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 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: • we are exposed to general business risks; • we are affected by general economic conditions and economic downturns; • our operations require us to comply with regulations of the U.S. government as well as the state and local governments where we operate; • alternative technology may reduce or eliminate the need for certain of our 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; 26 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; • 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, could have an adverse effect on us or our customers; 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, 2025 (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 regenerated sulfuric acid products and 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. On December 31, 2025, the Company completed the sale of its Advanced Materials & Catalysts business . 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. 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 three months ended March 31, 2026, the Company repurchased 3,226,461 shares on the open market at an average price of $11.07 per share, for a total of $35.7 million excluding brokerage commissions and accrued excise tax. As of March 31, 2026, $146.5 million was available for share repurchases under the program. The Company did not repurchase any of its common stock pursuant to the stock repurchase program during the three months ended March 31, 2025. 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 27 Table of Contents 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 (loss) from continuing operations 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 (loss) from continuing operations 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 (loss) from continuing operations 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 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 product group. In addition, demand for virgin sulfuric acid across a wide range of industrial applications, including mining, 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 include spent sulfuric acid, sulfur, acids, bases (including sodium hydroxide, or “caustic soda”) and certain metals. Spent sulfuric acid for our regeneration services product group is supplied by customers as part of their contracts. 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, 2025 were under contracts featuring quarterly price adjustments. The price adjustments generally reflect actual costs for producing sulfuric 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 as well as fluctuations associated with customer turnarounds . These demand fluctuations generally result in higher sales and working capital requirements in the second and third quarters. 28 Table of Contents Results of Operations Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025 Highlights The following is a summary of our financial performance for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Sales • Sales increased $71.9 million to $215.0 million. The increase in sales primarily re flects higher average selling prices from the pass-through effect of higher sulfur costs, favorable contractual pricing for regenerated sulfuric acid and higher sales volume of virgin and regenerated sulfuric acid, including the contribution from the acquired Waggaman, Louisiana location. Gross Profit • Gross profit increased $17.3 million to $36.4 million. The increase in gross profit was primarily due to higher sales volume and higher average selling prices, partially offset by higher manufacturing costs. Operating Income (Loss) • Operating income (loss) increased by $13.5 million t o $12.5 million . The increase in operating income (loss) was due to a increase in gross profit, partially offset by higher selling, general and administrative expenses. The following is our unaudited condensed consolidated statements of income (loss) and a summary of financial results for the three months ended March 31, 2026 and 2025: Three months ended March 31, Change 2026 2025 $ % (in millions, except percentages) Sales $ 215.0 $ 143.1 $ 71.9 50.2 % Cost of goods sold 178.6 124.0 54.6 44.0 % Gross profit 36.4 19.1 17.3 90.6 % Gross profit margin 16.9 % 13.3 % Selling, general and administrative expenses 19.1 16.5 2.6 15.8 % Other operating expense, net 4.8 3.6 1.2 33.3 % Operating income (loss) 12.5 (1.0) 13.5 1,350.0 % Operating income (loss) margin 5.8 % (0.7) % Interest expense, net 3.2 8.3 (5.1) (61.4) % Debt modification and extinguishment costs — 1.0 (1.0) (100.0) % Other expense, net — 0.1 (0.1) (100.0) % Income (loss) before income taxes 9.3 (10.4) 19.7 189.4 % Provision (benefit) for income taxes 3.6 (2.3) 5.9 (256.5) % Effective tax rate 38.4 % 21.6 % Net income (loss) from continuing operations 5.7 (8.1) 13.8 170.4 % Net (loss) income from discontinued operations, net of tax (1.4) 4.5 (5.9) (131.1) % Net income (loss) $ 4.3 $ (3.6) $ 7.9 219.4 % 29 Table of Contents Sales Sales for the three months ended March 31, 2026 were $215.0 million, an increase of $71.9 million, or 50.2%, compared to sales of $143.1 million for the three months ended March 31, 2025. The increase in sales reflects higher average selling prices of $39.7 million, including the pass-through effect of higher sulfur costs of approximately $33 million, and higher sales volume of $32.2 million. Average selling prices were higher primarily due to the pass-through effect of higher sulfur costs, higher virgin sulfuric acid pricing and favorable contract pricing for regenerated sulfuric acid. Sales volume increase was a result of the contribution of sales volume from the Waggaman, Louisiana location, higher virgin sulfuric acid demand and higher regeneration services driven by less customer down-time compared to the prior year. Gross Profit Gross profit for the three months ended March 31, 2026 was $36.4 million, an increase of $17.3 million, or 90.6%, compared to $19.1 million for the three months ended March 31, 2025. The increase in gross profit was primarily driven by higher sales volume of $14.6 million and higher average selling prices of $6.7 million, exclusive of the approximately $33 million of higher sulfur costs, partially offset by higher manufacturing costs of $4.0 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, Louisiana location, higher total turnaround costs of approximately $2 million, general inflation and higher transportation costs. Selling, General and Administrative Expenses Selling, general and administrative expenses for the three months ended March 31, 2026 were $19.1 million, an increase of $2.6 million, compared to $16.5 million for the three months ended March 31, 2025 . The increase in selling, general and administrative expenses was mainly driven by an increase in stock compensation of $0.9 million, other compensation-related expenses of $1.2 million and other expenses of $0.5 million. Other Operating Expense, Net Other operating expense, net for the three months e nded March 31, 2026 was $4.8 million , an increase of $1.2 million , compared to $3.6 million for the three months ended March 31, 2025. The increase in other operating expense, net was mainly driven by an increase in transaction costs of $0.4 million and an increase in other costs of $0.8 million primarily related to integration, restructuring and legal charges. Interest Expense, Net Interest expense, net for the three months ended March 31, 2026 was $3.2 million , a decrease of $5.1 million , as compared to $8.3 million for the three months ended March 31, 2025. The decrease in interest expense, net was primarily due to the year over year lower outstanding debt during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Debt Modification and Extinguishment Costs There were no debt modification and extinguishment costs for the three months ended March 31, 2026, compared to $1.0 million for the three months ended March 31, 2025 . On January 30, 2025, we amended our existing senior secured term loan facility to reduce the applicable interest rates. We 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 income (loss) during the three months ended March 31, 2025. Other Expense, Net There was no other expense, net for the three months ended March 31, 2026, compared to $0.1 million of other expense, net for the three months ended March 31, 2025 . Provision (Benefit) For Income Taxes The provision for income taxes for the three months ended March 31, 2026 was $3.6 million, compared to a benefit for income taxes of $2.3 million for the three months ended March 31, 2025. The effective income tax rate for the three months ended March 31, 2026 was 38.4%, compared to 21.6% for the three months ended March 31, 2025. Our effective income tax rate for the three months ended March 31, 2026 and 2025, respectively, fluctuated primarily due to the increased discrete tax impact relative to pre-tax book income related to a stock compensation shortfall. 30 Table of Contents The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the three months ended March 31, 2026 was mainly due to state and local taxes and a shortfall tax expense related to stock compensation impacting the effective income tax rate by 13%. Net Income (Loss) From Continuing Operations For the foregoing reasons, net income from continuing operations was $5.7 million for the three months ended March 31, 2026, compared to net loss from continuing operations of $8.1 million for the three months ended March 31, 2025. Adjusted EBITDA Adjusted EBITDA for the three months ended March 31, 2026 was $39.8 million, an increase of $18.5 million, or 86.9%, compared to $21.3 million for the three months ended March 31, 2025. The increase in Adjusted EBITDA was driven by higher sales volume of virgin and regenerated sulfuric acid driven by higher demand, less customer down-time, and contribution from the Waggaman, Louisiana location. In addition, higher virgin sulfuric acid pricing and favorable contractual pricing for regenerated sulfuric acid contributed to the increase. This was partially offset by higher manufacturing costs driven by higher turnaround costs, along with general inflation and higher transportation costs. A reconciliation of net income (loss) from continuing operations to Adjusted EBITDA is as follows: Three months ended March 31, 2026 2025 (in millions) Reconciliation of net income (loss) from continuing operations to Adjusted EBITDA Net income (loss) from continuing operations $ 5.7 $ (8.1) Provision (benefit) for income taxes 3.6 (2.3) Interest expense, net 3.2 8.3 Depreciation and amortization 20.5 18.3 EBITDA 33.0 16.2 Debt modification and extinguishment costs — 1.0 Net loss on asset disposals (a) 0.4 0.2 Transaction and other related costs (b) 1.2 0.8 Equity-based compensation 3.4 2.5 Restructuring, integration and business optimization expenses (c) 0.8 0.1 Other (d) 1.0 0.5 Adjusted EBITDA (1) $ 39.8 $ 21.3 (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). (1) We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation above. Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income (loss) 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. 31 Table of Contents Adjusted Net Income Summarized Adjusted Net Income information is shown below in the following table: Three months ended March 31, 2026 2025 Pre-tax amount Tax expense (benefit) After-tax amount Pre-tax amount Tax expense (benefit) After-tax amount (in millions) Reconciliation of net income (loss) from continuing operations to Adjusted Net Income (1)(2) Net income (loss) from continuing operations $ 9.3 $ 3.6 $ 5.7 $ (10.4) $ (2.3) $ (8.1) Debt modification and extinguishment costs — — — 1.0 0.2 0.8 Net loss on asset disposals (a) 0.4 0.1 0.3 0.2 0.1 0.1 Transaction and other related costs (b) 1.2 0.3 0.9 0.8 0.2 0.6 Equity-based compensation 3.4 (0.5) 3.9 2.5 0.3 2.2 Restructuring, integration and business optimization expenses (c) 0.8 0.2 0.6 0.1 — 0.1 Other (d) 1.0 0.2 0.8 0.5 0.1 0.4 Adjusted Net Income $ 16.1 $ 3.9 $ 12.2 $ (5.3) $ (1.4) $ (3.9) (1) We define Adjusted Net Income as net income (loss) 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 (loss) 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 (loss) 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. The adjustments to net income (loss) from continuing operations are shown net of applicable tax rates of 25.4% and 25.0% for the three months ended March 31, 2026 and 2025, 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. 32 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 March 31, 2026, we had cash and cash equivalents of $162.6 million and availability of $74.3 million under our ABL Facility, after giving effect to $2.2 million of outstanding letters of credit, for a total available liquidity of $236.9 million. We did not have any revolving credit facility borrowings as of March 31, 2026. As of March 31, 2026, we were in compliance with all covenants under our debt agreements. Our ABL Facility has one financial covenant with one ratio to maintain. The ratio compares the total ABL availability against a threshold: the greater of 10% of the line cap (which is 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. As of March 31, 2026, we were in compliance with the financial covenant under the ABL Facility. 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 March 31, 2026. We have no cash and cash equivalents held in foreign jurisdictions as of March 31, 2026. Our liquidity requirements include interest payments related to our debt structure. As reported, our cash interest paid for the three months ended March 31, 2026 and 2025 was approximately $4.9 million and $12.3 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 $4.0 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 financial statements included in Part 1, Item 1 — Financial Statements (Unaudited). Off-Balance Sheet Arrangements The Company’s off-balance sheet arrangements include $2.2 million of outstanding letters of credit on our ABL Facility as of March 31, 2026. 33 Table of Contents Cash Flow Three months ended March 31, 2026 2025 (in millions) Continuing Operations Net cash provided by (used in): Operating activities $ 19.6 $ 6.7 Investing activities (14.1) (17.1) Financing activities (37.4) (3.7) Discontinued Operations Net cash provided by (used in): Operating activities (2.7) 3.6 Investing activities — (7.2) Financing activities — (0.8) Net change in cash and cash equivalents (34.6) (18.5) Cash and cash equivalents at beginning of period 197.2 146.0 Cash and cash equivalents at end of period 162.6 127.5 Less: cash, cash equivalents, and restricted cash of discontinued operations — (11.5) Cash, cash equivalents and restricted cash at end of period of continuing operations $ 162.6 $ 116.0 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 $19.6 million for the three months ended March 31, 2026, compared to $6.7 million for the three months ended March 31, 2025. Cash generated by operating activities, other than changes in working capital, was higher by $14.7 million during the three months ended March 31, 2026, as compared to the same period in the prior year primarily due to higher earnings exclusive of non-cash expenses. The decrease in cash from working capital during the three months ended March 31, 2026 of $1.6 million was unfavorable compared to the three months ended March 31, 2025 primarily due to unfavorable changes in receivables and inventories, partially offset by favorable changes in accounts payable and accrued liabilities. The unfavorable change in inventory was primarily due to the effect of higher sulfur costs and timing of sales orders and inventory usage. The unfavorable change in receivables was driven by higher sulfur cost pass through and the timing of collection of sales. 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. Net cash used in investing activities was $14.1 million for the three months ended March 31, 2026, compared to $17.1 million during the same period in 2025. Net cash used in investing activities consisted of $14.1 million and $17.1 million to fund capital expenditures during the three months ended March 31, 2026 and 2025, respectively. Net cash used in financing activities was $37.4 million for the three months ended March 31, 2026, compared to $3.7 million during the same period in 2025. The unfavorable change in net cash used in financing activities was primarily driven by higher repurchases of the Company’s common stock during the three months ended March 31, 2026, partially offset by lower debt principal payments during the three months ended March 31, 2026 34 Table of Contents Debt March 31, 2026 December 31, 2025 (in millions) 2025 Term Loan Facility $ 397.1 $ 397.1 ABL Facility — — Total debt 397.1 397.1 Original issue discount (2.8) (2.9) Deferred financing costs (1.5) (1.6) Total long-term debt, net of original issue discount and deferred financing costs $ 392.8 $ 392.6 As of March 31, 2026, our total debt was $397.1 million, excluding the original issue discount of $2.8 million and deferred financing costs of $1.5 million for our senior secured credit facilities. Our net debt as of March 31, 2026 was $234.5 million, which reflects our total debt of $397.1 million less cash and cash equivalents of $162.6 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. Three months ended March 31, 2026 2025 (in millions) Maintenance capital expenditures $ 12.3 $ 15.4 Growth capital expenditures 2.0 1.2 Total capital expenditures $ 14.3 $ 16.6 Capital expenditures remained at a level sufficient for required maintenance and certain expansion growth initiatives during these periods. Maintenance capital expenditures were lower in the three months ended March 31, 2026, compared to the three months ended March 31, 2025 due to timing of capital projects 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. 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. 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. 35 Table of Contents