Ascent Industries (ACNT) 12 Nov 242024 Q3 Earnings call transcript

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Ascent's financial results for the third quarter ended September 30, 2024.

Joining us today are Ascent's Executive Chairman of the Board, Ben Rosenzweig; CEO, Bryan Kitchen; CFO, Ryan Kavalauskas; and the company's outside Investor Relations adviser, Cody Cree.

Following their remarks, we'll open the call up for your questions.

Before we go further, I would like to turn the call over to Cody Cree as he reads the company's safe harbor statements within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Howard. Thanks,

federal I'd contain all to currently certain harbor cause of to continue, discussion that the results available to statements actual and provisions may These uncertainties are today forward-looking the various to like us we on materially. subject participants remind the safe are and Before based laws. to information risks securities differ statements could pursuant that

posted the of uncertainties. all this listening its latest summary XX-Q a those XX-K and review advises Ascent call of and to on risks for website to these

does update and may Please for turn Further, be found that of Ascent measurement. posted to not accordance this company forward-looking today posted company's Ben of undertake over earnings measures. back the non-GAAP at Board, that in these section of to the with today GAAP-based release any to that, to call the website. discussion reconciled link reconciliations G, Executive issued Ascent's closest earlier to over webcast the call responsibility note the on Rosenzweig. has The the can In press Investors Regulation statements. the include amounts a the With available you. ascentco.com. I'd is is the Ben, via Investors like website company's the on section Chairman also replay the

as year And us has backdrop embarked on the our across against Ryan the of results to our the they've less hold third initially reporting done Bryan had, any financial and that this be seeing than straight we I efforts so and them pleased successive that expectations exceeded Thank have with I'm Cody, done when of improvement everyone. the organization. you, in rest afternoon, good along our journey the favors. quarter not ago. certainly take with a we're macro stabilization Board

to immediate plans cost importantly, their the by you're to put both the work growth, led have level We're did of within a implemented to dug all segments us just today. revenue existing have in still built but get near-term do of want heels, focused areas of Bryan, have action identified to improved right track. and they've they've corporate a rest Most and the this, and effectively and on execute at operators team to lot in reinvigorate that to Ryan seamlessly I getting then work Despite new quickly results of our improvement blending their hard and seeing the on the goals. team recognize started

we resulting expect to initiatives, both through for demand to quarter, the come the in the the for of financial All plan have year. remainder internal the soft Overall, third see throughout decline our improvements the quarter, which remains same. we volumes self-help continued both In in segments across a segments. continue

of their We'll continue team this drive and and operations, Specialty planning increase the investing within continuous the unlocked for reductions efficiencies question, Products is to year, while beginning Chemicals in just journey. operational margins this segment. optimize Without and segment cost but the efficiencies growth meaningful the improvement has Tubular

The team for possible every on growth. dollar reinvest is capturing to laser-focused

to just $X Looking they liquidity at ample continues facility our what from cash that million We've year. and availability got to the position priorities, our on credit discussed throughout the closed we've an a capital continue provide revolving on to with growth. allocation remain sheet balance the for same strong over in extension

Ryan that ramping efforts to hold, instilled. become more the up operational Bryan As have plan the efforts stabilization while maintaining and capital on deploy with we high we conviction to comfortable our accretive more discipline and and taking areas

continuing stock trades do spoke open repurchase to to evaluating intrinsic so limitations our as to expectation of efforts our attended progress I meetings the remain had and believe full within to in continue We also I market, Gateway to make with and all September below improving on coming positive our results. of We within the the our of of on a credibility every confines quarter, avenues market Conference good slate that restore the and out value. committed the shares to as we're company's the interest quarter front Last of event. long with

Bryan right front on the have significant utmost in drive to you. the to be I'm to we're value both in available forward Bryan, about. look details to on down call to Overall, on path talk questions. exciting the We answer pass over our have quarters and we remaining years over ability With growth conviction operations to like moving our as later active that, Investor to provide shareholder the initiatives I'd across Relations I'll to to the come. pleased any segments. more and

earnings Without Thanks, of was question, and and renewal afternoon. has the to team another of us continuous in an to growth and ability aggressive expansion for about margin optimistic improvement be we're all progress as This self-help. face Ben, the continue market accelerator to thank for that. of organization the ongoing us. with joining you recapitalization been and this attest drive I through talent making quarter an our purposeful purpose-built headwinds that

confident remain We started, just are our getting building. and plan. in is we Momentum

Helene. in touch of Hurricane the years base it ago I news to feels on wanted the cycle, impact Although like

areas has were Carolina and South in hurricane devastating which Carolina, experienced of assets destruction. Tennessee, Ascent North the the in and directly path

operate provide for our around communities in into employees communities. the employees which donation flexibility increased was or our in whether goods to rallied it the of we support, Ascent our

meeting employees proud difference. our miss company our appropriate in downtime, pleased Tubular our communities with with I'm a dive come how that, of pleased of let's more I'm the challenge, into segment-specific terms to overcame customers' commentary, within together expectations. make From despite I their real but we measures. With not minimal how have some implemented Products. starting our a a team did am operations business beat that mitigation risk And perspective, share to our

current assets of in laser-focused accordingly. we continue are We the and segment, execute the to on across maximizing value our

reduced be in can challenging that operated despite The the date outperformed face quarters. even of its fact, prior to have In the market segment profitably taken segment X demand, actions headwinds. proven the

are the I driving returns proud focused of value to Tubular base. on sustaining back levels. we've and shifts the asset positioning to segment gains pre-COVID maximizing market strong the progress when generate the continuous of We am towards improvement, demand made that our

improvement to Now let's Tubular, headwinds XX% successes in shift Like continues to our we meaningful continued market less earnings soft improvements match in beginning sustainable the strides with and volume. and true mix pushed new pricing, segment. cost, our gross in a Through conditions, services XX% drive products, our past are efforts and team we business development focus product for driving unlock our margin. our QX to the Chemicals. Despite to to of segment Specialty in year-over-year our capabilities, this make activities market value

reference we across pipeline and grow, in the and to project the segment. our our just of mix, impacts compelling our selling to resultant continues beginning With are see margins pricing points, efforts in

focused In the unlocking of of versus remain a XX% in XXXX. XX% our Chemicals segment on long-term Specialty delivered QX, QX price the Specialty base existing highly value We gain QX within versus a average asset segment. in gain the Chemicals and sales

beyond and right begin ahead term. of Our organic are in is which schedule allow us place, near in this people growth will segment plan the looking to the stabilize to

have accelerated both organization significant desire together a want thank the strides to who worked made Overall, environment. I tough very have in we our team and macro to operationally pace. financially win resilience at as an entire barriers demonstrated incredible to to the at across eliminate entire all agility, do Ascent, progress purposely we and

We continues have generating to We as about returned is optimistic adjusted build, future. very positive to grow and EBITDA. foundation this for a to cash and balance. we momentum the we We remain consistently debt-free, continue success our remain believe

more I'd Ryan, third it to to our walk like quarter results to us yours. our the turn now financial in CFO, Kavalauskas, is Ryan floor over detail. through

a you, segments mix attributable by favorable period. and as quarter segment. to the million continuing within Net Chemicals afternoon, as product was well from into partially work Thank This $XX.X as year both growth financial unlock third million volumes the inventory. Jumping sales were prior good to The everyone. compared decline within in lower lower operations results. of $XX.X was aged Tubular primarily capital Bryan, pricing right and Specialty Products offset backlog across we through pricing to low-priced our

This increased to million sourcing. gross increase from margin the year operations direct XXX% in $X approach focus the compared third XX.X% $X.X to prior strategic a efficiency continuing X.X% from in product XXXX, period. profit on of a result our relentless was to compared to to to million increased management line Gross while quarter of significantly

continuing from that diluted diluted share note million $X.XX improved Net operations $X share we or $XXX,XXX. continuing third compared XXXX. million to as quarter, in third our $XX.X is against the or a loss It was our net took from loss quarter quarter a to loss $X.X taxes from important to charge operations loss per not valuation of of allowance operating onetime per to the for $X.XX the million and affect our profit tax income operations or overall noncash a This assets. during charge is deferred continuing $X.X before million a related does tax

million third debt. aforementioned to in interest lower of $X.X in compared having Outside in same significantly last a implemented. adjusted was a the quarter gross expense to year-over-year the impact, the improvement million margin to the to profit period the increase initiatives due aforementioned same outstanding was improvement primarily improved attributable compared in $X.X year-over-year negative onetime of primarily EBITDA improvement increased we've the EBITDA negative decrease in and to X.X% and X.X% The the much Adjusted while year, to profitability last period result optimization cost year.

debt-free $XX.X credit looking under which XX, we XXXX. the access our of current in balance at as facility, of we million million extended with XXXX, liquidity revolving sheet $X.X and through September to position remain on cash borrowing our Lastly, availability

to and in drive continue will growth inorganic diligently the to future. allocate organic near capital We

share quarter third back of With shares through for XXXX, now I'll the for During program. it of repurchased million $X.X XX,XXX turn a repurchase that, operator Q&A. to our the we approximately over total

or Our line Instructions] [indiscernible]. David comes comment from from [ question of the Siegfried ] first [Operator

operational improvement see. Congratulations EBITDA, also the the margin to $X.X on nice positive. That million And and really the efficiencies, adjusted cash. was the really in

question a Tubular. Just on

seems are like that trough seems industrial us Tubular? it of has So and like getting a some as the And industrial see in you companies that years. it with bottom. close calling been like Do infrastructure X-plus the to projects

David, it's Bryan.

to we're right? would I see cautiously several different markets. So starting quotation an say We're inbound in increase optimistic, across opportunities

this So I in we'll next improving. touch but all base indications the would are again on say quarter,

the from Munhall? assets flow? $X those that from books on increased operational Okay. monetizing the previous The Or now million quarter. cash from cash that is just Was just

little a both. It's bit of

Monetizing efficiencies. cash then operational the cash build from Munhall asset So build inventory year to a this predominant in has it of kind related been of piece portion sales. the slow-moving of largely is big the and a

of So kind of mix of it's X factors. those a

anticipate more assets Got places? other it. monetized And of that from Do to can the happening more or you that be sold there near in Munhall be are future?

asset think from main I pure focus. not a really perspective, that's our

will outside of just to where think from trap monetize, largely our But on inventory, We we'll normal cash perspective. sales. I cash that's rightsize focus continue that generating

you do businesses business? sale anticipate one tubular or a What purchase both of happening a the or Okay. of chemical the first,

Stay tuned.

Stay tuned.

going obviously, a to Ryan, be starting some was as Was nice of -- margins with far of Clarion company, we that been Is QX contracts progress those it the also around So take from there's the and Ascent quarter, saw focus a some some record, strictly at here as were turning chemicals. established just you record with to root self-help? go? chemical Bryan Do is and a of improvement so you Chemicals. public that this

thereof, Yes, off for across right? it's the reduction I we aggressively entire a think combination cost So enterprise. looking started

and been of have. a pretty do we've that of Additive that business we in overall think extracting the we or business book of way. though, sustainable I to doing that book improving successful that, our have been quality in the

So the above, it's of really David. all

robust space chemical completing saw multiple in July the M&A is for I which see specialty was specialty from year. Okay. said chemicals? environment deals How is perspective, that And I pricing? a been your that firm, in mentioned robust. has during a Do PE you there an the M&A article the

Yes.

to started of opportunities. quarter, or we get we've We're as crack new to think I starting that looks looks kind open. last just door get additional at indicated

in the terms what tell is I think activity it's early too to is pricing. I But of level up. picking say will

turn Okay. around could distressed And ever would turned and at assets companies you've as you around chemical? look since on well, that bolt other you

Yes.

that August to to domestic contract Defense capabilities to manufacture in mentioned saw the vendors chemicals. critical I a Okay. article it awarded an that Department develop of X

wasn't ever a have Ascent part you footprint to a that something that play of those domestic? But vendors. manufacturing is to to customer's one could So desire of the become that's

Yes, it is.

I I think that more cycle, that I think opportunities think and are beginning most going this influx to of after an emerge. we're more onshoring there's those of opportunities. see to election recent And

margin Got give or I don't could it. the targets, are we to you there targets flow cash Obviously provide know maybe guidance, we guidance in but look forward could XXXX? that company that as

I plan in Look, budget cash. is growth continuing plans, kind deviate to quarter-on-quarter for of we're we process Obviously, pulling we're our think incremental Yes. to in that. from the XXXX. We've certainly build and together don't of our got

just no stabilizing tape really believe, I There's So we've started. again, tick the not we're enterprise. or -- progress, We're We're good done. getting parade. very made in

look I continuous moving So improvement would for forward.

hear. credit perhaps a after put place do agreement operationally, now the speak, the is larger mean, that buyback? new now or you to could now, a XXXX at, and you larger with market highs the in time at to pedal, to about to that's and the precursor the so you you think Do is Good Russell the the then where that at X-year better I think is And we're high. metal to hit all, a Okay. all-time to the to pedal think metal reference buybacks? feel do be hammer

getting sure we done were we for something that's that that really David, was everything evaluate targeting possible, there. it's as out say I'd that,

our months. you've think to also more over X a the feel stock last seen we little in I like the liquidity obviously, X is bit And undervalued. stock

buying been back have stock. we So

some additional the technically with a limitations that of the easing liquidity. are by We little market constrained are bit

the available yes, ability options I to think have more gives I that us mean, So that, to us.

Kitchen this no remarks. in showing closing to the back additional [Operator queue questions for I'd conference I'm over to Instructions] Mr. the at like time. turn any

you, again Howard. we Thanks, quarter speaking and a our of with We'd and to and thank have XXXX full today's we everyone safe like year call, Thank forward to report when again evening. listening for look all to fourth results. you

conclude today's does this gentlemen, and Ladies teleconference.

time. may Thank day. participation. disconnect this You your lines your you great Have for at a