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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-04 · 136 added, 196 removed, 140 unchanged (70% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three and nine months ended September 30, 2025 and 2024 and should be read in conjunction with the information included under Item 1.

The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three months ended March 31, 2026 and 2025 and should be read in conjunction with the information included under Item 1.

Financial Statements and Supplementary Data (Unaudited ) elsewhere in this report.

Results for the three month periods ended March 31, 2026 is not necessarily indicative of results that may be expected for the entire year.

We prepare our financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”).

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together with its consolidated subsidiaries (“Orion S.A.”).

PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION

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, EBITDA, Adjusted EBITDA, Segment Gross Profit, Net Working Capital and Capital Expenditures.

• EBITDA —Earnings before interest, taxes, depreciation and amortization.

• Adjusted EBITDA —Income from operations before depreciation and amortization, stock-based compensation, and non-recurring items (such as, restructuring expenses, legal settlement gain, net loss due to assets misappropriation, 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.

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 our 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.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Operating Results

The table below presents our historical results derived from our Condensed Consolidated Financial Statements for the periods indicated.

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Delta 2025 2024 Delta

(In millions, except volume) % (In millions, except volume) %

Operating results for the periods discussed as follows:

Three Months Ended March 31,

2026 2025 Delta

(In millions, except volume) %

Volume (in kmt) 256.5 251.7 4.8 1.9

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Research and development costs 7.3 6.6 0.7 10.6

Loss (recovery) due to misappropriation of assets, net (7.3) 60.7 (68.0) (112.0) (6.5) 60.7 (67.2) (110.7)

Goodwill impairment 80.8 — 80.8 — 80.8 — 80.8 —

Other (income) expenses, net 1.4 (2.8) 4.2 (150.0) 4.6 (0.1) 4.7 (4,700.0)

Income (loss) from operations (53.7) (15.3) (38.4) 251.0 9.6 79.1 (69.5) (87.9)

Other expenses, net 1.4 1.9 (0.5) (26.3)

Income from operations 11.4 31.2 (19.8) (63.5)

Interest and other financial expense, net 14.7 13.7 1.0 7.3

Income (loss) before earnings in affiliated companies and income taxes (3.3) 17.5 (20.8) (118.9)

Income tax expense (benefit) (0.5) (10.8) 10.3 (95.4) 13.0 11.8 1.2 10.2

Income tax expense 6.7 8.9 (2.2) (24.7)

Earnings in affiliated companies, net of tax 0.1 0.5 (0.4) (80.0)

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Defined benefit plans, net (0.1) (0.1) — —

Total other comprehensive (loss) income, net of tax (0.3) 0.1 (0.4) (400.0) (4.0) (16.1) 12.1 (75.2)

Total other comprehensive income, net of tax 5.2 1.0 4.2 420.0

Comprehensive income (loss) $ (4.7) $ 10.1 $ (14.8) (146.5)

Operating Results Discussion

For the three months ended March 31, 2026 compared to three months ended March 31, 2025

Volume for the three months ended March 31, 2026 increased by 4.8 kmt, year over year, to 256.5 kmt, primarily due to higher demand in Europe, Middle East and Africa (“EMEA”) and Asia Pacific (“APAC”) regions in both segments, partially offset by lower demand in the Americas.

Net sales for the three months ended March 31, 2026 decreased by $18.2 million, or 3.8%, year over year to $459.5 million, primarily due to the pass-through effect of lower year-over-year oil prices, as well as unfavorable price and product mix.

Those were partially offset by a favorable foreign exchange rate impact and higher volume in both segments.

Cost of sales

Cost of sales for the three months ended March 31, 2026 increased marginally by $0.7 million, or 0.2%, year over year to $380.3 million.

Gross profit for the three months ended March 31, 2026 decreased by $18.9 million, or 19.3%, year over year to $79.2 million.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

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

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended March 31, 2026 increased marginally by $0.7 million, or 1.2%, year over year to $59.1 million.

Provision for income taxes

For the three months ended March 31, 2026, we recognized a Loss before earnings in affiliated companies and income taxes of $3.3 million, compared to Income before earnings in affiliated companies and income taxes of $17.5 million for the three months ended March 31, 2025.

Income tax expense for the three months ended March 31, 2026 and 2025 were $6.7 million and $8.9 million, respectively.

Income tax expense is primarily determined based on projected pre-tax income mix in countries with varying statutory tax rates and valuation allowances on tax losses.

Comprehensive Income (loss) and Net Income (loss)

Comprehensive loss decreased in the first quarter of 2026 by $14.8 million year over year to $4.7 million.

The components of Comprehensive income (loss) are discussed below:

Net income decreased by $19.0 million in the first quarter of 2026 compared to the first quarter of 2025 as discussed above.

The activities from the components of Other Comprehensive income are discussed below:

• $1.0 million of net favorable impact due to change in foreign currency translation adjustments as a result of the weakening of the U.S.

dollar versus euro, and

• $3.2 million of net favorable impact related to financial derivative instruments, primarily driven by net periodic changes in cross currency and interest rate swaps.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

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, EBITDA, Adjusted EBITDA, Segment Gross Profit, Net Working Capital, Capital Expenditures and Free Cash Flow.

• EBITDA —Earnings before interest, taxes, depreciation and amortization.

• Adjusted EBITDA —Income from operations before depreciation and amortization, stock-based compensation, and non-recurring items (such as, restructuring expenses, legal settlement gain, loss (recovery) due to assets misappropriation, net, 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 chief 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.

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.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Reconciliation of Non-GAAP Financial Measures

The following table presents reconciliation of Net income (loss) to EBITDA and Adjusted EBITDA :

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Delta 2025 2024 Delta

(In millions) % (In millions) %

Three Months Ended March 31,

2026 2025 Delta

(In millions) %

Net income (loss) $ (9.9) $ 9.1 $ (19.0) (208.8)

Add back Income tax (benefit) expense (0.5) (10.8) 10.3 (95.4) 13.0 11.8 1.2 10.2

Add back Income tax expense 6.7 8.9 (2.2) (24.7)

Add back Equity in earnings of affiliated companies, net of tax (0.1) (0.5) 0.4 (80.0)

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Add back Interest and other financial expense, net 14.7 13.7 1.0 7.3

Income (loss) from operations (53.7) (15.3) (38.4) 251.0 9.6 79.1 (69.5) (87.9)

Income from operations 11.4 31.2 (19.8) (63.5)

Add back Depreciation of property, plant and equipment and amortization of intangible assets and right of use assets 32.7 31.5 1.2 3.8

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Equity in earnings of affiliated companies, net of tax 0.1 0.5 (0.4) (80.0)

Loss (recovery) due to misappropriation of assets, net

Misappropriation of assets, net (7.3) 59.2 (66.5) (112.3) (7.3) 59.2 (66.5) (112.3)

Professional fees related to misappropriation of assets — 1.5 (1.5) (100.0) 0.8 1.5 (0.7) (46.7)

Goodwill impairment 80.8 — 80.8 — 80.8 — 80.8 —

Long term incentive plan 1.4 2.7 (1.3) (48.1)

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$ 19.0 $ 40.8 $ (21.8) (53.4)

Operating Results Discussion

For the three months ended September 30, 2025 compared to three months ended September 30, 2024

Volume for the three months ended September 30, 2025 increased by 12.3 kmt, year over year, to 237.5 kmt, primarily due to higher shipments in both segments.

Net sales for the three months ended September 30, 2025 decreased by $12.5 million, or 2.7%, year over year to $450.9 million, primarily due to lower oil prices and unfavorable product mix.

Those were partially offset by higher volume and a favorable foreign exchange rate impact.

Cost of sales

Cost of sales for the three months ended September 30, 2025 increased by $9.4 million, or 2.6%, year over year to $365.3 million, primarily due to costs associated with higher volume and higher fixed costs.

Gross profit for the three months ended September 30, 2025 decreased by $21.9 million, or 20.4%, year over year to $85.6 million.

The decrease was driven primarily by unfavorable timing from the pass-through effect of raw material costs as well as unfavorable customer and regional mix in both segments.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended September 30, 2025 decreased by $0.4 million, or 0.7%, year over year to $57.5 million, primarily driven by lower distribution costs.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

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 $59.2 million.

In addition, we incurred $1.5 million of professional fees in connection with our investigations.

For more information, refer to Note Q.

Commitments and Contingencies in our Annual Report on Form 10-K for the year ended December 31, 2024.

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.

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 a quantitative impairment assessment 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.

For more information, refer to Note D.

Goodwill to the Condensed Consolidated Financial Statements.

Provision for income taxes

For the three months ended September 30, 2025, the Company recognized Income before earnings in affiliated companies and income taxes of $68.1 million, compared to Loss before earnings in affiliated companies and income taxes $31.2 million for the three months ended September 30, 2024.

The income tax benefit for the three months ended September 30, 2025 and 2024 was $0.5 million and $10.8 million, respectively.

The effective tax rate for the three months ended September 30, 2025, and 2024 was 0.7% and 34.6%, respectively.

The decrease in effective tax rate for three months ended September 30, 2025, as compared to the three 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.

The 2024 effective tax rate was impacted by $18.2 million of tax benefit related to Loss due to misappropriation of assets, net.

For more information, refer to Note Q.

Commitments and Contingencies in our Annual Report on Form 10-K for the year ended December 31, 2024.

Comprehensive Income (loss) and Net Income (loss)

Comprehensive loss increased in the third quarter of 2025 by $47.3 million year over year to $67.4 million.

The components of Comprehensive income (loss) are discussed below:

Net loss decreased by $46.9 million in the third quarter of 2025 compared to the third quarter of 2024 discussed above.

The activities from the components of Other Comprehensive income are discussed below:

• $4.4 million of net unfavorable impact due to change in foreign currency translation adjustments due to weakening of the U.S.

dollar versus euro and

• $4.0 million of net favorable impact related to financial derivative instruments primarily driven by net periodic changes in cross currency swaps.

Adjusted EBITDA (A Non-GAAP Financial Measure)

Adjusted EBITDA decreased in the third quarter of 2025 by $22.4 million, or 28.0%, to $57.7 million, year over year.

The decrease was driven by unfavorable timing of the pass-through effect of raw material costs as well as unfavorable product and regional mix in both segments.

These were partially offset by increased volume and a favorable foreign exchange rate impact.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

For the nine months ended September 30, 2025 compared to nine months ended September 30, 2024

Volume increased by 22.5 kmt year over year to 729.2 kmt compared to the nine months ended September 30, 2024, primarily due to higher Rubber Carbon Black segment volume.

Net sales decreased by $48.3 million, or 3.3%, year over year in the nine months ended September 30, 2025 to $1,395.0 million, primarily driven by the pass-through 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 increased by $9.1 million, or 0.8%, year over year to $1,112.9 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to higher Rubber Carbon Black volume and fixed costs.

Gross profit decreased by $57.4 million, or 16.9%, year over year to $282.1 million.

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

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by $6.1 million, or 3.4%, year over year to $173.6 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily driven by impact of cost saving measures initiated by us and lower distribution costs.

Those were partially offset by inflation and unfavorable foreign exchange rate impact.

Loss (recovery) due to misappropriation of assets, net

In addition, we incurred $1.5 million of professional fees in connection with our investigations.

For more information, refer to Note Q.

Commitments and Contingencies in our Annual Report on Form 10-K for the year ended December 31, 2024.

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.

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 assessment for each of our two reporting units at September 30, 2025.

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

For more information, refer to Note D.

Goodwill to the Condensed Consolidated Financial Statements.

Provision for income taxes

For the nine months ended September 30, 2025, the Company recognized Loss before earnings in affiliated companies and income taxes of $37.6 million, compared to Income before earnings in affiliated companies and income taxes of $38.3 million in the nine months ended September 30, 2024.

The provision for income taxes was an expense of $13.0 million and $11.8 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

The effective tax rate for the nine months ended September 30, 2025, was (34.6)%, as compared to 30.8% for the nine months ended September 30, 2024.

The decrease in our effective tax rate for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily driven by valuation allowances for tax losses and a non-deductible expense in connection with the goodwill impairment.

The 2024 effective tax rate was impacted by $18.2 million of tax benefit related to Loss due to misappropriation of assets, net.

For more information, refer to Note Q.

Commitments and Contingencies in our Annual Report on Form 10-K for the year ended December 31, 2024.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Comprehensive Income

Comprehensive income decreased by $63.9 million year over year in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Net income decreased by $76.0 million year over year in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The activities from the components of Other Comprehensive income are discussed below:

• $10.3 million of net favorable impact due to foreign currency translation adjustments, and

• $2.2 million of net favorable impacts related to financial derivative instruments primarily driven by net periodic changes in cross currency and interest rate swaps.

Adjusted EBITDA (A Non-GAAP Financial Measure)

Adjusted EBITDA decreased by $47.8 million, or 19.9%, year over year from $240.5 million for the nine months ended September 30, 2024 to $192.7 million in the nine months ended September 30, 2025.

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.

Adjusted EBITDA decreased in the first quarter of 2026 by $20.1 million, or 30.4%, to $46.1 million, year over year.

The decrease was driven by unfavorable timing of the pass-through effect of raw material costs, lower contractual pricing, unfavorable product and regional mix in our Rubber Carbon Black segment and higher production costs.

These were partially offset by a favorable foreign exchange rate impact in both segments.

Segment Discussion

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

The table below presents our segment results derived from our unaudited Condensed Consolidated Financial Statements for the periods indicated.

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 Delta 2025 2024 Delta

(In millions, except volume) % (In millions, except volume) %

The tables below present our segment results derived from our unaudited Condensed Consolidated Financial Statements for the periods indicated.

Specialty Carbon Black

Three Months Ended March 31,

2026 2025 Delta

(In millions, except volume) %

Volume (kmt) 64.0 61.9 2.1 3.4

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Adjusted EBITDA $ 27.1 $ 25.4 $ 1.7 6.7

Specialty segment demand picked up considerably late in the first quarter, as the surge in oil prices precipitated channel restocking across most end-markets.

Segment volumes increased 3.4% year over year, led by growth in the Americas, in particular, as well as our Europe, Middle East and Africa (“EMEA”) regions more than offsetting slightly lower year-over-year demand in the Asia Pacific (“APAC”) region.

Net sales increased by $9.0 million, or 5.6%, year over year to $169.7 million, for the three months ended March 31, 2026, driven primarily by higher volume in Americas and EMEA regions, foreign exchange rate impact, favorable product mix, those were partially offset by unfavorable price.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Gross profit increased by $3.2 million, or 8.0%, year over year, to $43.2 million for the three months ended March 31, 2026, primarily driven by the higher volume and favorable product mix.

Adjusted EBITDA for the three months ended March 31, 2026 increased by $1.7 million, or 6.7%, year over year to $27.1 million.

The increase drive primarily by higher volume, favorable product mix and favorable foreign currency translation impact, partially offset by higher production costs.

Rubber Carbon Black

Three Months Ended March 31,

2026 2025 Delta

(In millions, except volume) %

Volume (kmt) 192.5 189.8 2.7 1.4

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Adjusted EBITDA $ 19.0 $ 40.8 $ (21.8) (53.4)

Specialty Carbon Black

Volume increased marginally by 1.5 kmt, or 2.5%, year over year to 61.2 kmt for the three months ended September 30, 2025.

Volume decreased by 4.8 kmt, or 2.6%, year over year to 181.1 kmt for the nine months ended September 30, 2025, respectively, primarily due to lower demand in the EMEA as well as the Americas regions in the first half of 2025.

Net sales decreased by $2.5 million, or 1.5%, year over year to $160.0 million, and by $20.1 million, or 4.0%, year over year to $478.8 million for the three and nine months ended September 30, 2025, respectively, primarily due to lower oil prices and lower volume in the first half of 2025.

Gross profit decreased by $4.0 million, or 10.9%, year over year, to $32.6 million and by $12.6 million, or 10.7%, year over year to $105.2 million for the three and nine months ended September 30, 2025, respectively, primarily driven by lower volume, unfavorable price and product mix and higher fixed costs.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Adjusted EBITDA for the three months ended September 30, 2025 decreased by $5.6 million, or 20.6%, year over year to $21.6 million.

The decrease was primarily due to unfavorable timing from the pass-through effect of raw material costs, product mix and higher fixed costs.

Adjusted EBITDA for the nine months ended September 30, 2025 decreased by $16.2 million, or 19.5%, year over year to $66.9 million.

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

Rubber Carbon Black

Volume increased by 10.8 kmt, or 6.5%, year over year to 176.3 kmt and increased by 27.3 kmt, or 5.2%, year over year to 548.1 kmt, for the three and nine months ended September 30, 2025, respectively, primarily due to higher demand in the Asia Pacific and Americas regions.

Net sales decreased by $10.0 million, or 3.3%, year over year to $290.9 million and decreased by $28.2 million, or 3.0%, year over year to $916.2 million for the three and nine months ended September 30, 2025, respectively, primarily due to the pass-through of lower oil prices, partially offset by higher volume.

Gross profit decreased by $17.9 million, or 25.2%, year over year to $53.0 million and decreased by $44.8 million, or 20.2%, year over year to $176.9 million for the three and nine months ended September 30, 2025, respectively.

The decrease was primarily due to higher fixed costs, and unfavorable price and regional customer mix.

Those were partially offset by higher volume.

Adjusted EBITDA decreased by $16.8 million, or 31.8%, year over year to $36.1 million for the three months ended September 30, 2025, driven primarily by the unfavorable impact from the pass-through effect of raw material costs as well as unfavorable customer and regional mix.

Adjusted EBITDA decreased by $31.6 million, or 20.1%, year over year to $125.8 million for the nine months ended September 30, 2025, primarily driven by unfavorable customer and regional mix as well as the unfavorable impact from the pass-through effect of raw material costs.

Volume increased by 2.7 kmt, or 1.4%, year over year to 192.5 kmt for the three months ended March 31, 2026, primarily due to higher demand in the EMEA and APAC regions.

Net sales decreased by $27.2 million, or 8.6%, year over year to $289.8 million for the three months ended March 31, 2026, primarily due to lower pricing, pass-through effect of lower year over year oil prices, and adverse regional customer mix, those were offset by higher volumes and favorable foreign currency translation impact.

Gross profit decreased by $22.1 million, or 38.0%, year over year to $36.0 million for the three months ended March 31, 2026.

The decrease was primarily due to unfavorable impact from the pass-through effect of raw material costs, lower contractual price and regional customer mix.

Adjusted EBITDA decreased by $21.8 million, or 53.4%, year over year to $19.0 million for the three months ended March 31, 2026, driven primarily by the unfavorable impact from the pass-through effect of raw material costs, lower contractual price and unfavorable regional mix, those were partially offset by higher volumes and favorable foreign currency translation impact.

Liquidity and Capital Resources

Historical Cash Flows

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 multi-currency, the senior secured Revolving credit facility (the “RCF”) and related ancillary facilities, various uncommitted local credit lines, and, from time to time, term loan borrowings and Accounts receivable factoring.

We believe our anticipated future operating cash flows, 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.

For a discussion of the risks that could increase our short-term working capital needs, see “ We may require short-term working capital financing due to rising oil and petroleum product prices to support our day-to-day operations, and we may be unable to obtain such financing on commercially acceptable terms or at all, which could materially adversely affect our business, liquidity and financial condition and results of operations ” in Item 1A.

Risk Factors in Part II of this Quarterly Report on Form 10-Q.

As of March 31, 2026, the company had total liquidity of $192.3 million, including cash and equivalents of $50.5 million, and $141.8 million availability under our RCF, including ancillary lines.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

The tables below present our historical cash flows derived from our unaudited Condensed Consolidated Financial Statements for the periods indicated.

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions)

Net cash provided by operating activities $ 122.9 $ 30.8

1 Net cash provided by (used in) operating activities $ (12.4) $ 0.4

2 Net cash used in investing activities (36.1) (29.2)

Net cash provided by (used in) financing activities (5.5) 119.3

Net cash provided by operating activities during the nine months ended September 30, 2025 was $122.9 million.

3 Net cash provided by financing activities 39.6 21.8

Free Cash Flow (1) (1-2)

(48.5) (28.8)

(1) Free Cash Flow is a non-GAAP financial measure.

Other companies and analysts may calculate this non-GAAP financial measures differently.

Net cash used in operating activities during the three months ended March 31, 2026 was $12.4 million.

The cash used in operating activities primarily reflects changes in working capital.

Change in working capital includes $96.0 million sale of certain accounts receivable, discussed in Note B.

Accounts Receivable to the Condensed Consolidated Financial Statements.

Net cash used in investing activities in the three months ended March 31, 2026 amounted to $36.1 million.

The expenditures were primarily related to safety, maintenance and growth investments (primarily for construction of our new conductive manufacturing plant at La Porte).

Net cash provided by financing activities during the three months ended March 31, 2026 amounted to $39.6 million.

The inflows primarily consists of borrowing under our RCF facilities of $81.5 million and $27.6 million, net borrowings under our ancillary credit facilities.

The outflow primarily consisted of scheduled debt repayments, dividend distributions, and payments for debt issuance costs.

Net cash provided by operating activities for the three months ended March 31, 2025, amounted to $0.4 million.

The cash provided by operating activities primarily reflects changes in working capital.

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Accounts Receivable to the Condensed Consolidated Financial Statements.

Net cash used in investing activities in the nine months ended September 30, 2025 amounted to $112.3 million.

Net cash used in investing activities for the three months ended March 31, 2025, amounted to $29.2 million.

The expenditures were primarily related to safety, maintenance and growth investments.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Net cash used in financing activities during the nine months ended September 30, 2025 amounted to $5.5 million.

The outflow primarily consisted of scheduled debt repayments, dividend distributions, payments for debt issuance costs and $24.8 million in stock buybacks.

Those were partially offset by inflows primarily consisted of $30.0 million related to other short-term debt borrowings and $1.5 million, net borrowings under our ancillary credit facilities.

Net cash provided by operating activities for the nine months ended September 30, 2024, amounted to $30.8 million.

The cash provided by operating activities primarily reflects changes in working capital, $59.2 million Loss due to misappropriation of assets, net and professional fees of $1.5 million.

Change in working capital includes $323.1 million sale of certain accounts receivables, discussed in Note B.

Accounts Receivable to the Condensed Consolidated Financial Statements.

Net cash used in investing activities for the nine months ended September 30, 2024, amounted to $135.7 million.

These expenditures were composed of a combination of safety and maintenance-related.

Net cash provided by financing activities for the nine months ended September 30, 2024, amounted to $119.3 million.

These inflows primarily consisted of $68.7 million related to other short-term debt borrowings and $75.1 million, net borrowings under our ancillary credit facilities.

Those were partially offset by scheduled debt repayments, dividend distributions and stock buybacks.

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 multi-currency, the senior secured revolving credit facility (the “RCF”) and related ancillary facilities, various uncommitted local credit lines, and, from time to time, term loan borrowings and Accounts receivable factoring.

We believe our anticipated future operating cash flows, 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 September 30, 2025, the company had total liquidity of $249.2 million, including cash and equivalents of $51.3 million, $165.8 million availability under our RCF, including ancillary lines, and $32.1 million of capacity under other available credit lines.

Net cash provided by financing activities for the three months ended March 31, 2025, amounted to $21.8 million.

The inflows primarily consisted of $24.5 million borrowing under our RFC facility, and $19.1 million, net borrowings under our ancillary credit facilities.

The outflows primarily consists of scheduled debt repayments, dividend distributions and stock buybacks.

Net working capital (A Non-GAAP Financial Measure)

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The following table sets forth the principal components of our Net working capital as of the dates indicated.

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

(In millions)

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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 from $346.1 million as of December 31, 2024, to $362.6 million as of September 30, 2025.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Our Net working capital increased from $293.9 million as of December 31, 2025, to $353.5 million as of March 31, 2026.

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

• Accounts receivable, net —This increase was primarily due to lower balance at December 31, 2024 from increased factoring of certain accounts receivables.

• Accounts receivable, net —This increase was primarily due to higher demand in the first quarter of 2026 compared to the fourth quarter of 2025 and the timing of payments.

Refer Note B.

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Those increases were partially offset by:

Management’s Discussion and Analysis of Financial Condition and Results of Operation

• Inventories, net —Decrease in production to meet forecasted demand resulted in a reduction in finished goods inventory.

The value of Inventory, net was also impacted by lower oil prices and foreign exchange rate;

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

• Inventories, net —The higher demand in the first quarter of 2026 resulted in a reduction in finished goods inventory.

The value of Inventory, net was also impacted by foreign exchange rate;

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

Capital expenditures (A Non-GAAP Financial Measure)

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We do not plan to make material Capital expenditures outside the ordinary course of our business.

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 in the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements.

As of March 31, 2026, we did not have any off-balance sheet arrangements.

Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This report contains and refers to certain forward-looking statements with respect to our financial condition, results of operations and business.

These statements constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

These statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.

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Forward-looking statements include, among others, statements concerning our potential exposure to market risks, macroeconomic conditions including tariffs, expected plant uptime, market conditions, anticipated customer demand, expected impacts of operational improvements and foreign exchange, expectations regarding capital expenditures, working capital and free cash flow, our outlook for 2026, and other statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions and statements that are not limited to statements of historical or present facts or conditions.

Forward-looking statements are typically identified by words such as “anticipate,” “assume,” “assure,” “believe,” “confident,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “objectives,” “outlook,” “guidance,” “probably,” “project,” “will,” “seek,” “target,” “to be” and other words of similar meaning.

Forward-looking statements are typically identified by words such as “anticipate,” “assume,” “assure,” “believe,” “confident,” “could,” “estimate,” “expect,” “guidance,” “intend,” “may,” “objectives,” “outlook,” “plan,” “probably,” “project,” “seek,” “target,” “to be,” “will,” and other words of similar meaning.

These forward-looking statements include, without limitation, statements about the following matters:

• our profit and cash flow projections;

• our compliance with regulatory changes in certain countries;

• the outcome of any in-progress, pending or possible litigation or regulatory proceedings;

• the impact of adoption of new ASUs on our financial results;

• the sufficiency of our cash on hand, cash provided by operating activities and borrowings to pay our operating expenses, satisfy our debt obligations and fund capital expenditures;

• the sufficiency of our cash on hand, cash provided by operating activities and borrowings to pay our operating expenses, satisfy our contractual and lease obligations (including debt obligations) and fund capital expenditures;

• our projections and expectations for pricing, financial results and performance in 2026 and beyond.

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• negative or uncertain worldwide economic conditions and developments;

• the operational risks inherent in chemicals manufacturing, including but not limited to disruptions due to technical difficulties, severe weather conditions or natural disasters;

• unanticipated impacts of our plans and strategies, including our plans to discontinue production at certain facilities;

• the escalating military conflict between the United States and Iran (the “Iran-U.S.

Conflict”) and geopolitical tension in the Middle East, the Russia-Ukraine war and the growing tension between China and Taiwan;

• disruptions in the supply of carbon black oil feedstock and natural gas (including due to geopolitical conflicts), which could adversely affect our production volumes, margins and results of operations;

• our capital needs and ability to obtain required financing for our operations and working capital needs, particularly in the short term;

• the operational risks inherent in chemicals manufacturing, including but not limited to disruptions due to technical difficulties, severe weather conditions, natural disasters, pandemics (such as COVID-19), or otherwise;

• unanticipated impacts of our plans and strategies, including possible future decisions to discontinue or reduce production at certain facilities;

• our dependence on major customers and suppliers;

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• our ability to realize benefits from investments, joint ventures, acquisitions or alliances;

• our ability to realize benefits from planned plant capacity expansions and planned and current site development projects;

• any information technology systems failures, network disruptions and breaches of data security;

• our ability to realize benefits from, and changes in plan with respect to, plant capacity expansions and capital investments such as site development projects;

• any information technology systems failures, network disruptions and breaches of data security, including via third-party systems or using emerging technologies such as artificial intelligence;

• our exposure to political or country risks inherent in doing business globally;

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• environmental, social and governance matters, including regulations requiring a reduction of greenhouse gas emissions or that impose additional taxes or fees on emissions as well as increased awareness and adverse publicity about potential impacts on climate change by us;

• development regulation of carbon black as a nano-scale material;

• changes in regulations for carbon black as a nano-scale material;

• our operations as a company in the chemical sector, including the related risks of leaks, fires and toxic releases as well as other accidents;

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• any deterioration in our financial position or downgrade of our ratings by credit rating agencies;

• any disruptive changes in international and local economic conditions, dislocations in credit and capital markets and inflation or deflation;

• our ability to generate the funds required to service our debt and finance our operations;

• any fluctuations in foreign currency exchange or interest rates;

• the availability and efficiency of hedging;

• the availability and efficiency of hedging for certain risks;

• any potential impairments or write-offs of certain assets;

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• our ability to recruit or retain key management and personnel.

• any disruptive changes in international and local economic conditions, dislocations in credit and capital markets and inflation or deflation;

• our ability to generate the funds required to service our debt and finance our operations.

Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include those factors detailed under the captions “Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995” and “Risk Factors” and in “ Note Q.

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Quantitative and Qualitative Disclosures About Market Risk

Information about market risks for the period ended September 30, 2025 does not differ materially from “ Item 7A” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Information about market risks for the period ended March 31, 2026 does not differ materially from “ Item 7A” in our Annual Report on Form 10-K for the year ended December 31, 2025.

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-Q

Item 2. Management’s Discussion and Analysis