leading North American producer of high quality and high strength virgin sulfuric acid for industrial and mining applications. We also provide chemical waste handling and treatment services, as well as ex-situ catalyst activation services for the refining and petrochemical industry. Recent Developments On September 10, 2025, we entered into a definitive agreement to sell our Advanced Materials & Catalysts business to Technip Energies N.V. for a purchase price of $556.0 million , subject to certain adjustments including for indebtedness, cash, working capital and transaction expenses. The transaction is expected to be completed in the first quarter of 2026, subject to regulatory approvals and customary closing conditions. The results of operations, financial condition, and cash flows for the Advanced Materials & Catalysts are presented herein as discontinued operations. Except where noted, any tables, percentages or metrics included within this filing exclude the results of our Advanced Materials & Catalysts business. Refer to Note 3 to our condensed consolidated financial statements for additional information. 34 Table of Contents Stock Repurchase Program On April 27, 2022, our Board of Directors (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 “Stock Repurchase Program”). On October 30, 2025, the Board amended the Stock Repurchase Program to remove the limitation that all repurchases must be made within the four-year period from the date of original approval. For the nine months ended September 30, 2025, the Company repurchased 3,536,364 shares on the open market at an average price of $7.74 per share, for a total of $27.4 million excluding brokerage commissions and accrued excise tax. As of September 30, 2025, $202.2 million was available for share repurchases under the program. For 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 $5.0 million excluding brokerage commissions and accrued excise tax. For possible future repurchases, the actual timing, number, and nature of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions and may be conducted through negotiated transactions, open market repurchases or other means, including through Rule 10b-18 and 10b5-1 trading plans or accelerated share repurchases. Key Performance Indicators Adjusted EBITDA, Adjusted Net Income and Net Debt Adjusted EBITDA, Adjusted Net Income and Net Debt are financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our competitors. Adjusted EBITDA, Adjusted Net Income, and Net Debt are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net income (loss) from continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, and (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. Adjusted Net Income consists of net income (loss) from continuing operations adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net income that we do not consider indicative of our ongoing operating performance. Net Debt consists of total debt less cash and cash equivalents. We believe that these non-GAAP financial measures provide investors with useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. You should not consider Adjusted EBITDA, Adjusted Net Income, or Net Debt in isolation or as alternatives to the presentation of our financial results in accordance with GAAP. The presentation of Adjusted EBITDA, Adjusted Net Income and Net Debt financial measures may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. In evaluating Adjusted EBITDA and Adjusted Net Income, you should be aware that we are likely to incur expenses similar to those eliminated in this presentation in the future and that certain of these items could be considered recurring in nature. Our presentation of Adjusted EBITDA and Adjusted Net Income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Reconciliations of Adjusted EBITDA, Adjusted Net Income to GAAP net income and Net Debt to GAAP total debt are included in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for each of the respective periods. Key Factors and Trends Affecting Operating Results and Financial Condition Sales Sales are made on both a purchase order basis and pursuant to long-term contracts. We continued to benefit from positive demand trends for our products and services in the majority of end uses we serve. Strong domestic and export demand for refined products continued to support high refinery utilization rates, while more stringent gasoline standards and growing demand for premium gasoline to power higher-compression and turbo-charged engines continued to drive demand for alkylate and for our regeneration services. In addition, demand for virgin sulfuric acid across a wide range of industrial applications remained favorable. Cost of Goods Sold Cost of goods sold consists of variable product costs, fixed manufacturing expenses, depreciation expense and freight expenses. Variable product costs include all raw materials and energy costs that are directly related to the manufacturing process. Fixed manufacturing expenses include all plant employment costs, manufacturing overhead and periodic maintenance costs. The primary raw materials for our Ecoservices segment include spent sulfuric acid, sulfur, acids, bases (including sodium hydroxide, or “caustic soda”) and certain metals. Spent sulfuric acid for our Ecoservices segment is supplied by customers as part of their contracts. 35 Table of Contents Most of our contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. About 90% of our sales for the year ended December 31, 2024 were under contracts featuring quarterly price adjustments. The price adjustments generally reflect actual costs for producing acid and tend to protect us from volatility in labor, fixed costs and raw material pricing. The take-or-pay volume protection allows us to cover fixed costs through intermittent, temporary production issues at customer refineries. While natural gas is not a direct feedstock for any product, natural gas powered machinery and equipment are used to heat raw materials and create the chemical reactions necessary to produce end-products. We maintain multiple suppliers wherever possible and structure our customer contracts when possible to allow for the pass-through of raw material, labor and natural gas costs. Seasonality Our regeneration services product group typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations generally result in higher sales and working capital requirements in the second and third quarters. Results of Operations Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024 Highlights The following is a summary of our financial performance for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Sales • Sales increased $51.0 million to $204.9 million. The increase in sales primarily reflects higher average selling prices from the pass-through effect of higher sulfur costs, favorable contractual pricing for regeneration services, increased volume of virgin sulfuric acid, as well as sales associated with the acquired Waggaman, Louisiana location, partially offset by lower regeneration services volume. Gross Profit • Gro ss profit increased $7.0 million to $52.1 million. The increase in gross profit was primarily due to higher average selling pricing and higher sales volume, partially offset by higher manufacturing costs. Operating Income • Operating income increased by $0.8 million to $28.3 million. The increase in operating income reflects higher gross profit offset by higher other operating expense, net. 36 Table of Contents The following is our unaudited condensed consolidated statements of (loss) income and a summary of financial results for the three months ended September 30, 2025 and 2024: Three months ended September 30, Change 2025 2024 $ % (in millions, except percentages) Sales $ 204.9 $ 153.9 $ 51.0 33.1 % Cost of goods sold 152.8 108.8 44.0 40.4 % Gross profit 52.1 45.1 7.0 15.5 % Gross profit margin 25.4 % 29.3 % Selling, general and administrative expenses 15.7 15.2 0.5 3.3 % Other operating expense, net 8.1 2.4 5.7 237.5 % Operating income 28.3 27.5 0.8 2.9 % Operating income margin 13.8 % 17.9 % Interest expense, net 8.4 7.9 0.5 6.3 % Other (income) expense, net (0.7) 0.2 (0.9) (450.0) % Income before income taxes 20.6 19.4 1.2 6.2 % Provision for income taxes 20.2 4.6 15.6 339.1 % Effective tax rate 98.2 % 23.7 % Net income from continuing operations 0.4 14.8 (14.4) (97.3) % Net loss from discontinued operations, net of tax (79.7) (0.5) (79.2) 15,840.0 % Net (loss) income $ (79.3) $ 14.3 $ (93.6) (654.5) % Sales Sales for the three months ended September 30, 2025 were $204.9 million, an increase of $51.0 million, or 33.1%, compared to sales of $153.9 million for the three months ended September 30, 2024. The increase in sales was due to higher average selling prices of $34.3 million and higher overall sales volume of $16.7 million. The increase in average selling prices primarily reflect the pass-through effect of higher sulfur costs and favorable contractual pricing for regeneration services. The impact associated with the pass-through of high sulfur costs was approximately $25 million for the three months ended September 30, 2025. The increase in sales volume was primarily related to the contribution of sales volume from the Waggaman location and higher virgin sulfuric acid sales, partially offset by lower regeneration services due to unplanned and extended customer downtime. Gross Profit Gross profit for the three months ended September 30, 2025 was $52.1 million, an increase of $7.0 million, or 15.5%, compared to $45.1 million for the three months ended September 30, 2024. The increase in gross profit was primarily due to higher average selling prices of $9.3 million, exclusive of the approximately $25 million pass-through of the higher sulfur costs, driven by contractual improvements and higher sales volume of $5.8 million, partially offset by higher manufacturing costs of $8.2 million, exclusive of the 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 additional fixed costs from the Waggaman location, general inflation and transportation. Selling, General and Administrative Expenses Selling, general and administrative expenses were $15.7 million for the three months ended September 30, 2025, an increase of $0.5 million, as compared to $15.2 million for three months ended September 30, 2024 . Other Operating Expense, Net Other operating ex pense, net for the three months ended September 30, 2025 was $8.1 million, an increase of $5.7 million, compared to $2.4 million for the three months ended September 30, 2024. The increase in other operating expense, net was primarily due to an increase in loss on disposal of assets of $3.4 million, transaction and integration costs associated with the Waggaman location of $1.3 million, and other costs of $1.0 million, primarily related to restructuring and tax charges. 37 Table of Contents Interest Expense, Net Interest expense, net for the three month s ended September 30, 2025 was $8.4 million, an increase of $0.5 million, as compared to $7.9 million for the three months ended September 30, 2024 . The increase in interest expense, net was due to lower benefit from our interest rate caps offset by lower interest expense driven by 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 September 30, 2025, as compared to the three months ended September 30, 2024. Other (Income) Expense, Net Other income, net for the three months ended September 30, 2025 was $0.7 million, a change of $0.9 million, as compared to $0.2 million of other expense for the three months ended September 30, 2024. Provision For Income Taxes The provision for income taxes for the three months ended September 30, 2025 was $20.2 million, compared to $4.6 million for the three months ended September 30, 2024. The effective income tax rate for the three months ended September 30, 2025 was 98.2%, compared to 23.7% for the three months ended September 30, 2024. The Company’s quarter over quarter effective income tax rate has fluctuated primarily due to an increased discrete tax impact relative to pre-tax book income. The discrete tax items relate to a stock compensation shortfall, intraperiod allocation revaluation of deferred tax assets and liabilities including valuation allowances as a result of the Advanced Materials & Catalysts divestiture, 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. The total tax expense for the three months ended September 30, 2025 includes a $15.6 million discrete tax expense connected to intraperiod allocation associated with the revaluation of deferred tax assets and liabilities, a valuation allowance against the Company’s Kansas Investment Tax Credits, and an increase in valuation allowance against a portion of the Company’s state net operating losses. In accordance with intraperiod allocation rules, this discrete tax expense is reflected in the tax provision for continuing operations. The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the three months ended September 30, 2025 was mainly due to state and local taxes, shortfall tax expense related to stock compensation, tax benefit related to state tax refunds associated with prior tax years, discrete tax expense related to intraperiod allocation associated with the revaluation of deferred tax assets and liabilities, a valuation allowance against the Company’s Kansas Investment Tax Credits, and a valuation allowance against a portion of the Company’s state net operating losses. Net Income From Continuing Operations For the foregoing reasons, net income from continuing operations was $0.4 million for the three months ended September 30, 2025, compared to $14.8 million for the three months ended September 30, 2024. Adjusted EBITDA Summarized Adjusted EBITDA information is shown below in the following table: Three months ended September 30, Change 2025 2024 $ % (in millions, except percentages) Adjusted EBITDA: (1) Ecoservices $ 63.6 $ 55.1 $ 8.5 15.4 % Unallocated corporate expenses (6.1) (6.4) 0.3 4.7 % Total $ 57.5 $ 48.7 $ 8.8 18.1 % (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 from continuing operations 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. 38 Table of Contents Ecoservices: Adjusted EBITDA for the three months ended September 30, 2025 was $63.6 million, an increase of $8.5 million, or 15.4%, compared to $55.1 million for the three months ended September 30, 2024. The increase in Adjusted EBITDA was a result of favorable contractual pricing for regeneration services and higher sales volume of virgin sulfuric acid, partially offset by lower regeneration services volume, due to unplanned and extended customer down time, and higher manufacturing costs driven by general inflation and transportation. A reconciliation of net income from continuing operations to Adjusted EBITDA is as follows: Three months ended September 30, 2025 2024 (in millions) Reconciliation of net income from continuing operations to Adjusted EBITDA Net income from continuing operations $ 0.4 $ 14.8 Provision for income taxes 20.2 4.6 Interest expense, net 8.4 7.9 Depreciation and amortization 20.7 18.5 EBITDA 49.7 45.8 Net loss on asset disposals (a) 3.6 0.2 Transaction and other related costs (b) 0.6 — Equity-based compensation 2.3 2.3 Restructuring, integration and business optimization expenses (c) 1.8 0.1 Other (d) (0.5) 0.3 Adjusted EBITDA $ 57.5 $ 48.7 (a) 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. (b) 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. (c) Includes the impact of restructuring, integration and business optimization expenses, which are incremental costs that are not representative of our ongoing business operations. (d) 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. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions). 39 Table of Contents Adjusted Net Income Summarized Adjusted Net Income information is shown below in the following table: Three months ended September 30, 2025 2024 Pre-tax amount Tax expense (benefit) After-tax amount Pre-tax amount Tax expense (benefit) After-tax amount (in millions) Reconciliation of net income from continuing operations to Adjusted Net Income (1)(2) Net income from continuing operations $ 20.6 $ 20.2 $ 0.4 $ 19.4 $ 4.6 $ 14.8 Net loss on asset disposals (a) 3.6 0.9 2.7 0.2 0.1 0.1 Transaction and other related costs (b) 0.6 0.2 0.4 — — — Equity-based compensation 2.3 0.6 1.7 2.3 0.6 1.7 Restructuring, integration and business optimization expenses (c) 1.8 0.5 1.3 0.1 — 0.1 Other (d) (0.3) (0.1) (0.2) — — — Adjusted Net Income, including intraperiod allocation 28.6 22.3 6.3 22.0 5.3 16.7 Intraperiod allocation for restating discontinued operations (3) — (15.6) 15.6 — — — Adjusted Net Income $ 28.6 $ 6.7 $ 21.9 $ 22.0 $ 5.3 $ 16.7 (1) We define Adjusted Net Income as net income from continuing operations adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income from continuing operations 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 from continuing operations 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. (3) Due to reporting the Advanced Materials & Catalysts business as held for sale in discontinued operations, the estimated tax rate used to value deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) needs to be adjusted to remove the Advanced Materials & Catalysts rate. Additionally, the Company reassessed the realizability of its state deferred tax assets, including Kansas Investment Tax Credits and state Net Operating Losses. Due to changes in the Company’s state apportionment profile resulting from the Advanced Materials & Catalysts, it was determined that a portion of these deferred tax assets are no longer expected to be realized. Accordingly, the Company recorded a valuation allowance during the quarter to reflect the reduced expected benefit of these state tax attributes. Given these are a direct result of the sale of discontinued operations and the need to adjust the estimated tax rate and valuation allowances arose because of discontinued operations, the impacts are reflected in continuing operations. Due to these revaluations being solely as a result of the Advanced Materials & Catalysts divestiture and a non-cash item, it is treated as an addback. The adjustments to net income from continuing operations 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 September 30, 2025 and September 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 Section 162(m) of the Internal Revenue Code of 1986 (as amended) and adjusting for the tax effect of the equity-based stock compensation net windfall or shortfall which is recorded as a discrete item. 40 Table of Contents Results of Operations Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024 Highlights The following is a summary of our financial performance for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Sales • Sales increased $74.7 million to $524.1 million. The increase in sales primarily reflects higher average selling prices from the pass-through effect of higher sulfur costs, favorable contractual pricing for regeneration services and sales associated with the acquired Waggaman, Louisiana location, partially offset by lower regeneration services volume. Gross Profit • Gross profit decreased $9.0 million to $111.4 million. The decrease in gross profit was primarily due to lower regeneration services volume and higher manufacturing costs, partially offset by higher average selling prices. Operating Income • Operating income decreased by $19.6 million t o $43.1 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. The following is our unaudited condensed consolidated statements of (loss) income and a summary of financial results for the nine months ended September 30, 2025 and 2024: Nine months ended September 30, Change 2025 2024 $ % (in millions, except percentages) Sales $ 524.1 $ 449.4 $ 74.7 16.6 % Cost of goods sold 412.7 329.0 83.7 25.4 % Gross profit 111.4 120.4 (9.0) (7.5) % Gross profit margin 21.2 % 26.8 % Selling, general and administrative expenses 49.8 49.8 — — % Other operating expense, net 18.5 7.9 10.6 134.2 % Operating income 43.1 62.7 (19.6) (31.3) % Operating income margin 8.2 % 13.9 % Interest expense, net 24.8 27.1 (2.3) (8.5) % Debt modification and extinguishment costs 1.0 4.6 (3.6) (78.3) % Other (income) expense, net (0.3) 0.6 (0.9) (150.0) % Income before income taxes 17.6 30.4 (12.8) (42.1) % Provision for income taxes 20.0 8.0 12.0 150.0 % Effective tax rate 113.4 % 26.4 % Net (loss) income from continuing operations (2.4) 22.4 (24.8) (110.7) % Net (loss) income from discontinued operations, net of tax (74.5) 1.4 (75.9) (5,421.4) % Net (loss) income $ (76.9) $ 23.8 $ (100.7) (423.1) % 41 Table of Contents Sales Sales for the nine months ended September 30, 2025 were $524.1 million, an increase of $74.7 million, or 16.6%, compared to sales of $449.4 million for the nine months ended September 30, 2024. The increase in sales reflects higher average selling prices of $65.6 million, including the pass-through effect of higher sulfur costs of approximately $49 million, and higher sales volume of $9.1 million. Average selling prices were higher primarily due to the pass-through effect of higher sulfur costs, favorable contract pricing for regeneration services. Sales volume increase was a result of the contribution of sales volume from the Waggaman location, partially offset by lower regeneration services driven by unplanned and extended customer down-time and maintenance turnaround activity at our facilities. Gross Profit Gross profit for the nine months ended September 30, 2025 was $111.4 million, a decrease of $9.0 million, or 7.5%, compared to $120.4 million for the nine months ended September 30, 2024. The decrease in gross profit was primarily driven by higher manufacturing costs of $23.9 million, exclusive of the approximately $49 million of higher sulfur costs, and lower sales volume of $1.8 million, partially offset by higher average selling prices of $16.6 million, exclusive of the pass-through of 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 additional fixed costs from the Waggaman location, general inflation, maintenance and transportation. Selling, General and Administrative Expenses Selling, general and administrative expenses for the nine months ended September 30, 2025 and 2024 were $49.8 million. Other Operating Expense, Net Other operating expense, net for the nine months e nded September 30, 2025 was $18.5 million, an increase of $10.6 million, compared to $7.9 million for the nine months ended September 30, 2024. The increase in other operating expense, net was mainly driven by an increase in loss on disposal of assets of $3.2 million, transaction and integration costs associated with the Waggaman location of $4.1 million, and other costs of $3.3 million primarily related to restructuring and tax charges. Interest Expense, Net Interest expense, net for the nine months ended September 30, 2025 was $24.8 million, a decrease of $2.3 million, as compared to $27.1 million for the nine months ended September 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 nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, partially offset by lower benefit from our interest rate caps. Debt Modification and Extinguishment Costs Debt modification and extinguishment costs for the nine months ended September 30, 2025 were $1.0 million, a decrease of $3.6 million, as compared to $4.6 million for the nine months ended September 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 nine months ended September 30, 2025. On June 12, 2024, we amended our existing senior secured term loan facility to reduce the applicable interest rates and extend the maturity of the facility to June 2031. The Company evaluated the terms of the amendment in accordance with ASC 470-50 Debt - Modification and Extinguishment and determined that the amendment was primarily a modification of debt. As a result, we recorded $4.5 million of third-party financing fees within debt modification and extinguishment costs in the condensed consolidated statements of (loss) income during the nine months ended September 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 nine months ended September 30, 2024. 42 Table of Contents Other (Income) Expense, Net Other income, net for the nine months ended September 30, 2025 was $0.3 million, a change of $0.9 million, as compared to $0.6 million of other expense for the nine months ended September 30, 2024 . Provision For Income Taxes The provision for income taxes for the nine months ended September 30, 2025 was $20.0 million, compared to $8.0 million for the nine months ended September 30, 2024. The effective income tax rate for the nine months ended September 30, 2025 was 113.4%, compared to 26.4% for the nine months ended September 30, 2024. The Company’s effective income tax rate for the nine months ended September 30, 2025 and 2024, respectively, fluctuated primarily due to an increased discrete tax impact relative to pre-tax book income. The discrete tax items relate to a stock compensation shortfall, intraperiod allocation revaluation of deferred tax assets and liabilities including valuation allowances as a result of the Advanced Materials & Catalysts divestiture, 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. The total tax expense for the nine months ended September 30, 2025 includes a $15.6 million discrete tax expense connected to intraperiod allocation associated with the revaluation of deferred tax assets and liabilities, a valuation allowance against the Company’s Kansas Investment Tax Credits, and an increase in valuation allowance against a portion of the Company’s state net operating losses. In accordance with intraperiod allocation rules, this discrete tax expense is reflected in the tax provision for continuing operations. The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2025 was mainly due to state and local taxes, shortfall tax expense related to stock compensation, tax benefit related to state tax refunds associated with prior tax years, discrete tax expense related to intraperiod allocation associated with the revaluation of deferred tax assets and liabilities, a valuation allowance against the Company’s Kansas Investment Tax Credits, and a valuation allowance against a portion of the Company’s state net operating losses. Net (Loss) Income From Continuing Operations For the foregoing reasons, net loss from continuing operations was $2.4 million for the nine months ended September 30, 2025, compared to net income from continuing operations of $22.4 million for the nine months ended September 30, 2024. 43 Table of Contents Adjusted EBITDA Summarized Adjusted EBITDA information is shown below in the following table: Nine months ended September 30, Change 2025 2024 $ % (in millions, except percentages) Adjusted EBITDA (1) Ecoservices $ 141.9 $ 146.3 $ (4.4) (3.0) % Unallocated corporate expenses (21.2) (21.4) 0.2 0.9 % Total $ 120.7 $ 124.9 $ (4.2) (3.4) % (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 (loss) income from continuing operations 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. Ecoservices: Adjusted EBITDA for the nine months ended September 30, 2025 was $141.9 million, a decrease of $4.4 million, or 3.0%, compared to $146.3 million for the nine months ended September 30, 2024. The decrease in Adjusted EBITDA was driven by lower volumes in regeneration services 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. A reconciliation of net (loss) income from continuing operations to Adjusted EBITDA is as follows: Nine months ended September 30, 2025 2024 (in millions) Reconciliation of net (loss) income from continuing operations to Adjusted EBITDA Net (loss) income from continuing operations $ (2.4) $ 22.4 Provision for income taxes 20.0 8.0 Interest expense, net 24.8 27.1 Depreciation and amortization 58.0 52.5 EBITDA 100.4 110.0 Debt modification and extinguishment costs 1.0 4.6 Net loss on asset disposals (a) 4.0 0.8 Transaction and other related costs (b) 2.8 0.2 Equity-based compensation 7.6 8.3 Restructuring, integration and business optimization expenses (c) 2.9 0.2 Other (d) 2.0 0.8 Adjusted EBITDA $ 120.7 $ 124.9 (a) 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. (b) 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. (c) Includes the impact of restructuring, integration and business optimization expenses, which are incremental costs that are not representative of our ongoing business operations. (d) 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. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions). 44 Table of Contents Adjusted Net Income Summarized Adjusted Net Income information is shown below in the following table: Nine months ended September 30, 2025 2024 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 from continuing operations to Adjusted Net Income (1)(2) Net (loss) income from continuing operations $ 17.6 $ 20.0 $ (2.4) $ 30.4 $ 8.0 $ 22.4 Debt modification and extinguishment costs 1.0 0.2 0.8 4.6 1.1 3.5 Net loss on asset disposals (a) 4.0 1.0 3.0 0.8 0.2 0.6 Transaction and other related costs (b) 2.8 0.7 2.1 0.2 0.1 0.1 Equity-based compensation 7.6 0.9 6.7 8.3 1.6 6.7 Restructuring, integration and business optimization expenses (c) 2.9 0.8 2.1 0.2 0.1 0.1 Other (d) 1.9 0.5 1.4 0.3 0.2 0.1 Adjusted Net Income, including intraperiod allocation 37.8 24.1 13.7 44.8 11.3 33.5 Intraperiod allocation for restating discontinued operations (3) — (15.6) 15.6 — — — Adjusted Net Income $ 37.8 $ 8.5 $ 29.3 $ 44.8 $ 11.3 $ 33.5 (1) We define Adjusted Net Income as net (loss) income from continuing operations adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net (loss) income from continuing operations 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 from continuing operations 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. (3) Due to reporting the Advanced Materials & Catalysts business as held for sale in discontinued operations, the estimated tax rate used to value DTAs and DTLs needs to be adjusted to remove the Advanced Materials & Catalysts rate. Additionally, the Company reassessed the realizability of its state deferred tax assets, including Kansas Investment Tax Credits and state Net Operating Losses. Due to changes in the Company’s state apportionment profile resulting from the Advanced Materials & Catalysts, it was determined that a portion of these deferred tax assets are no longer expected to be realized. Accordingly, the Company recorded a valuation allowance during the quarter to reflect the reduced expected benefit of these state tax attributes. Given these are a direct result of the sale of discontinued operations and the need to adjust the estimated tax rate and valuation allowances arose because of discontinued operations, the impacts are reflected in continuing operations. Due to these revaluations being solely as a result of the Advanced Materials & Catalysts divestiture and a non-cash item, it is treated as an addback. The adjustments to net (loss) income from continuing operations are shown net of applicable tax rates of 25.6% and 25.1% for the nine months ended September 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 Section 162(m) of the Internal Revenue Code of 1986 (as amended) and adjusting for the tax effect of the equity-based stock compensation net windfall or shortfall which is recorded as a discrete item 45 Table of Contents Financial Condition, Liquidity and Capital Resources Our primary sources of liquidity consist of cash flows from operations, existing cash balances as well as funds available under our asset based lending revolving credit facility (“ABL Facility”). We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources of funds. Our primary liquidity requirements include funding working capital requirements (primarily inventory and accounts receivable, net of accounts payable and other accrued liabilities), debt service requirements and capital expenditures. Our capital expenditures include both maintenance of business, which include spending on maintenance and health, safety and environmental initiatives as well as growth, which includes spending to drive organic sales growth and cost savings initiatives. We believe that our existing cash and cash equivalents and cash flows from operations, combined with availability under our ABL Facility, will be sufficient to meet our presently anticipated future cash needs for at least the next twelve months. We may also pursue strategic acquisition or divestiture opportunities, which may impact our future cash requirements. We may, from time to time, increase borrowings under our ABL Facility to meet our future cash needs. As of September 30, 2025, we had cash and cash equivalents of $99.1 million, including $82.0 million cash and cash equivalents from continuing operations and $17.1 million of cash and cash equivalents from discontinued operations, and availability of $85.6 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $184.7 million. We did not have any revolving credit facility borrowings as of September 30, 2025. As of September 30, 2025, we were in compliance with all covenants under our debt agreements. Prior to April 10, 2025, our ABL Facility had one financial covenant with two ratios to maintain. The first ratio compared the total ABL availability against a threshold: the greater of 10% of the line cap (which was defined as the lesser of our revolving loan commitments and the value of our assets) or $10.0 million. The greater of this threshold could not be greater than the total availability of the ABL Facility. The second ratio compared the ABL Facility availability of the U.S. revolving credit facility against a $7.5 million threshold. As of September 30, 2025, we were in compliance with the financial covenant under the ABL Facility. On April 10, 2025, we amended the ABL Facility to, among other things, reallocate all European revolving loan commitments thereunder as U.S. revolving loan commitments. As a result of the amendment, on and after April 10, 2025, the U.S. revolving credit facility comprises all availability of the ABL Facility, and we are only required to comply with the first ratio described above. The 2025 Term Loan Facility and the ABL Facility contain various restrictive covenants. Each limits the ability of the Company and its restricted subsidiaries to incur certain indebtedness or liens, merge, consolidate or liquidate, dispose of certain property, make investments or declare or pay dividends, make optional payments, modify certain debt instruments, enter into certain transactions with affiliates, enter into certain sales and leasebacks and certain other non-financial restrictive covenants. During such time, the Company is required to maintain a fixed-charge coverage ratio of at least 1.0 to 1.0. The Company was in compliance with all debt covenants under the 2025 Term Loan Facility and the ABL Facility as of September 30, 2025. Upon the close of the sale of the Advanced Materials & Catalysts business and finalization of net cash proceeds, the Company will be required to provide partial repayment under its 2025 Term Loan Facility. We have no cash and cash equivalents held in foreign jurisdictions on a continuing operations basis. Our liquidity requirements include interest payments related to our debt structure. As reported, our cash interest paid for the nine months ended September 30, 2025 and 2024 was approximately $34.6 million and $37.0 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 $8.6 million on interest expense. We hedge the interest rate fluctuations on debt obligations through interest rate cap agreements. For more information about our interest rate cap agreements, refer to Note 12 — Financial Instruments of our condensed consolidated financials statements included in Part 1, Item 1 — Financial Statements (Unaudited). Off-Balance Sheet Arrangements The Company’s off-balance sheet arrangements include $3.3 million of outstanding letters of credit on our ABL Facility as of September 30, 2025. 46 Table of Contents Cash Flow Nine months ended September 30, 2025 2024 (in millions) Continuing Operations Net cash provided by (used in): Operating activities $ 77.5 $ 66.0 Investing activities (92.9) (43.0) Financing activities (35.1) (12.7) Discontinued Operations Net cash provided by (used in): Operating activities 21.0 40.4 Investing activities (15.5) (13.2) Financing activities (2.4) (2.4) Effect of exchange rate changes on cash and cash equivalents 0.5 — Net change in cash and cash equivalents (46.9) 35.1 Cash and cash equivalents at beginning of period 146.0 88.4 Cash and cash equivalents at end of period 99.1 123.5 Less: cash, cash equivalents, and restricted cash of discontinued operations (17.1) (23.3) Cash, cash equivalents and restricted cash at end of period of continuing operations $ 82.0 $ 100.2 The following discussions related to our cash flows are presented on a continuing operations basis, which excludes the cash flows from our Advanced Materials & Catalysts businesses accounted for as discontinued operations. Net cash provided by operating activities was $77.5 million for the nine months ended September 30, 2025, compared to $66.0 million for the nine months ended September 30, 2024. Cash generated by operating activities, other than changes in working capital, was higher by $5.9 million during the nine months ended September 30, 2025, as compared to the same period in the prior year primarily due higher earnings exclusive of non-cash expenses. The increase in cash from working capital during the nine months ended September 30, 2025 of $5.6 million was favorable compared to the nine months ended September 30, 2024 primarily due to favorable changes in accounts payable and accrued liabilities, partially offset by unfavorable changes in receivables. The favorable change in accounts payable was due to the timing of vendor payments. The favorable change in accrued liabilities mainly relates to the timing of payments for interest and other expenses. The unfavorable change in receivables was driven by the timing of collection of sales. Net cash used in investing activities was $92.9 million for the nine months ended September 30, 2025, compared to $43.0 million during the same period in 2024. Net cash used in investing activities primarily consisted of $51.6 million and $43.0 million to fund capital expenditures during the nine months ended September 30, 2025 and 2024, respectively. During the nine months ended September 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 $35.1 million for the nine months ended September 30, 2025, compared to $12.7 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 nine months ended September 30, 2025. 47 Table of Contents Debt September 30, 2025 December 31, 2024 (in millions) 2025 Term Loan Facility $ 864.3 $ 870.8 ABL Facility — — Total debt 864.3 870.8 Original issue discount (6.5) (7.2) Deferred financing costs (3.0) (2.8) Total debt, net of original issue discount and deferred financing costs 854.8 860.8 Less: current portion (8.7) (8.7) Total long-term debt, excluding current portion $ 846.1 $ 852.1 As of September 30, 2025, our total debt was $864.3 million, excluding the original issue discount of $6.5 million and deferred financing costs of $3.0 million for our senior secured credit facilities. Our net debt as of September 30, 2025 was $782.3 million, which reflects our total debt less cash and cash equivalents of $82.0 million. We may seek, subject to market conditions and other factors, opportunities to repurchase, refinance or otherwise reprice our debt. Capital Expenditures Maintenance capital expenditures include spending on maintenance of business, health, safety and environmental initiatives. Growth capital expenditures include spending to drive organic sales growth and cost savings initiatives. These capital expenditures represent our “book” capital expenditures for which the Company has recorded, but not necessarily paid for the capital expenditures. Nine months ended September 30, 2025 2024 (in millions) Maintenance capital expenditures $ 44.6 $ 37.7 Growth capital expenditures 5.1 4.8 Total capital expenditures $ 49.7 $ 42.5 Capital expenditures remained at a level sufficient for required maintenance and certain expansion growth initiatives during these periods. Maintenance capital expenditures were higher in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 due to turnaround activities in 2025. Critical Accounting Policies and Estimates We prepare our condensed consolidated financial statements in conformity with GAAP and our significant accounting policies are described in Note 2 to our audited consolidated financial statements included in our Annual Report on Form 10-K. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. We base our estimates and judgments on historical experience and other relevant factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. While there has been no material change in our critical accounting policies and use of estimates from those described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K, we continually evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis. The Company completes its annual goodwill and indefinite-lived intangible assets impairment test during the fourth quarter of each year, or more frequently if triggering events indicate a possible impairment. The Company determines the fair value of its reporting units using both a market approach and an income, or discounted cash flow, approach. As of October 1, 2024, the date of the Company’s most recent quantitative assessments, the fair values of each of the Company’s reporting unit and the fair values of the Company’s indefinite-lived trade names and trademarks exceeded their respective carrying values. During the nine months ended September 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. 48 Table of Contents Accounting Standards Not Yet Adopted See Note 2 to our unaudited condensed consolidated financial statements for a discussion of recently issued accounting standards and their effect on us. 49 Table of Contents