Item 1. Financial Statements
Item 1. Financial Statements and Supplementary Data (Unaudited)
Condensed Consolidated Statements of Operations
Three Months Ended March 31,
2025 2024
(In millions, except share and per share data)
Net sales $ 477.7 $ 502.9
Cost of sales 379.6 380.7
Gross profit 98.1 122.2
Selling, general and administrative expenses 58.4 61.5
Research and development costs 6.6 6.6
Other expenses, net 1.9 1.3
Income from operations 31.2 52.8
Interest and other financial expense, net 13.7 12.7
Income before earnings in affiliated companies and income taxes 17.5 40.1
Income tax expense 8.9 13.5
Earnings in affiliated companies, net of tax 0.5 0.1
Net income $ 9.1 $ 26.7
Weighted-average shares outstanding (in thousands):
Basic 57,058 58,640
Diluted 57,200 59,229
Earnings per share:
Basic $ 0.16 $ 0.46
Diluted $ 0.16 $ 0.45
See accompanying Notes to these Condensed Consolidated Financial Statements.
1
Table of Contents
Orion S.A.
Condensed Consolidated Statements of Comprehensive Income
Three Months Ended March 31,
2025 2024
(In millions)
Net income $ 9.1 $ 26.7
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments 2.6 ( 6.4 )
Net losses on derivatives ( 1.5 ) ( 0.5 )
Defined benefit plans, net ( 0.1 ) 0.1
Other comprehensive income (loss) 1.0 ( 6.8 )
Comprehensive income $ 10.1 $ 19.9
See accompanying Notes to these Condensed Consolidated Financial Statements.
2
Table of Contents
Orion S.A.
Condensed Consolidated Balance Sheets
March 31, 2025 December 31, 2024
(In millions, except share data)
ASSETS
Current assets
Cash and cash equivalents $ 37.5 $ 44.2
Accounts receivable, net 274.0 211.9
Inventories, net 297.0 290.4
Income tax receivables 12.6 12.6
Prepaid expenses and other current assets 67.5 54.2
Total current assets 688.6 613.3
Property, plant and equipment, net 982.4 965.0
Right-of-use assets 116.8 117.9
Goodwill 74.5 71.5
Intangible assets, net 17.5 18.5
Investment in equity method affiliates 10.0 8.0
Deferred income tax assets 46.1 21.6
Other assets 32.3 41.5
Total non-current assets 1,279.6 1,244.0
Total assets $ 1,968.2 $ 1,857.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 180.0 $ 156.2
Current portion of long-term debt and other financial liabilities 313.0 258.8
Accrued liabilities 35.1 39.5
Income taxes payable 10.8 4.8
Other current liabilities 63.0 57.4
Total current liabilities 601.9 516.7
Long-term debt, net 659.5 647.0
Employee benefit plan obligation 61.2 58.5
Deferred income tax liabilities 54.5 36.5
Other liabilities 125.0 123.7
Total non-current liabilities 900.2 865.7
Commitments and contingencies
Stockholders' equity
Common stock
Authorized: 65,992,259 and 65,992,259 shares with no par value
Issued – 60,992,259 and 60,992,259 shares with no par value
Outstanding – 56,459,366 and 57,242,372 shares
85.3 85.3
Treasury stock, at cost, 4,532,893 and 3,749,887
( 87.7 ) ( 82.2 )
Additional paid-in capital 72.5 84.7
Retained earnings 464.9 457.0
Accumulated other comprehensive loss ( 68.9 ) ( 69.9 )
Total stockholders' equity 466.1 474.9
Total liabilities and stockholders' equity $ 1,968.2 $ 1,857.3
TY
See accompanying Notes to these Condensed Consolidated Financial Statements.
3
Table of Contents
Orion S.A.
Condensed Consolidated Statements of Cash Flows
7
Three Months Ended March 31,
2025 2024
(In millions)
Cash flows from operating activities:
Net income $ 9.1 $ 26.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment and amortization of intangible assets and right of use assets 31.5 28.9
Amortization of debt issuance costs 0.4 0.4
Share-based compensation 2.7 3.5
Deferred tax provision ( 5.4 ) ( 4.3 )
Foreign currency transactions ( 2.0 ) ( 0.5 )
Changes in operating assets and liabilities, net:
Trade receivables ( 56.7 ) ( 33.2 )
Inventories 1.2 3.5
Trade payables 17.2 4.2
Other provisions ( 5.2 ) ( 3.3 )
Income tax liabilities 3.6 7.5
Other assets and liabilities, net 4.0 ( 1.0 )
Net cash provided by operating activities 0.4 32.4
Cash flows from investing activities:
Acquisition of property, plant and equipment ( 29.2 ) ( 33.1 )
Net cash used in investing activities ( 29.2 ) ( 33.1 )
Cash flows from financing activities:
Repayments of long-term debt ( 0.8 ) ( 0.8 )
Payments for debt issue costs — ( 0.1 )
Cash inflows related to current financial liabilities 56.2 49.7
Cash outflows related to current financial liabilities ( 12.6 ) ( 40.6 )
Dividends paid to shareholders ( 1.2 ) ( 1.2 )
Repurchase of Common stock ( 19.8 ) —
Net cash provided by financing activities 21.8 7.0
Increase (decrease) in cash, cash equivalents and restricted cash ( 7.0 ) 6.3
Cash, cash equivalents and restricted cash at the beginning of the period 44.6 40.2
Effect of exchange rate changes on cash 1.4 ( 1.0 )
Cash, cash equivalents and restricted cash at the end of the period 39.0 45.5
Less restricted cash at the end of the period
1.5 1.6
Cash and cash equivalents at the end of the period $ 37.5 $ 43.9
See accompanying Notes to these Condensed Consolidated Financial Statements.
4
Table of Contents
Orion S.A.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
Common stock Treasury shares Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total
(In millions, except share and per share amounts) Number Amount
Balance at January 1, 2025 57,242,372 $ 85.3 $ ( 82.2 ) $ 84.7 $ 457.0 $ ( 69.9 ) $ 474.9
Net income — — — — 9.1 — 9.1
Other comprehensive income, net of tax — — — — — 1.0 1.0
Dividends $ 0.02 per share — — — — ( 1.2 ) — ( 1.2 )
Repurchases of Common stock ( 1,358,316 ) — ( 19.8 ) — — — ( 19.8 )
Stock based compensation — — — 2.7 — — 2.7
Issuance of stock under equity compensation plans 575,310 — 14.3 ( 14.9 ) — — ( 0.6 )
Balance at March 31, 2025 56,459,366 $ 85.3 $ ( 87.7 ) $ 72.5 $ 464.9 $ ( 68.9 ) $ 466.1
j
Balance at January 1, 2024 57,898,772 $ 85.3 $ ( 70.1 ) $ 85.6 $ 417.6 $ ( 39.9 ) $ 478.5
Net income — — — — 26.7 — 26.7
Other comprehensive loss, net of tax — — — — — ( 6.8 ) ( 6.8 )
Dividends $ 0.02 per share — — — — ( 1.2 ) — ( 1.2 )
Repurchases of Common stock ( 294,000 ) — ( 6.8 ) — — — ( 6.8 )
Stock based compensation — — — 3.5 — — 3.5
Issuance of stock under equity compensation plans 703,161 — 13.4 ( 15.1 ) — — ( 1.7 )
Balance at March 31, 2024 58,307,933 $ 85.3 $ ( 63.5 ) $ 74.0 $ 443.1 $ ( 46.7 ) $ 492.2
See accompanying Notes to these Condensed Consolidated Financial Statements.
5
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statement (Unaudited)
Table of Contents—Notes
Note A. Organization, Description of the Business and Summary of Significant Accounting Policies
7
Note B. Accounts Receivable
7
Note C. Inventories
8
Note D. Debt and Other Obligations
8
Note E. Financial Instruments and Fair Value Measurement
9
Note F. Employee Benefit Plans
11
Note G. Accumulated Other Comprehensive Income (Loss)
12
Note H. Earnings Per Share
12
Note I. Income Taxes
12
Note J. Commitments and Contingencies
13
Note K. Financial Information by Segment
13
Note L. Subsequent Events
15
6
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
Note A. Organization, Description of the Business and Summary of Significant Accounting Policies
Orion S.A.’s unaudited Condensed Consolidated Financial Statements include Orion S.A. and its subsidiaries (“Orion” or the “Company”). The unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”) and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. These financial statements should be read in conjunction with the Consolidated Financial Statements included in our Annual Report in Form 10-K for the year ended December 31, 2024.
The accompanying unaudited Condensed Consolidated Financial Statements include all adjustments that are necessary for the fair presentation of our results for the interim periods presented. These statements contain some amounts that are based upon management estimates and judgments. Future actual results could differ from such current estimates. Results for interim periods are not necessarily indicative of results to be expected for the full year.
Summary of Significant Accounting Policies —Accounting Standards Adopted
Income Taxes —In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures . This guidance requires companies to disclose certain specific categories in the rate reconciliation and provide additional information for reconciling items that meet the quantitative threshold of 5% of the expected tax using the applicable statutory income tax rate. There is also a required disclosure to provide the net income taxes paid or received disaggregated by federal, state, and foreign taxes with jurisdictions to be separately disclosed if the jurisdiction is 5% or more of the total net income taxes paid or received.
Is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. We adopted this on January 1, 2025.
The adoption of this ASU did not materially impact our Consolidated Financial Statements, however, will require additional disclosures in our Annual Report in Form 10-K for the year ended December 31, 2025.
Summary of Significant Accounting Policies —Accounting Standards Not Yet Adopted
Consolidated Statements of Operations— In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, and in January 2025, ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-4 0) and Clarifying the Effective Date, respectively. This ASU requires public entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items.
This ASU does not change the expense captions an entity presents in the face of its Consolidated Statements of Operations. Rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the Consolidated Financial Statements.
This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted.
We believe, the adoption of this ASU will not materially impact our Consolidated Financial Statements, however, will require additional disclosures in the footnotes to the Consolidated Financial Statements.
Note B. Accounts Receivable
Accounts receivable, net of allowance for credit losses, are as follows:
March 31, 2025 December 31, 2024
(In millions)
Accounts receivable $ 275.6 $ 213.1
Expected credit losses ( 1.6 ) ( 1.2 )
Accounts receivable, net $ 274.0 $ 211.9
Accounts Receivable Factoring Facilities ― For the three months ended March 31, 2025 and 2024 the gross amount of receivables sold were $ 102.5 million and $ 107.6 million, respectively.
In the Condensed Consolidated Statements of Operations, the loss on receivables sold is reflected in Other expenses, net. For the three months ended March 31, 2025 and 2024 the loss on receivables sold was approximately $ 1.2 million and $ 1.1 million, respectively.
7
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
Note C. Inventories
Inventories, net of reserves, are as follows:
March 31, 2025 December 31, 2024
(In millions)
Raw materials, consumables and supplies, net $ 120.1 $ 103.8
Work in process 0.2 0.1
Finished goods, net 176.7 186.5
Inventories, net $ 297.0 $ 290.4
Note D. Debt and Other Obligations
Debt and other obligations are as follows:
March 31, 2025 December 31, 2024
(In millions)
Current
Current portion of Term-Loan $ 3.0 $ 3.0
Deferred debt issuance costs - Term-Loan ( 0.8 ) ( 0.8 )
Current portion of China Term-Loan 5.7 5.7
Other short-term debt and obligations 305.1 250.9
Current portion of long-term debt and other financial liabilities 313.0 258.8
Non-current
Term-Loan 610.9 598.9
Deferred debt issuance costs - Term-Loan ( 2.0 ) ( 2.1 )
China Term-Loan 50.6 50.2
Long-term debt, net 659.5 647.0
Total $ 972.5 $ 905.8
8
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
Other Short-Term Debt and Obligations
March 31, 2025 December 31, 2024
(In millions)
Revolving Credit Facility $ 16.2 $ —
Ancillary Credit Facilities
OEC GmbH outstanding borrowings 155.0 147.8
OEC LLC outstanding borrowings 21.4 14.0
OEC Huaibei outstanding borrowings 21.0 16.5
Korea Working Capital Loans (capacity $ 49.2 million)
Uncommitted 1.7 1.7
Committed 23.7 22.7
China Working Capital Loans (capacit y $ 16.9 million)
16.8 11.7
Repurchase Agreement 49.3 36.5
Total of Other Short-term Debt and Obligations $ 305.1 $ 250.9
Supplemental information:
Total ancillary capacity - EUR € 234.0 € 234.0
Total ancillary capacity - U.S. Dollars $ 253.1 $ 243.1
Revolving credit facility
As of March 31, 2025, total capacity under our senior secured revolving credit facility (the “RCF”) and ancillary facilities is € 300 million ($ 324.5 million). As of March 31, 2025 and December 31, 2024, availability under the RCF and ancillary facilities is $ 104.8 million and $ 127.5 million, respectively.
As of March 31, 2025, borrowings under the RCF were $ 16.2 million. There were no borrowings under the RCF as of December 31, 2024. We classify amounts outstanding under the RCF as current in our Condensed Consolidated Balance Sheets as the borrowings are for short-term working capital needs, typically for one-month periods, and based on management’s intention to repay the amounts outstanding within one year from the date of drawing.
Repurchase Agreement —We entered into repurchase agreements to sell European Emission Allowance (“EUA”) certificates. Under the agreement on August 23, 2024, we sold 500 thousand EUA certificates for € 35.1 million cash to a counterparty. The same counterparty has an obligation to resell, and we have the obligation to purchase, the same or substantially the same EUA certificates on June 25, 2025 for € 36.5 million.
On March 19, 2025, we sold an additional 145 thousand EUA certificates for € 10.5 million cash to another counterparty. This counterparty also has an obligation to resell, and we have the obligation to purchase the same or substantially the same EUA certificates on January 28, 2026 for € 10.8 million.
The difference between the considerations received and the amount of consideration to be paid will be recognized as an interest expense. At March 31, 2025, the amount outstanding, including accrued interest, was $ 50.3 million. Due to the short maturity, the carrying value approximates the fair value.
As of March 31, 2025, we are in compliance with our debt covenants.
For additional information relating to our debt, see “ Note J. Debt and Other Obligations” , included in our Annual Report in Form 10-K for the year ended December 31, 2024.
Note E. Financial Instruments and Fair Value Measurement
Risk management
We have policies governing the use of derivative instruments and do not enter into financial instruments for trading or speculative purposes.
By using derivative instruments, we are subject to credit and market risk. To minimize counterparty credit (or repayment) risk, we enter into transactions primarily with investment grade financial institutions. The market risk exposure is not hedged in a manner to completely eliminate the effects of changing market conditions on earnings or cash flow.
9
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
No significant concentration of credit risk existed as of March 31, 2025 or December 31, 2024.
Fair value measurement
The following table summarizes outstanding financial instruments that are measured at fair value on a recurring basis:
March 31, 2025 December 31, 2024 Balance Sheet Classification
Notional Amount Fair Value Notional Amount Fair Value
(In millions)
Assets
Derivatives designated as hedges:
Cross currency swaps $ 197.0 $ 29.9 $ 197.0 $ 38.9 Other financial assets (non-current)
Total $ 197.0 $ 29.9 $ 197.0 $ 38.9
All financial instruments in the table above are classified as Level 2. We present the gross assets and liabilities of our derivative financial instruments in the Condensed Consolidated Balance Sheets.
For financial assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period. There were no transfers of assets measured at fair value between Level 1 and Level 2 and there were no Level 3 investments during 2025 or 2024.
The following table presents the carrying value and estimated fair value of our financial instruments that are not measured at fair value on a recurring basis for the periods presented. Short-term and Long-term debt are recorded at amortized cost in the Condensed Consolidated Balance Sheets.
March 31, 2025 December 31, 2024
Notional Amount Fair Value Notional Amount Fair Value
(In millions)
Non-derivatives:
Liabilities:
Term-Loan $ 613.9 $ 613.9 $ 601.9 $ 601.9
China Term-Loan 56.3 57.2 55.9 56.8
Total $ 670.2 $ 671.1 $ 657.8 $ 658.7
The Term-Loan and China Term-Loan in the table above are classified as Level 2.
At both March 31, 2025 and December 31, 2024, the fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term borrowings approximated their carrying values due to the short-term nature of these instruments.
The carrying amounts of our variable rate debt approximate the fair values due to variable interest rates with short reset periods.
10
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
The following tables summarize the pre-tax effect of derivative and non-derivative instruments recorded in Accumulated other comprehensive income (loss) (“AOCI”), the gains (losses) reclassified from AOCI to earnings and additional gains (losses) recognized directly in earnings:
Effect of Financial Instruments
Three Months Ended Mar 31,
Gain (Loss) Recognized in AOCI Gain (Loss) Reclassified from AOCI to Income Income Statement Classification
2025 2024 2025 2024
(In millions)
Derivatives designated as hedges:
Cross currency swaps $ ( 2.0 ) $ 0.7 $ ( 0.3 ) $ 0.4 Interest and other financial expense, net
Interest rate swaps — ( 2.0 ) — — Interest and other financial expense, net
Total $ ( 2.0 ) $ ( 1.3 ) $ ( 0.3 ) $ 0.4
Cross currency swaps related to our Term-Loans, which mature in September 2028, are designated as cash flow hedges.
In the next twelve months, approximately $ 1.1 million recognized in AOCI related to cash flow hedges will be reclassified to the Condensed Consolidated Statement of Operations.
See “ Note K. Financial Instruments and Fair Value Measurement” , included in our Annual Report in Form 10-K for the year ended December 31, 2024, for additional information relating to our derivatives instruments.
Note F. Employee Benefit Plans
Provisions for pensions are established to cover benefit plans for retirement, disability and surviving dependents’ pensions. The benefit obligations vary depending on the legal, tax and economic circumstances in various countries in which the Company operates. Generally, the level of benefit depends on the length of service and the remuneration.
Net periodic defined benefit pension costs include the following:
Three Months Ended March 31,
2025 2024
(In millions)
Service cost $ 0.3 $ 0.3
Interest cost 0.6 0.4
Net periodic pension cost $ 0.9 $ 0.7
Service costs were recorded in Income from operations in Selling, general and administrative expenses, and interest costs were recorded in Interest and other financial expense, net.
11
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
Note G. Accumulated Other Comprehensive Income (Loss)
Changes in each component of AOCI, net of tax, are as follows:
Currency Translation Adjustments Hedging Activities Adjustments Pension and Other Postretirement Benefit Liability Adjustment Total
(In millions)
Balance at January 1, 2025 $ ( 79.4 ) $ 10.8 $ ( 1.3 ) $ ( 69.9 )
Other comprehensive income (loss) before reclassifications 2.3 ( 2.8 ) — ( 0.5 )
Income tax effects before reclassifications 0.3 0.9 — 1.2
Amounts reclassified from AOCI — ( 0.3 ) — ( 0.3 )
Income tax effects on reclassifications — 0.1 — 0.1
Currency translation AOCI — 0.6 ( 0.1 ) 0.5
Balance at March 31, 2025 ( 76.8 ) 9.3 ( 1.4 ) ( 68.9 )
Balance at January 1, 2024 $ ( 55.1 ) $ 16.1 $ ( 0.9 ) $ ( 39.9 )
Other comprehensive loss before reclassifications ( 6.3 ) ( 0.4 ) 0.2 ( 6.5 )
Income tax effects before reclassifications ( 0.1 ) 0.1 ( 0.1 ) ( 0.1 )
Amounts reclassified from AOCI — 0.4 — 0.4
Income tax effects on reclassifications — ( 0.1 ) — ( 0.1 )
Currency translation AOCI — ( 0.5 ) — ( 0.5 )
Balance at March 31, 2024 ( 61.5 ) 15.6 ( 0.8 ) ( 46.7 )
Note H. Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing Net income attributable to Orion by the weighted average number of common stock outstanding during the period. Diluted EPS equals Net income attributable to Orion divided by the weighted average number of common stock outstanding during the period, adjusted for the dilutive effect of our stock–based and other equity compensation awards.
The following table reflects the income and share data used in the basic and diluted EPS computations:
Three Months Ended March 31,
2025 2024
(In millions, except share and per share data)
Net income attributable to ordinary equity holders $ 9.1 $ 26.7
Weighted average number of Common stock (in thousands) 57,058 58,640
Basic EPS $ 0.16 $ 0.46
Dilutive effect of share based payments (in thousands) 142 589
Weighted average number of diluted Common stock (in thousands) 57,200 59,229
Diluted EPS $ 0.16 $ 0.45
Note I. Income Taxes
The Company records its tax provision or benefit on an interim basis using an estimated annual effective tax rate. This rate is applied to the current period ordinary income to determine the income tax provision or benefit allocated to the interim period. Losses from jurisdictions for which no benefit can be recognized and the income tax effects of unusual and infrequent items are excluded from the estimated annual effective tax rate and are recognized in the impacted interim period as discrete items. Valuation allowances are provided against any future tax benefits that arise from losses in jurisdictions for which no benefit can be recognized. The estimated annual effective tax rate may be significantly impacted by nondeductible expenses and by the Company’s projected earnings mix by tax jurisdiction. Adjustments to the estimated annual effective income tax rate are recognized in the period when such estimates are revised.
The income tax expense for the three months ended March 31, 2025 and 2024 were $ 8.9 million and $ 13.5 million, respectively.
12
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
Our effective income tax rates were as follows:
Three Months Ended March 31,
2025 2024
Effective income tax rates 50.9 % 33.7 %
The change in our effective tax rate for the three and three months ended March 31, 2025 as compared to the three and three months ended March 31, 2024 was primarily attributable to changes in projected pre-tax income mix in countries with varying statutory tax rates.
Note J. Commitments and Contingencies
Legal Proceedings— We are subject to various lawsuits and claims including, but not limited to, matters involving contract disputes, environmental damages, personal injury and property damage. We vigorously defend ourselves and prosecute these matters as appropriate. We regularly assess the adequacy of legal accruals based on our professional judgment, experience and the information available regarding our cases.
The outcome of legal proceedings is inherently uncertain, and we offer no assurances as to the outcome of any of these matters or their effect on the Company.
Based on consideration of all relevant facts and circumstances, we do not believe the ultimate outcome of any currently pending lawsuit against us will have a material adverse effect upon our operations, financial condition or the Condensed Consolidated Financial Statements.
Pledges and guarantees
The Company has pledged the majority of its assets (amongst others shares in affiliates, bank accounts and receivables) within the different regions in which it operates excluding China as collateral under its debt agreements. As of March 31, 2025, the Company had guarantees totaling $ 24.3 million issued by various financial institutions.
Note K. Financial Information by Segment
Segment information
We disclose the results of each of our operating segments in accordance with ASC 280, Segment Reporting . We manage our business in two operating segments as follows:
• Rubber Carbon Black —Used in the reinforcement of rubber in tires and mechanical rubber goods, and
• Specialty Carbon Black —Used for protection, colorization and conductivity in coatings, polymers, batteries, printing and other special applications.
Corporate includes income and expenses that cannot be directly allocated to the business segments or that are managed at the corporate level. This includes finance income and expenses, taxes and items with less bearing on the underlying core business.
Our operations are managed by senior executives who report to our Chief Executive Officer (“CEO”), the chief operating decision maker (“CODM”). Discrete financial information is available for each of the segments, and the CODM uses operating results of each operating segment for performance evaluation and resource allocation.
Our CODM uses Adjusted EBITDA as the primary measure for reviewing our segment profitability. We define Adjusted EBITDA as Income from operations before depreciation and amortization, share-based compensation, and non-recurring items (such as restructuring expenses, legal settlements gains, etc.) plus Earnings in affiliated companies, net of tax.
The CODM does not review reportable segment asset or liability information for purposes of assessing performance or allocating resources.
13
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
Segment operating results for the three months ended March 31, 2025 and 2024 are as follows:
Rubber Specialty Corporate Total
(In millions)
2025
Net sales from external customers $ 317.0 $ 160.7 $ — $ 477.7
Cost of Sales 258.9 120.7 — 379.6
Gross Profit 58.1 40.0 — 98.1
Selling, general and administrative expenses 36.1 22.0 0.3 58.4
Other segment items 4.6 3.6 0.3 8.5
Income (loss) from operations 17.4 14.4 ( 0.6 ) 31.2
LTIP and other non-operating charges 1.8 0.6 0.6 3.0
Equity in earnings of affiliated companies, net of tax 0.5 — — 0.5
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 21.1 10.4 — 31.5
Adjusted EBITDA $ 40.8 $ 25.4 $ — $ 66.2
Assets $ 1,105.4 $ 732.6 $ 130.2 $ 1,968.2
Capital expenditures 14.1 15.1 — 29.2
2024
Net sales from external customers $ 332.0 $ 170.9 $ — $ 502.9
Cost of Sales 251.5 129.2 — 380.7
Gross Profit 80.5 41.7 — 122.2
Selling, general and administrative expenses 38.4 22.9 0.2 61.5
Other segment items 3.7 4.2 — 7.9
Income (loss) from operations 38.4 14.6 ( 0.2 ) 52.8
LTIP and other non-operating charges 2.2 1.1 0.2 3.5
Equity in earnings of affiliated companies, net of tax 0.1 — — 0.1
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 16.7 12.2 — 28.9
Adjusted EBITDA $ 57.4 $ 27.9 $ — $ 85.3
Assets $ 1,021.6 $ 717.6 $ 135.4 $ 1,874.6
Capital expenditures 18.4 14.7 — 33.1
Other segment items —Other segment items for each reportable segment includes Research and Development costs and Other expense (income), net.
14
Table of Contents
Orion S.A
Notes to the Condensed Consolidated Financial Statements—(continued)
A reconciliation of Income before earnings in affiliated companies and income taxes to Adjusted EBITDA for each of the periods presented is as follows:
Three Months Ended March 31,
2025 2024
(In millions)
Income before earnings in affiliated companies and income taxes $ 17.5 $ 40.1
LTIP and other non-operating charges 3.0 3.5
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 31.5 28.9
Equity in earnings of affiliated companies, net of tax 0.5 0.1
Interest and other financial expense, net 13.7 12.7
Adjusted EBITDA $ 66.2 $ 85.3
LTIP and other non-operating charges include the following:
Three Months Ended March 31,
2025 2024
(In millions)
Long term incentive plan $ 2.7 $ 3.5
Other non-operating 0.3 —
LTIP and other non-operating charges $ 3.0 $ 3.5
Note L. Subsequent Events
Cash Flows Hedge—Subsequent March 31, 2025 , to hedge the variable interest rate Euro-denominated term loan, on April 25, 2025, the Company entered into two interest rate swaps aggregating to € 200.0 million. The fixed interest rates vary between 1.925 % and 1.928 % as compared to the floating rate, which is based on SOFR. The interest rate swaps will expire on September 25, 2028 in line with the maturity of the Term-Loan.
15
Table of Contents
Orion S.A.
Management’s Discussion and Analysis of Financial Condition and Results of Operation
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.