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Item 7. Management’s Discussion and Analysis

2026-02-17 compared with 2025-02-20 · 128 added, 129 removed, 139 unchanged (65% of the section changed)

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Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Annual Report in Form 10-K filed with the United States Securities and Exchange Commission (“SEC”) on February 19, 2025 (the “ Prior Annual Report ”).

In 2024, our net sales were $1,877.5 million, sales volume was 934.8 kmt, net income was $44.2 million, and Adjusted EBITDA was $302.2 million.

• Specialty Carbon Black Segment —Adjusted EBITDA was $108.1 million.

This segment accounted for 34.4% of our total revenue, 35.8% of total Adjusted EBITDA and 26.3% of our total volume in kmt in 2024.

• Rubber Carbon Black Segment —Adjusted EBITDA was $194.1 million.

This segment accounted for 65.6% of our total revenue, 64.2% of total Adjusted EBITDA and 73.7% of our total volume in kmt in 2024.

Key Factors Affecting Our Results of Operations

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Risk Factors ” and “ Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 ” elsewhere in this Annual Report.

Recent Developments and Certain Known Trends

General Economic Conditions, Cyclicality and Seasonality

Throughout 2024, Rubber Carbon Black markets faced headwinds from soft global demand, capacity additions and economic uncertainty.

Higher tire imports in the U.S.

and Europe also adversely impacted our Rubber Carbon Black segment.

In contrast, Specialty Carbon Black segment benefited from demand recovery.

In 2024, our Net income was $44.2 million.

A criminal scheme that resulted in multiple fraudulently-induced outbound wire transfers to accounts controlled by unknown third parties aggregating to $42.9 million, net of $16.4 million of tax benefit, also adversely impacted our net income.

Adjusted EBITDA of $302.2 million was lower compared to 2023, primarily due to demand softening in the Rubber Carbon Black segment, higher fixed costs and lower cogeneration.

However, improved demand for Specialty Carbon Black products, across all regions, positively impacted our Adjusted EBITDA.

Availability of, and volatility in the prices for various carbon black feedstocks including those that are oil based, can be influenced by a variety of geopolitical considerations, for example, government policy on climate change, the ongoing Russian-Ukraine war, the Middle-East conflicts, and the incoming U.S.

administration’s energy policy in the United States, among others.

While it is reasonable to expect continued volatility in the global energy-related commodity markets, we have worked to mitigate risks associated with such volatility by incorporating the aforementioned raw material cost pass-through provisions in our supply agreements when possible, and by qualifying multiple sources of feedstocks and energy sources for our manufacturing operations.

Depending upon how the tariff measures unfold as discussed in Item 1A.

Risk Factors, increased imports may impact our future operating and financial results.

Reconciliation of Non-GAAP Financial Measures

We present certain financial measures that are not prepared in accordance with GAAP or the accounting standards of any other jurisdiction and may not be comparable to other similarly titled measures of other companies.

For a reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures, see section Reconciliation of Non-GAAP Financial Measures below.

These non-GAAP measures include, but are not limited to, Adjusted EBITDA, Net Working Capital and Capital Expenditures.

• Adjusted EBITDA —Income from operations before depreciation and amortization, stock-based compensation, and non-recurring items (such as, restructuring expenses, Loss due to misappropriation of assets, net, etc.) plus Earnings in affiliated companies, net of tax.

• Net Working Capital —Inventories, net plus Accounts receivable, net minus Accounts payable.

• Capital Expenditures —Cash paid for the acquisition of property, plant and equipment.

Our operations are managed by senior executives who report to our Chief Executive Officer (“CEO”), the chief operating decision maker (“CODM”).

Adjusted EBITDA is used by CODM to evaluate our operating performance and to make decisions regarding allocation of capital, because it excludes the effects of items that have less bearing on the performance of our underlying core business.

We use this measure, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing our business.

We believe these measures are useful measures of financial performance in addition to Net income, Income from operations and other profitability measures under GAAP, because they facilitate operating performance comparisons from period to period.

By eliminating potential differences in results of operations between periods caused by factors such as depreciation and amortization, historic cost and age of assets, financing and capital structures and taxation positions or regimes, we believe that Adjusted EBITDA provides a useful additional basis for evaluating and comparing the current performance of the underlying operations.

In addition, we believe these non-GAAP measures aid investors by providing additional insight into our operational performance and help clarify trends affecting our business.

However, other companies and analysts may calculate non-GAAP financial measures differently, so making comparisons among companies on this basis should be done carefully.

Non-GAAP measures are not performance measures under GAAP and should not be considered in isolation or construed as substitutes for Net sales, Net income, Income from operations, Gross profit and other GAAP measures as an indicator of our operations in accordance with GAAP.

Operating Result s

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Research and development costs 27.5 27.1 0.4 1.5%

Loss due to misappropriation of assets, net 59.3 — 59.3 —%

Loss (recovery) due to misappropriation of assets, net (6.9) 59.3 (66.2) (111.6)%

Goodwill impairment 80.8 — 80.8 —%

Other expense (income), net 0.2 1.9 (1.7) (89.5)%

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Interest and other financial expense, net 62.3 49.4 12.9 26.1%

Reclassification of actuarial gains from AOCI — (8.9) 8.9 (100.0)%

Income before earnings in affiliated companies and income taxes 53.3 163.3 (110.0) (67.4)%

Income (loss) before earnings in affiliated companies and income taxes (34.8) 53.3 (88.1) (165.3)%

Income tax expense 35.8 9.7 26.1 269.1%

Earnings in affiliated companies, net of tax 0.5 0.6 (0.1) (16.7)%

Net income $ 44.2 $ 103.5 $ (59.3) (57.3)%

Other comprehensive income (loss), net of tax

Net income (loss) (70.1) 44.2 (114.3) (258.6)%

Other comprehensive loss, net of tax

Foreign currency translation adjustments (4.5) (24.3) 19.8 (81.5)%

Net gains (losses) on derivatives (5.3) (8.3) 3.0 (36.1)%

Net losses on derivatives (3.2) (5.3) 2.1 (39.6)%

Defined benefit plans, net 5.3 (0.4) 5.7 (1425.0)%

Other comprehensive income (loss) (30.0) (27.4) (2.6) 9.5%

Comprehensive income $ 14.2 $ 76.1 $ (61.9) (81.3)%

Other comprehensive loss (2.4) (30.0) 27.6 (92.0)%

Comprehensive income (loss) $ (72.5) $ 14.2 $ (86.7) (610.6)%

Volume increased marginally by 13.8 kmt, or 1.5%, year-over-year to 948.6 kmt, primarily due to higher Rubber Carbon Black segment volume, partially offset by lower Specialty Carbon Black segment volume .

Net sales decreased by $70.8 million, or 3.8%, from $1,877.5 million in 2024 to $1,806.7 million in 2025, driven primarily by the pass-through effect of lower oil prices, partially offset by higher volume in the Rubber Carbon Black segment and a favorable foreign exchange rate impact.

Cost of sales

Cost of sales decreased marginally by $1.8 million, or 0.1%, from $1,448.7 million in 2024 to $1,446.9 million in 2025.

Gross profit decreased by $69.0 million or 16.1%, from $428.8 million in 2024 to $359.8 million in 2025.

The decrease was primarily driven by unfavorable product and regional mix, contractual price and unfavorable timing from the pass-through effect of raw material costs.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by $7.1 million, or 3.0%, from $237.8 million in 2024 to $230.7 million in 2025 driven primarily by impact of cost saving measures initiated by us and lower distribution costs.

Those were partially offset by unfavorable foreign exchange rate impact.

Loss (recovery) due to misappropriation of assets, net

During the third quarter of 2024, we were the target of a criminal scheme that resulted in multiple fraudulently induced outbound wire transfers to accounts controlled by unknown third parties aggregating to $55.7 million, net of recoveries.

In addition, we incurred $3.6 million of professional fees in connection with our investigations.

During 2025, we recovered $9.2 million (€7.9 million) and incurred $2.3 million of professional fees, which was reported in Loss (recovery) due to misappropriation of assets, net in our Consolidated Statements of Operations.

For more information, refer to Note Q.

Commitments and Contingencies to the Consolidated Financial Statements.

Goodwill impairment

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.

We performed quantitative impairment assessments for each of our two reporting units as of September 30, 2025.

Based on our quantitative assessments, we recognized a non-cash goodwill impairment charge of $80.8 million, which impaired all of our existing goodwill.

For more information, refer to Note H.

Goodwill and Intangible Assets to the Consolidated Financial Statements.

Income tax expense

Income tax expense was $35.8 million and $9.7 million in 2025 and 2024, respectively.

The 2025 effective income tax rate was (104.4)% compared with 18.0% in 2024.

The increase in the effective tax rate was mainly driven by the negative tax effects from the goodwill impairment and valuation allowances.

Those were partially offset by US tax refunds and tax-free income.

The 2025 effective tax rate was particularly impacted by:

• the $18.5 million tax effect from the non-tax deductible goodwill impairment charge, and

• valuation allowances of $10.6 million.

For further details, see Note P.

Income Taxes in Item 8.

Financial Statements and Supplementary Data, to the accompanying Consolidated Financial Statements.

Comprehensive income (loss)

2025 vs 2024 ―Comprehensive income (loss) decreased by $86.7 million, from Comprehensive income of $14.2 million to Comprehensive loss of $72.5 million, primarily due to a decrease in Net income.

The activities from the remaining components of Comprehensive income are discussed below.

• $19.8 million favorable foreign currency translation adjustments due to weakening of U.S.

dollar versus euro,

• $5.7 million related to net favorable fair value changes in defined pension and other post-retirement benefits and

• $2.1 million related to net favorable impacts related to financial derivative instruments primarily driven by net periodic changes in cross currency swaps.

General Economic Conditions, Cyclicality and Seasonality

We believe carbon black feedstock and production costs are or may be influenced by a variety of geopolitical developments and macroeconomic considerations, including but not limited to the current U.S.

administration’s evolving tariff policy, the European Union’s (“EU”) climate policies, the result of the EU’s anti-dumping investigation into Chinese tire imports, market prices of carbon emission certificates (“CO 2 ”) in the EU, and the ongoing Russian-Ukraine war.

To mitigate energy-related cost volatility risks, we have incorporated, where possible, raw material and regulatory cost pass-through provisions in our supply agreements, and we are continually focused on diversifying our global feedstocks sources.

Revolving credit facility —In February 2026, we entered into the Fifteenth Amendment to the Credit Agreement, which amended and restated our revolving credit facility (the “RCF”).

Debt and Other Obligations to our accompanying Consolidated Financial Statements for further discussion.

Non-GAAP Financial Measures

For a reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures, see section Reconciliation of Non-GAAP Financial Measures below.

These non-GAAP measures include, but are not limited to, Adjusted EBITDA, Net Working Capital and Capital Expenditures.

• EBITDA —Income from operations before depreciation and amortization.

• Adjusted EBITDA —Income from operations before depreciation and amortization, stock-based compensation, and non-recurring items (such as, restructuring expenses, Loss (recovery) due to misappropriation of assets, net, Goodwill impairment, etc.) plus Earnings in affiliated companies, net of tax.

• Segment Gross Profit —Segment Net sales minus segment Cost of sales.

• Net Working Capital —Inventories, net plus Accounts receivable, net minus Accounts payable.

• Capital Expenditures —Cash paid for the acquisition of property, plant and equipment.

• Free Cash Flow— Net cash provided by operating activities less Net cash used in investing activities.

Our operations are managed by senior executives who report to our Chief Executive Officer (“CEO”), the C hief Operating Decision Maker (“CODM”).

We use this measure, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing our business.

We believe these measures are useful metrics of financial performance in addition to Net income, Income from operations and other profitability measures under GAAP, because they facilitate operating performance comparisons from period to period.

In addition, we believe these non-GAAP measures aid investors by providing additional insight into our operational performance and help clarify trends affecting our business.

However, other companies and analysts may calculate non-GAAP financial measures differently, so making comparisons among companies on this basis should be done carefully.

Reconciliation of Non-GAAP Financial Measures

The following tables present a reconciliation of each Non-GAAP measure to the most directly comparable GAAP measure:

Reconciliation of Net income to Adjusted EBITDA (A Non-GAAP financial Measure)

The following table presents a Reconciliation of Net income (loss) to Adjusted EBITDA :

Year Ended December 31, Year-Over-Year

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(In millions) %

Net income $ 44.2 $ 103.5 $ (59.3) (57.3) %

Add back Income tax (benefit) expense 9.7 60.3 (50.6) (83.9) %

Net income (loss) $ (70.1) $ 44.2 $ (114.3) (258.6) %

Add back Income tax expense 35.8 9.7 26.1 269.1 %

Add back Equity in earnings of affiliated companies, net of tax (0.5) (0.6) 0.1 (16.7) %

Income before earnings in affiliated companies and income taxes 53.3 163.3 (110.0) (67.4) %

Income (loss) before earnings in affiliated companies and income taxes (34.8) 53.3 (88.1) (165.3) %

Add back Interest and other financial expense, net 62.3 49.4 12.9 26.1 %

Add back Reclassification of actuarial gain from AOCI — (8.9) 8.9 — %

Income from operations 27.5 102.7 (75.2) (73.2) %

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Equity in earnings of affiliated companies, net of tax 0.5 0.6 (0.1) (16.7) %

Loss due to misappropriation of assets, net

Loss (recovery) due to misappropriation of assets, net

Misappropriation of assets, net (9.2) 55.7 (64.9) (116.5) %

Professional fees related to misappropriation of assets 2.3 3.6 (1.3) (36.1) %

Goodwill impairment 80.8 — 80.8 — %

Long term incentive plan 13.6 15.3 (1.7) (11.1) %

Environmental reserves — (2.2) 2.2 (100.0) %

Other adjustments 0.6 (1.0) 1.6 (160.0) %

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$ 154.5 $ 194.1 $ (39.6) (20.4) %

Volume increased marginally by 2.7 kmt, or 0.3%, to 934.8 kmt, year-over-year, primarily due to higher Specialty Carbon Black segment volume, partially offset by lower Rubber Carbon Black segment volume .

Net sales decreased marginally by $16.4 million, or 0.9%, from $1,893.9 million in 2023 to $1,877.5 million in 2024, driven primarily by pass-through effect of lower oil prices, lower Rubber Carbon Black segment volume and unfavorable foreign currency translation impact, partially offset by broad-based recovery in the Specialty Carbon Black segment across all regions.

Cost of sales

Cost of sales increased marginally by $5.8 million, or 0.4%, from $1,442.9 million in 2023 to $1,448.7 million in 2024, primarily to associated costs of higher Specialty Carbon Black segment volume and higher fixed costs.

Gross profit decreased by $22.2 million or 4.9%, from $451.0 million in 2023 to $428.8 million in 2024.

The decrease was primarily driven by higher fixed costs, unfavorable impact from pass-through of raw material costs and lower cogeneration.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $15.9 million, or 7.2%, from $221.9 million in 2023 to $237.8 million in 2024 driven primarily by higher freight and personnel costs.

Loss due to misappropriation of assets, net

In addition, we incurred $3.6

million of professional fees in connection with our investigations.

For more information, refer to Note Q.

Commitments and Contingencies to the Condensed Consolidated Financial Statements.

Income tax expense

Income tax expense was $9.7 million and $60.3 million in 2024 and 2023, respectively.

The 2024 effective income tax rate was 18.0% compared with 36.9% in 2023.

The decrease in the effective tax rate was mainly due to the release of uncertain tax positions and impacts from changes in U.S.

international tax laws.

Those were partially offset by the effects of valuation allowances on tax losses and nondeductible expenses.

We recognized $16.4 million of tax benefit related to Loss due to misappropriation of assets, net.

For further discussion refer to Note Q.

Commitments and Contingencies to the Condensed Consolidated Financial Statements.

The 2024 effective tax rate was particularly impacted by:

• the release of uncertain tax positions of $13.3 million and associated interest, and

• benefits from the changes in U.S.

international laws of $9.6 million.

For further details, see Note P.

Income Taxes in Item 8.

Financial Statements and Supplementary Data, to the audited Consolidated Financial Statements.

Adjusted EBITDA (A Non-GAAP Financial Measure)

Adjusted EBITDA decreased by $54.2 million, or 17.9%, from $302.2 million in 2024 to $248.0 million in 2025.

The decrease was primarily due to higher selling, general and administrative expenses, lower Rubber Carbon Black segment volume and lower cogeneration.

Those were partially offset by higher volume in the Specialty Carbon Black segment.

Comprehensive Income

2024 vs 2023 ―Comprehensive income decreased by $61.9 million, from $76.1 million to $14.2 million, primarily due to a decrease in net income.

The activities from the remaining components of Comprehensive income are discussed below.

• $16.7 million unfavorable foreign currency translation adjustments due to U.S.

dollar versus euro.

Those decreases were partially offset by:

• $11.1 million related to net favorable changes in defined pension and other post-retirement benefits, and

• $3.0 million related to net favorable impacts related to financial derivative instruments primarily driven by net periodic changes in cross currency swaps.

The decrease was primarily due to lower volume in the Specialty Carbon Black segment, unfavorable customer and regional mix in the Rubber Carbon Black segment and unfavorable timing from the pass-through effect of raw material costs.

Segment Discussion

Our business operations are divided into two operating segments—Specialty Carbon Black and Rubber Carbon Black.

Our business operations are managed through two operating segments—Specialty Carbon Black and Rubber Carbon Black.

We use Segment Adjusted EBITDA as a measure of segment performance and profitability.

The table below presents our segment results for 2024 and 2023.

In 2025, our Rubber Carbon Black (“RCB”) reporting segment experienced softer demand in core Western markets, as key tire making customers reduced production rates because they were impacted by elevated levels of typically low value tire imports from Asia.

Our Specialty Carbon Black segment results, including demand and mix, were impacted by persistently soft global industrial economies, coupled with broad uncertainty related to global trade, tariffs and regulatory matters.

In 2025, our net sales were $1,806.7 million, sales volume was 948.6 kmt, net loss was $70.1 million, and Adjusted EBITDA was $248.0 million.

• Specialty Carbon Black Segment —Adjusted EBITDA was $93.5 million.

This segment accounted for 34.2% of our total revenue, 37.7% of total Adjusted EBITDA and 24.6% of our total volume in 2025.

• Rubber Carbon Black Segment —Adjusted EBITDA was $154.5 million.

This segment accounted for 65.8% of our total revenue, 62.3% of total Adjusted EBITDA and 75.4% of our total volume in 2025.

Specialty Carbon Black

Year Ended December 31, Year-Over-Year

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(In millions, unless otherwise indicated) %

Specialty Carbon Black

Volume (kmt) 233.8 245.8 (12.0) (4.9) %

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Adjusted EBITDA $ 93.5 $ 108.1 $ (14.6) (13.5) %

Specialty Carbon Black segment volume decreased by 12.0 kmt, or 4.9%, from 245.8 kmt in 2024 to 233.8 kmt in 2025, primarily driven by lower demand across all regions.

Net sales of the Specialty Carbon Black segment decreased by $27.8 million, or 4.3%, from $646.3 million in 2024 to $618.5 million in 2025.

The net sales decrease in 2025 was primarily due to the pass-through effect of lower oil prices and lower volume, partially offset by a favorable foreign exchange rate impact.

Gross profit of the Specialty Carbon Black segment decreased by $11.1 million, or 7.3%, from $151.9 million in 2024 to $140.8 million in 2025.

Adjusted EBITDA of the Specialty Carbon Black segment decreased by $14.6 million, or 13.5%, from $108.1 million in 2024 to $93.5 million in 2025.

The decrease was primarily due to lower demand across all regions, partially offset by favorable product mix.

Rubber Carbon Black

Year Ended December 31, Year-Over-Year

2025 2024 Delta

(In millions, unless otherwise indicated) %

Volume (kmt) 714.8 689.0 25.8 3.7 %

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Adjusted EBITDA $ 154.5 $ 194.1 $ (39.6) (20.4) %

Specialty Carbon Black

2024 Compared to 2023

Specialty Carbon Black segment volume increased by 24.4 kmt, or 11.0%, from 221.4 kmt in 2023 to 245.8 kmt in 2024, primarily due to demand recovery across all regions and end markets.

Net sales of the Specialty Carbon Black segment increased by $35.7 million, or 5.8%, from $610.6 million in 2023 to $646.3 million in 2024.

The net sales increase in 2024 was primarily due to higher volume across all regions, partially offset by unfavorable product mix and unfavorable foreign currency translation impact.

Gross profit of the Specialty Carbon Black segment decreased by $8.4 million, or 5.2%, from $160.3 million in 2023 to $151.9 million in 2024, primarily driven by higher fixed costs and lower cogeneration, partially offset by higher volume.

Adjusted EBITDA of the Specialty Carbon Black segment decreased by $2.6 million, or 2.3%, from $110.7 million in 2023 to $108.1 million in 2024.

The decrease was primarily due to higher fixed costs and lower cogeneration.

Those were partially offset by higher volume.

Rubber Carbon Black

2024 Compared to 2023

Volume of the Rubber Carbon Black segment decreased by 21.7 kmt, or 3.1%, from 710.7 kmt in 2023 to 689.0 kmt in 2024.

The decrease was primarily due to lower demand in the Americas region.

Volume of the Rubber Carbon Black segment increased by 25.8 kmt, or 3.7%, from 689.0 kmt in 2024 to 714.8 kmt in 2025.

The increase was primarily due to higher demand in the Americas and Asia Pacific regions, partially offset by lower demand in Europe, Middle East and Africa region.

Net sales of the Rubber Carbon Black segment decreased by $43.0 million, or 3.5%, from $1,231.2 million in 2024 to $1,188.2 million in 2025.

The decrease was primarily due to lower volume and the pass-through effect of lower oil prices, partially offset by favorable price.

The decrease was primarily due to the pass-through effect of lower oil prices, partially offset by higher volume and a favorable foreign exchange rate impact.

Gross profit of the Rubber Carbon Black segment decreased by $57.9 million, or 20.9%, from $276.9 million in 2024 to $219.0 million in 2025.

The decrease in the period was primarily driven by lower volume and lower cogeneration, partially offset by favorable price.

The decrease was primarily driven by the pass-through effect of lower oil prices and unfavorable price and regional customer mix, partially offset by higher volume.

Adjusted EBITDA of the Rubber Carbon Black segment decreased by $39.6 million, or 20.4%, from $194.1 million in 2024 to $154.5 million in 2025.

The decrease was primarily due to lower volume in Americas region, lower cogeneration and higher fixed costs.

Those were partially offset by favorable price.

The decrease was primarily due to unfavorable customer and regional mix as well as the unfavorable impact from the pass-through effect of raw material costs.

Those were partially offset by higher volume.

Liquidity and Capital Resources

Historical Cash Flows

The table below presents cash flows derived from our Consolidated Financial Statements.

Sources of Liquidity

Our principal sources of liquidity are the net cash generated (i) from operating activities, primarily driven by our operating results and changes in working capital requirements and (ii) from financing activities, primarily driven by borrowing amounts available under our RCF and related ancillary facilities, uncommitted local credit lines and, from time to time, term loan borrowings and Accounts receivable factoring.

We believe our anticipated future operating cash flow, the capacity under our existing credit facilities, along with access to surety bonds, will be sufficient to finance our planned capital expenditures, settle our commitments and contingencies and address our normal anticipated working capital needs for the foreseeable future.

As of December 31, 2025, the Company had liquidity of $253.7 million, including cash and equivalents of $60.7 million and $193.0 million in availability remaining under our committed RCF, including ancillary lines.

Cash and cash equivalents increased $9.4 million to $60.7 million as of December 31, 2025 compared to December 31, 2024.

The table below presents cash flows and Free Cash Flow derived from our Consolidated Financial Statements.

Year Ended December 31,

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3 Net cash provided by (used in) financing activities (41.2) 89.3

Free Cash Flow (1) (1-2)

(1) Free Cash Flow is a non-GAAP financial measure, and other companies may use a similarly titled financial measure that is calculated differently from the way we calculate Free Cash Flow.

Operating Activities— Cash provided by operating activities primarily reflected our Net income, adjusted for non-cash items and changes in working capital.

The $55.7 million Loss due to misappropriation of assets, net of recoveries, $3.6 million of related professional fees and $16.4 million associated tax benefit are also included in cash provided by operating activities.

Net cash provided by operating activities in 2025 included $6.9 million partial recovery related to 2024 loss due to misappropriation of assets, net.

Investing Activities— Cash used by investing activities amounted to $161.0 million.

The expenditures were primarily related to maintenance and growth investments, including $66.9 million related to construction of the facility in La Porte, Texas.

Financing Activities— Net cash provided by financing activities was $89.3 million.

These inflows primarily consisted of $68.2 million, net borrowings under our ancillary credit facilities and $48.0 million related to other short-term debt borrowings.

Those were partially offset by scheduled debt repayments, dividend distributions and repurchase of shares of Common stock.

Financing Activities— Net cash used in financing activities was $41.2 million.

These outflows primarily consisted of $24.8 million repurchases of our Common stock, $8.9 million of scheduled debt repayments, $4.7 million dividend distributions and $4.6 million related to cash paid for refinancing our RCF.

Debt and Other Obligations to the accompanying Consolidated Financial Statements for further information regarding the Company’s indebtedness.

Sources of Liquidity

Our principal sources of liquidity are the net cash generated (i) from operating activities, primarily driven by our operating results and changes in working capital requirements and (ii) from financing activities, primarily driven by borrowing amounts available under our committed multicurrency, senior secured Revolving credit facility and related ancillary facilities, uncommitted local credit lines and, from time to time, term loan borrowings and Accounts receivable factoring.

We believe our anticipated future operating cash flow, the capacity under our existing credit facilities and uncommitted bilateral lines of credit, along with access to surety bonds, will be sufficient to finance our planned capital expenditures, settle our commitments and contingencies and address our normal anticipated working capital needs for the foreseeable future.

As of December 31, 2024, the Company had liquidity of $201.6 million, including cash and equivalents of $44.2 million, $127.5 million in availability remaining under our revolving credit facility, including ancillary lines and $29.9 million under other available credit lines.

Net Working Capital (A Non-GAAP Financial Measure)

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Accounts payable (197.0) (156.2)

$ 346.1 $ 344.4

Net working capital $ 293.9 $ 346.1

Our Net Working Capital position can vary significantly due to fluctuations in oil prices and receipts of carbon black oil shipments.

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Conversely, decreases in the cost of raw materials lead to a decrease in our Net Working Capital requirements over the same period of time.

Our Net Working Capital increased to $346.1 million as of December 31, 2024 compared to $344.4 million as of December 31, 2023.

Our Net Working Capital decreased to $293.9 million as of December 31, 2025 compared to $346.1 million as of December 31, 2024.

The primary working capital change drivers, year over year, were as follows:

• Accounts receivable, net —Improved payment terms and the factoring of certain Accounts receivable reduced this balance.

• Inventory —Decrease in inventory was primarily due to year-end destocking activity, and

• Accounts payable —Increase in accounts payable was primarily due to timing of payments.

Those were partially offset by:

• Accounts receivable, net —Change in working capital includes $456.3 million sale of certain Accounts receivables, discussed in Note C.

Accounts Receivable to the accompanying Consolidated Financial Statements for further information on the factoring agreement.

This was partially offset by:

• Accounts payable —Decrease in accounts payable was primarily due to timing of payments and lower production.

Capital Requirements

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We plan to finance our capital expenditures with cash generated by our operating activities and or utilizing existing debt capacity.

We currently do not have material commitments to make capital expenditures except for the under-construction facility at La Porte, Texas.

We do not plan to make any other capital expenditures outside the ordinary course of our business.

Debt and Other Obligations —Our gross debt balance as of December 31, 2024 was $908.7 million, an increase of $90.5 million compared to December 31, 2023.

In 2025 December, we adjusted the construction timeline of the La Porte facility to better reflect end market conditions, including a protracted domestic adoption rate of electric vehicles.

For further discussion refer to Note F.

Property, Plant and Equipment to the accompanying Consolidated Financial Statements.

Debt and Other Obligations —Our gross debt balance as of December 31, 2025 was $981.9 million, an increase of $73.2 million compared to December 31, 2024, primarily due to weakening of U.S.

dollar versus the euro.

In 2026, we will repay $16.1 million of long-term debt from cash in hand and cash generated by operating activities.

32 unchanged sentences

Our current provision for income taxes is impacted by the recognition and release of valuation allowances related to net deferred tax assets in certain jurisdictions.

Further changes to these valuation allowances may impact our future provision for income taxes, which will include no tax benefit with respect to losses incurred and no tax expense with respect to income generated in these countries until the respective valuation allowance is eliminated.

Further changes to these valuation allowances may impact our future provision for income taxes, which will include no tax benefit with respect to

losses incurred and no tax expense with respect to income generated in these countries until the respective valuation allowance is eliminated.

We recognize the financial statement benefits with respect to an uncertain income tax position that we have taken or may take on an income tax return when we believe it is more likely than not that the position will be sustained with the tax authorities.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis