Item 1. Financial Statements
Item 1. Financial Statements and Supplementary Data (Unaudited)
Condensed Consolidated Statements of Operations
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions, except share and per share data)
Net sales $ 450.9 $ 463.4 $ 1,395.0 $ 1,443.3
Cost of sales 365.3 355.9 1,112.9 1,103.8
Gross profit 85.6 107.5 282.1 339.5
Selling, general and administrative expenses 57.5 57.9 173.6 179.7
Research and development costs 6.9 7.0 20.0 20.1
Loss (recovery) due to misappropriation of assets, net ( 7.3 ) 60.7 ( 6.5 ) 60.7
Goodwill impairment 80.8 — 80.8 —
Other (income) expenses, net 1.4 ( 2.8 ) 4.6 ( 0.1 )
Income (loss) from operations ( 53.7 ) ( 15.3 ) 9.6 79.1
Interest and other financial expense, net 14.4 15.9 47.2 40.8
Income (loss) before earnings in affiliated companies and income taxes ( 68.1 ) ( 31.2 ) ( 37.6 ) 38.3
Income tax expense (benefit) ( 0.5 ) ( 10.8 ) 13.0 11.8
Earnings in affiliated companies, net of tax 0.5 0.2 1.6 0.5
Net income (loss) $ ( 67.1 ) $ ( 20.2 ) $ ( 49.0 ) $ 27.0
Weighted-average shares outstanding (in thousands):
Basic 56,046 58,191 56,415 58,406
Diluted 56,249 58,738 56,663 58,942
Earnings (loss) per share:
Basic $ ( 1.20 ) $ ( 0.35 ) $ ( 0.87 ) $ 0.46
Diluted $ ( 1.20 ) $ ( 0.35 ) $ ( 0.87 ) $ 0.46
See accompanying Notes to these Condensed Consolidated Financial Statements.
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Condensed Consolidated Statements of Comprehensive Income
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions)
Net income (loss) $ ( 67.1 ) $ ( 20.2 ) $ ( 49.0 ) $ 27.0
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments ( 1.1 ) 3.3 ( 1.1 ) ( 11.4 )
Net gains (losses) on derivatives 0.8 ( 3.2 ) ( 2.7 ) ( 4.9 )
Defined benefit plans, net — — ( 0.2 ) 0.2
Other comprehensive income (loss) ( 0.3 ) 0.1 ( 4.0 ) ( 16.1 )
Comprehensive income (loss) $ ( 67.4 ) $ ( 20.1 ) $ ( 53.0 ) $ 10.9
See accompanying Notes to these Condensed Consolidated Financial Statements.
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Condensed Consolidated Balance Sheets
September 30, 2025 December 31, 2024
(In millions, except share data)
ASSETS
Current assets
Cash and cash equivalents $ 51.3 $ 44.2
Accounts receivable, net 265.1 211.9
Inventories, net 278.9 290.4
Income tax receivables 15.7 12.6
Prepaid expenses and other current assets 72.5 54.2
Total current assets 683.5 613.3
Property, plant and equipment, net 1,045.7 965.0
Right-of-use assets 126.8 117.9
Goodwill — 71.5
Intangible assets, net 15.8 18.5
Investment in equity method affiliates 11.9 8.0
Deferred income tax assets 58.1 21.6
Other assets 22.1 41.5
Total non-current assets 1,280.4 1,244.0
Total assets $ 1,963.9 $ 1,857.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 181.4 $ 156.2
Current portion of long-term debt and other financial liabilities 329.6 258.8
Accrued liabilities 37.9 39.5
Income taxes payable 21.1 4.8
Other current liabilities 65.3 57.4
Total current liabilities 635.3 516.7
Long-term debt, net 680.6 647.0
Employee benefit plan obligation 67.0 58.5
Deferred income tax liabilities 42.8 36.5
Other liabilities 136.4 123.7
Total non-current liabilities 926.8 865.7
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 – 56,149,706 and 57,242,372 shares
85.3 85.3
Treasury stock, at cost, 4,842,553 and 3,749,887
( 90.3 ) ( 82.2 )
Additional paid-in capital 77.4 84.7
Retained earnings 403.3 457.0
Accumulated other comprehensive loss ( 73.9 ) ( 69.9 )
Total stockholders' equity 401.8 474.9
Total liabilities and stockholders' equity $ 1,963.9 $ 1,857.3
TY
See accompanying Notes to these Condensed Consolidated Financial Statements.
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Condensed Consolidated Statements of Cash Flows
Goodwill7
Nine Months Ended September 30,
2025 2024
(In millions)
Cash flows from operating activities:
Net income $ ( 49.0 ) $ 27.0
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 97.2 90.0
Goodwill impairment 80.8 —
Amortization of debt issuance costs 1.2 1.1
Share-based compensation 10.0 11.3
Deferred taxes ( 27.1 ) ( 12.0 )
Foreign currency transactions ( 9.8 ) ( 7.4 )
Changes in operating assets and liabilities, net:
Trade receivables ( 32.9 ) ( 26.2 )
Inventories 34.3 ( 17.6 )
Trade payables 3.9 ( 8.2 )
Other provisions ( 3.5 ) 2.6
Income tax liabilities 8.8 ( 29.5 )
Other assets and liabilities, net 9.0 ( 0.3 )
Net cash provided by operating activities 122.9 30.8
Cash flows from investing activities:
Acquisition of property, plant and equipment ( 112.3 ) ( 135.7 )
Net cash used in investing activities ( 112.3 ) ( 135.7 )
Cash flows from financing activities:
Repayments of long-term debt ( 5.2 ) ( 2.8 )
Payments for debt issue costs ( 3.5 ) ( 0.2 )
Cash inflows related to current financial liabilities 122.6 242.1
Cash outflows related to current financial liabilities ( 91.1 ) ( 98.3 )
Dividends paid ( 3.5 ) ( 3.6 )
Repurchase of Common stock ( 24.8 ) ( 17.9 )
Net cash provided by (used in) financing activities ( 5.5 ) 119.3
Increase in cash, cash equivalents and restricted cash 5.1 14.4
Cash, cash equivalents and restricted cash at the beginning of the period 44.7 40.2
Effect of exchange rate changes on cash 3.0 0.1
Cash, cash equivalents and restricted cash at the end of the period 52.8 54.7
Less restricted cash at the end of the period
1.5 1.5
Cash and cash equivalents at the end of the period $ 51.3 $ 53.2
See accompanying Notes to these Condensed Consolidated Financial Statements.
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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
Net income — — — — 9.0 — 9.0
Other comprehensive loss, net of tax — — — — — ( 4.7 ) ( 4.7 )
Dividends $ 0.04 per share — — — — ( 2.3 ) — ( 2.3 )
Repurchases of Common stock ( 444,790 ) — ( 5.0 ) — — — ( 5.0 )
Stock based compensation — — — 3.6 — — 3.6
Issuance of stock under equity compensation plans 31,650 — 2.4 ( 2.6 ) — — ( 0.2 )
Balance at June 30, 2025 56,046,226 $ 85.3 $ ( 90.3 ) $ 73.5 $ 471.6 $ ( 73.6 ) $ 466.5
Net loss — — — — ( 67.1 ) — ( 67.1 )
Other comprehensive loss, net of tax — — — — — ( 0.3 ) ( 0.3 )
Dividends $ 0.02 per share — — — — ( 1.2 ) — ( 1.2 )
Stock based compensation — — — 3.7 — — 3.7
Issuance of stock under equity compensation plans 103,480 — — 0.2 — — 0.2
Balance at September 30, 2025 56,149,706 $ 85.3 $ ( 90.3 ) $ 77.4 $ 403.3 $ ( 73.9 ) $ 401.8
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
Net income — — — — 20.5 — 20.5
Other comprehensive loss, net of tax — — — — — ( 9.4 ) ( 9.4 )
Dividends $ 0.04 per share — — — — ( 2.4 ) — ( 2.4 )
Stock based compensation — — — 3.0 — — 3.0
Issuance of stock under equity compensation plans 48,688 — 0.8 ( 0.8 ) — — —
Balance at June 30, 2024 58,356,621 $ 85.3 $ ( 62.7 ) $ 76.2 $ 461.2 $ ( 56.1 ) $ 503.9
Net loss — — — — ( 20.2 ) — ( 20.2 )
Other comprehensive income, net of tax — — — — — 0.1 0.1
Dividends $ 0.02 per share — — — — ( 1.2 ) — ( 1.2 )
Repurchases of Common stock ( 636,402 ) — ( 11.1 ) — — — ( 11.1 )
Stock based compensation — — — 4.8 — — 4.8
Balance at September 30, 2024 57,720,219 $ 85.3 $ ( 73.8 ) $ 81.0 $ 439.8 $ ( 56.0 ) $ 476.3
See accompanying Notes to these Condensed Consolidated Financial Statements.
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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
8
Note C. Inventories
8
Note D. Goodwill
8
Note E. Debt and Other Obligations
9
Note F. Financial Instruments and Fair Value Measurement
10
Note G. Employee Benefit Plans
12
Note H. Accumulated Other Comprehensive Income (Loss)
13
Note I. Earnings Per Share
14
Note J. Income Taxes
14
Note K. Commitments and Contingencies
14
Note L. Financial Information by Segment
15
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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 (the “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 (the “Consolidated Financial Statements”) included in our Annual Report on 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 Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2025-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2025-09”). 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.
This ASU 2025-09 is effective for fiscal years beginning after December 15, 2024. We adopted this on January 1, 2025.
The adoption of this ASU 2025-09 did not materially impact our Consolidated Financial Statements, however, will require additional disclosures in our Annual Report on Form 10-K for the year ended December 31, 2025.
Summary of Significant Accounting Policies —Accounting Standards Not Yet Adopted
Intangible Assets— In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). This ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming.
Under the new standard, entities will start capitalizing eligible costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software.
The new guidance will be effective for all entities for annual periods beginning after December 15, 2027. The guidance can be applied on a fully prospective basis, a modified basis for in-process projects, or a full retrospective basis.
We are currently assessing the impact of adopting the new guidance in our Consolidated Financial Statements.
Consolidated Statements of Operations— In November 2024, the FASB issued Accounting Standards Update No. 2024-03, and in January 2025, ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”) and Clarifying the Effective Date (“ASU 2024-01”) , respectively. These ASUs require public entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items.
These ASUs do 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.
These ASUs are 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 these ASUs will not materially impact our Consolidated Financial Statements, however, will require additional disclosures in the footnotes to the Consolidated Financial Statements.
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Notes to the Condensed Consolidated Financial Statements—(continued)
Note B. Accounts Receivable
Accounts receivable, net of allowance for credit losses, are as follows:
September 30, 2025 December 31, 2024
(In millions)
Accounts receivable $ 266.5 $ 213.1
Expected credit losses ( 1.4 ) ( 1.2 )
Accounts receivable, net $ 265.1 $ 211.9
Accounts Receivable Factoring Facilities ― For the three months ended September 30, 2025 and 2024 the gross amount of receivables sold were $ 103.7 million and $ 104.7 million, respectively. For the nine months ended September 30, 2025 and 2024 the gross amount of receivables sold were $ 331.9 million and $ 323.1 million, respectively.
For the three months ended September 30, 2025 and 2024 the loss on receivables sold was approximately $ 1.2 million and $ 1.3 million, respectively. For the nine months ended September 30, 2025 and 2024 the loss on receivables sold was approximately $ 3.8 million and $ 3.7 million, respectively.
In the Condensed Consolidated Statements of Operations, the loss on receivables sold is reflected in Other (income) expenses, net.
Note C. Inventories
Inventories, net of reserves, are as follows:
September 30, 2025 December 31, 2024
(In millions)
Raw materials, consumables and supplies, net $ 117.7 $ 103.9
Finished goods, net 161.2 186.5
Inventories, net $ 278.9 $ 290.4
Note D. Goodwill
The carrying amount of goodwill attributable to each reportable segment are as follows:
Goodwill Rubber Specialty Total
(In millions)
Balance as of January 1, 2024
$ 30.5 $ 45.6 $ 76.1
Foreign currency impact ( 1.9 ) ( 2.7 ) ( 4.6 )
Balance as of December 31, 2024
28.6 42.9 71.5
Impairment ( 32.3 ) ( 48.5 ) ( 80.8 )
Foreign currency impact 3.7 5.6 9.3
Balance as of September 30, 2025 1
$ — $ — $ —
1 At September 30, 2025, accumulated goodwill impairment was $ 80.8 million.
Goodwill is tested for impairment annually at September 30, or whenever events or changes in circumstances indicate that the fair value of a reporting unit with goodwill is below its carrying amount.
During the third quarter of 2025, we experienced a significant decrease in the trading price of our common stock. In our Rubber reporting unit, elevated levels of low value tire imports from Asia during 2025 have indirectly impacted our demand in core Western markets and our overall profitability. In our Specialty reporting unit, persistently soft industrial economies coupled with uncertainty related to global trade, tariffs and regulatory matters have impacted our demand and portfolio mix. As a result, we performed quantitative impairment assessment for each of our two reporting units at September 30, 2025.
For our quantitative assessment, we estimated the value of each of our reporting units using both a discounted cash flows (“DCF”) analysis and a multiple of expected future cash flows, such as those used by third-party analysts. The DCF analysis included market participant weighted average cost of capital, revenue, gross margin, capital expenditures, and long-term growth rates based on historical information and our best estimate of future forecasts. The market approach involved significant judgment, including the selection of an appropriate peer
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Notes to the Condensed Consolidated Financial Statements—(continued)
group, selection of valuation multiples, and determination of the appropriate weighting in our valuation model. These assumptions included the use of significant unobservable inputs, representative of a Level 3 fair value measurement.
Based on our quantitative assessments, we concluded that the calculated fair value of our Rubber Carbon Black (“RCB”) and Specialty Carbon Black (“SCB”) reporting units were lower than their respective book values. As a result, we recognized a non-cash goodwill impairment charge of $ 80.8 million in the third quarter of 2025 for both reporting units. No tax benefit was recorded because it is a non-tax-deductible expense.
There were no impairments charge for the three or nine months ended September 30, 2024.
See “ Note A. Significant Accounting Policies” , included in our Annual Report on Form 10-K for the year ended December 31, 2024, for additional information relating to our goodwill accounting policy.
Note E. Debt and Other Obligations
Debt and other obligations are as follows:
September 30, 2025 December 31, 2024
(In millions)
Current
Current portion of Term-Loan $ 3.0 $ 3.0
Deferred debt issuance costs - Term-Loan ( 0.9 ) ( 0.8 )
Current portion of China Term-Loan 9.3 5.7
Other short-term debt and obligations 318.2 250.9
Current portion of long-term debt and other financial liabilities 329.6 258.8
Non-current
Term-Loan 637.2 598.9
Deferred debt issuance costs - Term-Loan ( 1.7 ) ( 2.1 )
China Term-Loan 45.1 50.2
Long-term debt, net 680.6 647.0
Total $ 1,010.2 $ 905.8
Other Short-Term Debt and Obligations
September 30, 2025 December 31, 2024
(In millions)
Revolving Credit Facility $ 58.7 $ —
Ancillary Credit Facilities
OEC GmbH outstanding borrowings 155.1 147.8
OEC LLC outstanding borrowings 11.7 14.0
OEC Huaibei outstanding borrowings 13.0 16.5
Korea Working Capital Loans (capacity $ 51.7 million)
Uncommitted 1.8 1.7
Committed 17.8 22.7
China Working Capital Loans (capacit y $ 17.1 million)
17.1 11.7
Repurchase Agreement 43.0 36.5
Total of Other Short-term Debt and Obligations $ 318.2 $ 250.9
Supplemental information:
Total ancillary capacity - EUR € 234.0 € 234.0
Total ancillary capacity - U.S. Dollars $ 274.7 $ 243.1
Revolving credit facility
In September 2025, Orion entered into the Fourteenth Amendment to the Credit Agreement, which amended and restated our senior secured revolving credit facility (the “RCF”). We added € 50.0 million to our RCF capacity, which expands our facility to € 350.0 million. Under the amended RCF, Net Leverage, as defined in the Credit Agreement, is not permitted to exceed 5.0 x on or before December 31,
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Notes to the Condensed Consolidated Financial Statements—(continued)
2026 and 4.5 x thereafter. Other Credit Agreement provisions relating to the RCF, including the commitment fee, substantially remained unchanged.
In connection with the modification of the RCF, we incurred approximately $ 4.7 million of costs.
As of September 30, 2025, total capacity under our RCF and ancillary facilities is € 350 million ($ 410.9 million). As of September 30, 2025 and December 31, 2024, availability under the RCF and ancillary facilities is $ 165.8 million and $ 127.5 million, respectively.
As of September 30, 2025, borrowings under the RCF were $ 58.7 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 as follows:
• On March 19, 2025, we sold 145 thousand EUA certificates for € 10.5 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 January 28, 2026 for € 10.8 million.
• On September 16, 2025, we sold approximately 320 thousand EUA certificates for € 24.6 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 € 24.8 million.
• On September 29, 2025, we sold approximately 21 thousand EUA certificates for € 1.6 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 € 1.6 million.
The difference between the considerations received and the amount of consideration to be paid will be recognized as an interest expense. At September 30, 2025, the amount outstanding, including accrued interest, was € 36.8 million ($ 43.2 million). Due to the short maturity, the carrying value approximates the fair value.
As of September 30, 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 on Form 10-K for the year ended December 31, 2024.
Note F. 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.
No significant concentration of credit risk existed at September 30, 2025 or at December 31, 2024.
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Notes to the Condensed Consolidated Financial Statements—(continued)
Fair value measurement
The following table summarizes outstanding financial instruments that are measured at fair value on a recurring basis:
September 30, 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 $ 12.5 $ 197.0 $ 38.9 Other financial assets (non-current)
Interest rate swaps 234.8 1.3 — — Other financial assets (non-current)
Total $ 431.8 $ 13.8 $ 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.
New Cash Flows Hedge— 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 interest rate for two fixed interest rate swaps are 1.925 % and 1.928 %. The floating rate is based on Secured Overnight Financing Rate (“SOFR”). The interest rate swaps will expire on September 25, 2028 in line with the maturity of the term loan (the “Term-Loan”).
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.
September 30, 2025 December 31, 2024
Notional Amount Fair Value Notional Amount Fair Value
(In millions)
Non-derivatives:
Liabilities:
Term-Loan $ 640.2 $ 630.5 $ 601.9 $ 601.9
China Term-Loan 54.4 54.8 55.9 56.8
Total $ 694.6 $ 685.3 $ 657.8 $ 658.7
The Term-Loan and China Term-Loan in the table above are classified as Level 2.
At both September 30, 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.
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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 Sep 30,
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 $ 0.5 $ ( 4.1 ) $ ( 0.3 ) $ ( 0.3 ) Interest and other financial expense, net
Interest rate swaps 0.8 — — ( 0.6 ) Interest and other financial expense, net
Total $ 1.3 $ ( 4.1 ) $ ( 0.3 ) $ ( 0.9 )
Effect of Financial Instruments
Nine Months Ended September 30,
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 $ ( 4.1 ) $ ( 3.3 ) $ ( 0.4 ) $ 0.5 Interest and other financial expense, net
Interest rate swaps 1.3 ( 4.1 ) ( 0.6 ) Interest and other financial expense, net
Total $ ( 2.8 ) $ ( 7.4 ) $ ( 0.4 ) $ ( 0.1 )
Cross currency and interest rate swaps are designated as cash flow hedges of principal and interest payments related to our Term-Loans, which mature in September 2028.
In the next twelve months, approximately $ 1.2 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 on Form 10-K for the year ended December 31, 2024, for additional information relating to our derivatives instruments.
Note G. 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 September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions)
Service cost $ 0.2 $ 0.3 $ 0.7 $ 0.8
Interest cost 0.7 0.7 2.1 1.9
Net periodic pension cost $ 0.9 $ 1.0 $ 2.8 $ 2.7
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.
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Notes to the Condensed Consolidated Financial Statements—(continued)
Note H. 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 )
Other comprehensive income (loss) before reclassifications ( 3.0 ) ( 3.6 ) — ( 6.6 )
Income tax effects before reclassifications 0.4 0.5 — 0.9
Amounts reclassified from AOCI — 0.2 — 0.2
Income tax effects on reclassifications — ( 0.1 ) — ( 0.1 )
Currency translation AOCI — 1.0 ( 0.1 ) 0.9
Balance at June 30, 2025 ( 79.4 ) 7.3 ( 1.5 ) ( 73.6 )
Other comprehensive income (loss) before reclassifications ( 1.1 ) 0.9 — ( 0.2 )
Income tax effects before reclassifications — ( 0.2 ) — ( 0.2 )
Amounts reclassified from AOCI — ( 0.3 ) — ( 0.3 )
Income tax effects on reclassifications — 0.1 — 0.1
Currency translation AOCI — 0.3 — 0.3
Balance at September 30, 2025 $ ( 80.5 ) $ 8.1 $ ( 1.5 ) $ ( 73.9 )
Balance at January 1, 2024 $ ( 55.1 ) $ 16.1 $ ( 0.9 ) $ ( 39.9 )
Other comprehensive income (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 )
Other comprehensive income/(loss) before reclassifications ( 7.8 ) ( 1.4 ) — ( 9.2 )
Income tax effects before reclassifications ( 0.5 ) 0.5 0.1 0.1
Amounts reclassified from AOCI — 0.4 — 0.4
Income tax effects on reclassifications — ( 0.2 ) — ( 0.2 )
Currency translation AOCI — ( 0.5 ) — ( 0.5 )
Balance at June 30, 2024 ( 69.8 ) 14.4 ( 0.7 ) ( 56.1 )
Other comprehensive income (loss) before reclassifications 3.2 ( 5.7 ) — ( 2.5 )
Income tax effects before reclassifications 0.1 1.7 — 1.8
Amounts reclassified from AOCI — ( 0.9 ) — ( 0.9 )
Income tax effects on reclassifications — 0.3 — 0.3
Currency translation AOCI — 1.4 — 1.4
Balance at September 30, 2024 $ ( 66.5 ) $ 11.2 $ ( 0.7 ) $ ( 56.0 )
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Notes to the Condensed Consolidated Financial Statements—(continued)
Note I. Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing Net income (loss) attributable to Orion by the weighted average number of common stock outstanding during the period. Diluted EPS equals Net income (loss) 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 September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions, except share and per share data)
Net income (loss) attributable to ordinary equity holders $ ( 67.1 ) $ ( 20.2 ) $ ( 49.0 ) $ 27.0
Weighted average number of Common stock (in thousands) 56,046 58,191 56,415 58,406
Basic Earnings (loss) per share $ ( 1.20 ) $ ( 0.35 ) $ ( 0.87 ) $ 0.46
Dilutive effect of share based payments (in thousands) 203 547 248 536
Weighted average number of diluted Common stock (in thousands) 56,249 58,738 56,663 58,942
Diluted Earnings (loss) per share $ ( 1.20 ) $ ( 0.35 ) $ ( 0.87 ) $ 0.46
Note J. 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.
Income tax benefit for the three months ended September 30, 2025 and 2024 was $ 0.5 million and $ 10.8 million, respectively.
Income tax expense for the nine months ended September 30, 2025 and 2024 was $ 13.0 million and $ 11.8 million, respectively.
Our effective income tax rates were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Effective income tax rates 0.7 % 34.6 % ( 34.6 ) % 30.8 %
The change in our effective tax rate for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024 was primarily driven by valuation allowances for tax losses and a non-tax deductible loss in connection with the goodwill impairment.
Note K. 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.
Loss (recovery) due to misappropriation of assets, net —In the third quarter of 2024 we recognized a one-time pre-tax charge of approximately $ 59.2 million for the unrecovered fraudulently induced wire transfers. In addition, we incurred $ 1.5 million of professional fees in connection with our investigations. Together, the amount of $ 60.7 million is reported in Loss due to misappropriation of assets, net in our Condensed Consolidated Statements of Operations. We recognized $ 18.2 million of tax benefit related to Loss due to
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Notes to the Condensed Consolidated Financial Statements—(continued)
misappropriation of assets, net.
Refer to Note Q. Commitments and Contingencies in our Annual Report in Form 10-K for the year ended December 31, 2024 for further
discussion.
In the third quarter of 2025, we recovered $ 7.3 million (€ 6.3 million). In 2025, we incurred $ 0.8 million of professional fees. This recovery, net of legal fee, is reported in Loss (recovery) due to misappropriation of assets, net in our Condensed Consolidated Statements of Operations.
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 September 30, 2025, the Company had guarantees totaling $ 37.8 million issued by various financial institutions.
Note L. 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.
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Notes to the Condensed Consolidated Financial Statements—(continued)
Segment operating results for the three months ended September 30, 2025 and 2024 are as follows:
Rubber Specialty Corporate Total
(In millions)
2025
Net sales from external customers $ 290.9 $ 160.0 $ — $ 450.9
Less:
Cost of Sales 237.9 127.4 — 365.3
Selling, general and administrative expenses 34.1 23.2 0.2 57.5
Loss (recovery) due to misappropriation of assets, net
— — ( 7.3 ) ( 7.3 )
Goodwill impairment 32.3 48.5 — 80.8
Other segment items 4.2 4.1 — 8.3
Add:
Equity in earnings of affiliated companies, net of tax 0.5 — — 0.5
LTIP and other non-operating charges 1.8 1.7 0.2 3.7
Loss (recovery) due to misappropriation of assets, net
— — ( 7.3 ) ( 7.3 )
Goodwill impairment 32.3 48.5 — 80.8
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 19.1 14.6 — 33.7
Adjusted EBITDA $ 36.1 $ 21.6 $ — $ 57.7
Capital expenditures 15.5 25.4 — 40.9
2024
Net sales from external customers $ 300.9 $ 162.5 $ — $ 463.4
Less:
Cost of Sales 230.0 125.9 — 355.9
Selling, general and administrative expenses 35.9 21.7 0.3 57.9
Loss (recovery) due to misappropriation of assets, net
— — 60.7 60.7
Other segment items 2.2 3.1 ( 1.1 ) 4.2
Add:
Equity in earnings of affiliated companies, net of tax 0.2 — — 0.2
LTIP and other non-operating charges 1.6 2.9 ( 0.8 ) 3.7
Loss (recovery) due to misappropriation of assets, net — — 60.7 60.7
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 18.3 12.5 — 30.8
Adjusted EBITDA $ 52.9 $ 27.2 $ — $ 80.1
Capital expenditures 23.7 24.2 — 47.9
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Notes to the Condensed Consolidated Financial Statements—(continued)
Segment operating results for the nine months ended September 30, 2025 and 2024 are as follows:
Rubber Specialty Corporate Total
(In millions)
2025
Net sales from external customers $ 916.2 $ 478.8 $ — $ 1,395.0
Less:
Cost of Sales 739.3 373.6 — 1,112.9
Selling, general and administrative expenses 104.4 68.4 0.8 173.6
Loss (recovery) due to misappropriation of assets, net
— — ( 6.5 ) ( 6.5 )
Goodwill impairment 32.3 48.5 — 80.8
Other segment items 12.1 12.5 — 24.6
Add:
Equity in earnings of affiliated companies, net of tax 1.6 — — 1.6
LTIP and other non-operating charges 4.6 4.6 0.8 10.0
Loss (recovery) due to misappropriation of assets, net
— — ( 6.5 ) ( 6.5 )
Goodwill impairment 32.3 48.5 — 80.8
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 59.2 38.0 — 97.2
Adjusted EBITDA $ 125.8 $ 66.9 $ — $ 192.7
Assets $ 1,109.9 $ 701.6 $ 152.4 $ 1,963.9
Capital expenditures 46.4 65.9 — 112.3
2024
Net sales from external customers $ 944.4 $ 498.9 $ — $ 1,443.3
Less:
Cost of Sales 722.7 381.1 — 1,103.8
Selling, general and administrative expenses 113.5 65.5 0.7 179.7
Loss (recovery) due to misappropriation of assets, net
— — 60.7 60.7
Other segment items 9.7 11.4 ( 1.1 ) 20.0
Add:
Equity in earnings of affiliated companies, net of tax 0.5 — — 0.5
LTIP and other non-operating charges 5.3 5.3 ( 0.4 ) 10.2
Loss (recovery) due to misappropriation of assets, net — — 60.7 60.7
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 53.1 36.9 — 90.0
Adjusted EBITDA $ 157.4 $ 83.1 $ — $ 240.5
Assets $ 1,101.5 $ 730.5 $ 164.3 $ 1,996.3
Capital expenditures 68.2 67.5 — 135.7
Other segment items —Other segment items for each reportable segment includes Research and Development costs and Other expense (income), net.
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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 September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions)
Income (loss) before earnings in affiliated companies and income taxes $ ( 68.1 ) $ ( 31.2 ) $ ( 37.6 ) $ 38.3
LTIP and other non-operating charges 3.7 3.7 10.0 10.2
Depreciation and amortization of intangible assets, right of use assets, and property, plant and equipment 33.7 30.8 97.2 90.0
Loss (recovery) due to misappropriation of assets, net
Misappropriation of assets, net ( 7.3 ) 59.2 ( 7.3 ) 59.2
Professional fees related to misappropriation of assets — 1.5 0.8 1.5
Goodwill impairment 80.8 — 80.8 —
Equity in earnings of affiliated companies, net of tax 0.5 0.2 1.6 0.5
Interest and other financial expense, net 14.4 15.9 47.2 40.8
Adjusted EBITDA $ 57.7 $ 80.1 $ 192.7 $ 240.5
LTIP and other non-operating charges include the following:
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
(In millions)
Long term incentive plan $ 3.7 $ 4.8 $ 10.0 $ 11.3
Other non-operating — ( 1.1 ) — ( 1.1 )
LTIP and other non-operating charges $ 3.7 $ 3.7 $ 10.0 $ 10.2
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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.